Parpolity for the People: with Ethereum

So much drama in the E-T-H. Kinda hard being an Ethereum E-I-P. :)

With the Ethereum devs arguing over things like Parity’s stuck funds, ProgPOW, and/or scalability vs usability, seems governance problems are on everybody’s mind right now. Because we work in blockchain tech, for better or worse we look to blockchain for potential solutions. There are new and interesting developments in the industry like interesting distribution models and DAO structures like MolochDAO, and incentivization models coming from Gitcoin Grants. Still, others seem sick of the whole governance talk and are tired of the pontification.

While going down the rabbit hole of the current state of blockchain governance, I stumbled across a blog entry by the late Aaron Swartz on the idea of Parpolity. There are some interesting takeaways that seem very relevant to the current state of the dapposphere. It also fits in well with the nested multisig ideas I talked about in my last post. My last article was a discussion on the Gnosis multisig wallet and how it might work in a governance system. I presented this idea of Parpolity at the last Denver Blockchain Collaboration session. I got some interesting feedback from the community and I think it warrants a little deeper dive.

Parpolity is a style of democracy where small groups can make decisions autonomously from a larger group, on issues that affect them the most. Contrary to a representational democracy where politicians are elected to represent a larger locality, like a state or country, a parpolity works in much smaller groups of around 50 people or less. Proposed by Stephen Shalom, the goal, according to Shalom, is to create a political system that will allow people to participate as much as possible in a face-to-face manner. Parpolity is the first half of a greater set of ideas in participatory politics.

Nested Councils

Parpolity has the idea of nested councils, where a small group can make autonomous decisions, and because they are small they can effectively work together to come to an agreement on what is best for the group. These groups can be nested with one person from the local group being elected to represent them in a larger federation of councils. The federation, again, is a small group of these elected representatives that can work closely together to decide what’s best for this collective of federated councils. When extrapolating this out you can cover a lot of people with a fairly small amount of nesting, As Aaron Swartz points out in his blog:

“Just five levels of councils, each consisting of only fifty people, is enough to cover over three hundred million people.”

Multisig Wallet Recap

A multisig wallet is an account that has multiple signatories, meaning that any transaction or withdrawal made from the account needs at least a set amount of the ‘owners’ or signatories to approve. Quorum could require 2 of 3, 26 of 50, 100% of the signatories, or anything in between, to sign off on a transaction. That quorum is just dependent on the configuration of the account. In the case of blockchain and cryptocurrencies a multisig is a shared account of funds that requires a set quorum of signatures before any withdraws can be made. Some multisigs, like the one I mention in the last article, can also be used to execute a program, this execution also requiring an approving quorum before it can be executed. The thing about this is, it also works in a nested fashion, like the nested councils, where one multisig requires a quorum of many multisigs before anything can be executed. Although this is a very simple mechanism, it’s flexibility lends itself to some interesting use cases.

Role of Blockchain

The blockchain, which is basically a decentralized, immutable ledger, can add a level of trust and accountability that has not been available before. Because there is no centralized authority that has to be trusted to help keep these councils honest, a lot of the overhead and middle men needed for such a task can be eliminated.

Organizational governance

Parpolity on a smaller scale works too. For example, in orgs like a DAO (Decentralized Autonomous Organization), Local courts and juries, medium size business and co-ops could all experiment with this.

Take, for example, a decentralized software development co-op. In this example the co-op has a shared goal of producing technology that helps in progressing blockchain, web3 and Open Source Software (OSS). It would have many autonomous groups (Company Councils or CCs). Each council would be self-governed and responsible for its own inner workings and, in fact, would be its own corporation or LLC. The bit that links the CC to the larger co-op network is the multisig, and can be used both as an operating fund and for internal decision making through votes.

Each CC works together with the shared goal of making the entire network more productive and profitable. Having your smaller CC a member of the co-op brings the benefits of in-network relationships as well as shared culture, branding and services.

To keep the co-op efficient all work throughout the network is transparent and open. Company Councils are small to keep communication fluid and vision aligned. The sweet spot for the size of these groups is probably between 3–7 people, similar to the sweet spot in agile dev teams. Each Company Council has a lead which will represent their team in larger decisions that affect the co-op as a whole. But when it comes down to it, each individual will cast their own vote.

The larger network of the co-op has its own multisig with each Company Council as a signatory on it. It can be a store of funds from fees, grants, investment, and donations from the councils, proposals can be made against that fund, which in turn is voted on by a single vote from all the federated councils.

With all these elements working together, decision making is fast and efficient like a bunny.

Another part of this would have to be adding a way for CCs to interact and do business with each other, for the good of themselves and the greater good of the federation, while staying autonomous, and self-governed. And the last part is how to handle dissent and CCs exiting. These parts could reveal themselves as a marketplace of services and bounties, and most likely inclusive of a reputation element and a value distribution model. More on how this all could be connected next time.

What are your thoughts?

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