Berlin, January 2019. Tribes of philosophers, theologians, magicians, scientists, artists, clowns, and similar maniacs intrigued with democracy and with her doings gathered to discuss decentralised governance, learn from each other’s experiences in building the Web3 and celebrate the awesome promise of Decentralised Autonomous Organisations (DAOs) and the vitality of the Aragon community.
We believe the fate of humanity will be decided at the frontier of technological innovation.
The Aragon whitepaper describes the platform as an opt-in jurisdiction for blockchain-native decentralised entities to organise and interact using economic incentives, and since the mainnet launch last October more than 300 such new life forms have been incorporated using their platform which, if these sort of metrics can be trusted, puts Aragon between Panama and Paraguay in an entrepreneurship index.
As far as the tech stack goes, Aragon has a modular framework that allows developers to create new DAOs using the provided SDK or by adding new building blocks for their custom organisation as ultimately the aragonOS smart-contract framework can be used to build DApps and protocols other than the original.
The product version of Aragon can be used by just about anyone comfortable using a crypto-wallet and with an appetite for DAOs on the web, desktop or mobile versions of the platform. Users participating in DAO governance are required to stake tokens in order to ensure “skin in the game” and the user’s token balance itself can be used as a voting weight mechanism, if that fits a particular use case. Althea presented one such use case for DAOs in governing decentralised wireless ISPs in Colombia and the US.
The dispute management mechanisms available on the Aragon network promise faster resolution times than a traditional court system could ever hope to achieve. This despite the current shortcomings of public blockchain scalability, as discussed in the Web3 builders panel.
Besides software, Aragon is also behind the generous Nest grant programme that is helping developers and entrepreneurs to build on Web3 during this bear market, among them the Pando, Autark and DappNode projects.
All governments suffer a recurring problem: Power attracts pathological personalities. It is not that power corrupts but that it is magnetic to the corruptible.
If governance is the exercise of guiding a common enterprise, then I will argue that increasing social tensions, corporate failures like Enron, or the Paris accord process show us that there is no such thing as a perfect model guaranteed to sustain equitable social systems at an individual, national or global levels. We’ve employed technology in governance since at least 1754 BCE, when Hammurabi relied on a new tech called “writing” to establish contract law, minimum wage and property rights for his people with a surprisingly lasting effect.
In more recent times, mainframes, social media, AI and blockchain have all been proposed as the missing link that will finally allow for flawless decision support capabilities, resource allocation as well as consistently fast and fair conflict resolution, however tools wielded in ignorance become weapons and thinking machines believe all the information they receive, so many of us reach 2019 with a general sense of distrust for our institutions and the technology used to watch over us.
A blockchain could be used as part of a solution that provides an ID to a given population and some form of digital signature + token based voting. Second generation chains allow for a high degree of experimentation using mechanism design, financial incentives and liquid democracy, quadratic voting or futarchy in the context of DAOs and Radical Markets technology in oppressed and isolated societies.
Control the coinage and the courts — let the rabble have the rest
Decentralised governance didn’t begin with the blockchain nor was it needed in the kibbutz or by the Zapatistas, but if we are to build the Web3 on this public network substrate then we have a duty to consider what forces we can turbo-charge with our ideas-about-reality because the current discussions on on-chain and off-chain governance will shape core public protocols for years to come.
Decentralised and trustless peer-to-peer digital currency is what the Bitcoin whitepaper describes but it’s well documented that Satoshi personally plead early GPU miners not to take control of the network and Wikileaks not to adopt it, out of fear of overwhelming externalities impacting the nascent project. Once the figurehead dropped off, the informal governance structures around the project coalesced around three groups:
- The core developers, as is natural in open-source software
- The professional mining operators, whose incentives challenge the game-theory assumptions in PoW
- A few notable early investors, evangelists and startups who shape the public discourse
The inflationary bug of 2010 was fixed overnight precisely because of how small a community it was back then, and the 2018 one did not go through adequate public scrutiny because of the disclosure process that sadly revealed a lot more about the security of the network than the quality of the code base suggests.
The block-size debates, UASF, MASF and other signalling methods show that stakeholders are willing to have a voice in public network governance but the ever growing number of forks is a quantifiable measure of the little impact they have, and contribute to a perception of tyrannical control of Bitcoin by the core developers.
The lack of transparency in how the roadmap develops and the piece-meal nature of BIPs makes it hard to assess the future impact of new features in the direction the protocol takes, as can be seen with the adoption of Segwit intended to increase transaction capacity at a time when network transaction fees where high, and whose implementation caused BTC and BCH to split, but now seems at odds with the current research that suggests smaller blocks are needed for network sustainability.
Give me the judgment of balanced minds in preference to laws every time. Codes and manuals create patterned behaviour. All patterned behaviour tends to go unquestioned, gathering destructive momentum.
Ethereum had a roadmap with clear goals from the beginning and raised millions of Euros in its TGE to fund a small team of developers and other professionals behind a foundation legally incorporated in Switzerland to develop an open-source world computer and enable an ecosystem of DApps to be built on top of it. “Code is law” was an often repeated mantra used to describe Ethereum’s smart-contracts, and soon after the first DAO gathered the attention of thousands of people and millions of euros, we witnessed the first major public display of blockchain governance.
The immutability of the blockchain is either a principle that cannot be broken or a design decision that can be bypassed if ever found at odds with stakeholder objectives and it was up to the community that locked 15% of total ether supply in a smart-contract to decide if there should be a recovery. As Steve Blank puts it, the minute you take money from someone else, their business model becomes your business model.
Christoph Jentzsch gave an exciting first-hand account of the events, but even with three years distance the adrenaline affects his speech as he describes the mounting pressure and chaotic environment that proceeded the hard-fork. It wasn’t a smooth ride but real boats rock and the preference for public discourse and transparent off-chain governance helped Ethereum recover and become the fastest growing public blockchain for developers. Projects like Tenna Graph, specialised communities-of-practice like the Fellowship of Ethereum Magicians are looking to better capture and amplify high quality signals from the community and ensure better representation and governance.
There are massive financial incentives for people and it’s naive to ignore the dynamics at play here.
Polkadot’s new Adaptive Quorum Biasing and binding on-chain governance mechanism and Commonwealth Lab’s Edgeware are important innovations for decentralisation and the Web3, as will Ethereum 2.0 be. The growing adoption of stake-based consensus and token-based governance protocols preceding widespread popular adoption might lead to an irreversible power capture in the hands of the very few as even now turnout tends to be below expectations, raising questions of legitimacy in key decision making processes.
Inevitably those with the will to govern will form cartels to maximise return on investment, but considering their interests may span multiple public blockchains it will be interesting to see if mechanism design meant to prevent and punish byzantine behaviour will hold in the presence of these new strategic-objective participants.
Looking back at the political and cypherpunk influences in the early Bitcoin days and the later rise of social media influencers to the centre stage and VCs to the back stage, I was reminded of how the Bene Gesserit influenced the beliefs of primitive men to control them, hence the Dune quotes and references that serve as background to the article.
I want to thank some of the amazing people that made AraCon an amazing communion. Guillermo, Samuel, Patrick, Luuk, Victor, Anais, Javier, Kevin, and everyone else that I met and laughed with, you make this community work!
Thank you for taking the time to read my article. If you enjoyed it and think there might be others who will like to read it too, please like, comment and share this article to help it reach a wider audience within your own network. I will reply to comments and questions posed here and maybe we can start some valuable discussions!
ENS address: storkandcrow.eth