Sifchain + Metagovernance Project
Conversation Between Co-founders
This seminar is the first in a series of conversations by the Sifchain team with leaders in the blockchain industry. You can find the full video here.
The following conversation happened on February 12, 2021, between Jazear Brooks of Sifchain and Joshua Tan of The Metagovernance Project in order to understand what folks at The Metagovernance Project are working on, their collaboration with Sifchain, and how the output of their work can be beneficial to the blockchain industry generally.
Below is a transcript of that conversation, edited for readability.
Intro: We are excited to announce this seminar with Joshua Tan, a Ph.D. student in artificial intelligence (AI) at Oxford. Joshua is co-founder of The Metagovernance Project, which is an interdisciplinary research group working on the governance of virtual worlds. Josh is currently a Practitioner Fellow at the Digital Civil Society Lab at Stanford and previously served as Entrepreneurial Lead at Massachusetts Institute of Technology (MIT). Joshua has a Master of Science in Mathematics from New York University (NYU) and a Bachelor of Arts in Ethics, Politics, and Economics from Yale University.
Sifchain: I’m Jazear and I manage Sifchain. I also was an early blockchain architect at Thorchain, and I’ve done quite a bit of other stuff in crypto. I’m sure you’ve seen the bio. But in this context, I’m the client of Metagov and we’re getting ready to launch Sifchain and SifDAO as a result. I’m really excited to dig in with Josh about decentralized autonomous organization (DAO) governance, DAO structure, and ways that Metagov is going to help us with that. So Josh, why don’t you introduce yourself and what you’re up to?
MetaGov: Yeah, thanks for having me, first off. I’m Josh. I’m a Ph.D. student in computer science at the University of Oxford. I also am one of the founders of The Metagovernance Project, which is a research collective building standards and infrastructure for online governance across a lot of different communities, but specifically focusing on DAOs and other forms of blockchain governance. Really glad to be here.
Sifchain: Nice, that’s awesome. Cool, so I think the way we’re going to do this is I wanna basically ask you several questions about DAO stuff and then feel free to ask me whatever you want, but I’ll treat this as like, I’m the host, you’re the guest for a while and then as questions come in, I think during the last 20 or 30 minutes or whatever, or as they come in, if we get any really good ones, we’ll answer immediately but otherwise, we can just leave the last 20 minutes or so for talking. Sound good?
MetaGov: Yeah, sounds good. Let’s do it.
Sifchain: So I think that Metagov is pretty interesting in the sense that it has a huge diversity of activities. You guys don’t just do cryptocurrency DAOs, but you’ve also actually done DAO governance help for gaming communities and so forth. And you guys actually have a couple of people from your group who have done work with real governance in real life. Can you give me a sense of the breadth and scope of the people and activities at Metagov?
MetaGov: Oh God, okay, how am I gonna start. Everybody at Metagov is so much more impressive than I am, so let me take a little bit of time to brag. So Larry who’s kind of our Principal Investigator, he’s a law professor at Harvard Law. He’s well known for kind of inventing the — he wrote a book called Code 2.0 and was one of the first people — he’s actually the person who sort of coined the phrase “Code is Law,” something that’s quite popular in blockchain and DAO circles. But Larry actually had a lot of experience writing the constitutions of entire countries. For example, for the country of Georgia, Larry was one of the people who built and helped them specify their initial constitution.He is a constitutional lawyer, as well as a person in cyber law. We met working together on the governance of a game.
I’ll mention Seth, whom, Jazear, I know you’ve worked with. Seth is a data scientist at UC Davis who has done a huge amount of work in the governance of Minecraft, actually. He’s done thorough studies of something like 7,000 different Minecraft servers to understand what kinds of rules work, what kinds of rules don’t, and how people self-organize in these online game communities.
Maybe in this community, people might be more familiar with Primavera de Filippi who wrote a book called Blockchain Law. She’s a super awesome person to be around, but she’s also one of the foremost authorities on legal frameworks for blockchains and crypto projects in general.
I’ll just mention a few other awesome people, like Nathan Schneider, who is the founder of Platform Cooperativism. He does a lot of work, also, in activism. Michael Zargham, who is also working with Sifchain, a blockchain scientist, is one of our advisors.
Sifchain: Cool, there are a lot of impressive people working at Metagov. Unfortunately we don’t have time to talk about every single one. So I’m super excited.
We don’t have the time to profile everyone, but we do have a chat with Zargham coming up, and hopefully we can have a really good series, maybe the Sifchain Series or something like that.
The reason I asked you to talk about the people who contribute to Metagov was that you guys think about governance extremely seriously. You think about real world governance, with the constitutions of countries and constitutional law and so forth, but you also think about governance of DAOs and cryptocurrency communities, the governance of gaming communities. I know Minecraft is one, but I know you have some other gaming partnerships as well.
I bring that up because I feel like when we talk about SifDAO, we want to take DAO government very seriously. Something I want to impart on everyone else so we’re clear about it is that DAOs as they currently exist, as crypto people think of them, are very rudimentary in comparison to what could exist. With DAOs, it’s basically kind of a plutocracy, except it’s a plutocracy that is only focused on the people who have invested in a particular token right?
So someone who’s rich and really smart but doesn’t necessarily know a bunch of other things might not be able to help in any way. They might not necessarily know certain ways to govern and thus they end up suggesting things that are ultimately not helpful. We’ve seen a lot of weird drama with governance for cases like Yearn or Maker or a few other platforms. We’ve seen it even from a computer side, from a pure profit-seeking structure.
With DigixDAO for example, the total amount in the treasury was not even worth the same as the collective market cap of the tokens, and so the token holders could’ve just voted to steal the treasury and run, and that would’ve been — and not just the token holders but anyone could also do the same thing. We’ve seen a lot of signs that governance in cryptos is in its infancy — we’ve seen a lot of crypto leaders say things like, “Hey, in order for a DAO to succeed, it’s gonna have to have more key players.” You don’t want pure democracy where everyone votes on every policy, it’s not really ideal. There just have to protocol politicians who are going to vote on what makes sense, to delegate attention, interest, money, and ultimately votes. They will do things for you as opposed to you deciding yourself, and that’s sort of where this is headed: Once you have protocol politicians, how are these politicians operating?
One of the projects that you guys work with, that you guys are setting up for yourselves, is this concept of Govbase. I want to turn this over to you in your own words to describe, but I’d say that for us, Metagov is, having looked at a whole bunch of governance options, has a really cool metagovernance framework you can get into, and then Govbase is its way of cataloguing the different governance structures that exist in various online ecosystems. So I‘d love to get you to describe in more detail what Govbase is, and we’ll take it from there.
MetaGov: Govbase is a database of all the projects in online governance, put simply. The idea is that you could — actually go click on the link that I put in the chat at this moment. You’ll see a giant Airtable with around 400 different projects, and it lists out all the different projects both in crypto but also in gaming, in social media, in different platforms, different services, different kinds of projects that are somehow related or can be used in online governance. These span from projects like SourceCred developed by Dandelion, which is in use in a couple of different crypto projects to platforms like Loomio which were developed for the needs of offline voting communities, but it’s starting to be adapted for online ones, as well as a whole bunch of different crypto-native ones. For example, I was just talking to the founder of Boardroom, Kevin. Boardroom is a user interface (UI) for different kinds of blockchain governance. We’re making more visible the kinds of voting and the rules of different blockchains.
MetaGov: So that’s just at the top-level. It’s an introduction to what’s out there. So if you’re interested in this space and you want to build something, or you want to look for some way of improving your DAO or your online platform, this is a place to start. But really what we’re trying to do with Govbase is, we’re trying to make it, to build as rich and deep a representation of online governance as possible.
MetaGov: Imagine you were looking at a blockchain — some sort of crypto project like Compound. You would be able to zoom in, click on that row, and see a representation that spans from things like the kinds of rules that Compound endorses to the institutional analysis of the code, a description of the configurable parameters of Compound, to who actually has — what’s the distribution of power in that project, who is actually making decisions. We’re trying to build this 360-degree view of governance, of different online communities. It starts a lot of ways with talking with people like Jazear. It’s been a pleasure working with Sifchain to pilot some of that initial data gathering and data modeling.
MetaGov: So one of the things we’ll be working on is — we already have a research scholar, Naveen, who’s going into the Sifchain public Telegram and Discord, trying to understand what is going on in this community, and once the DAO launches, doing the same thing there, and understanding what is the trajectory of this community? How is it evolving? And what are both the formal and informal kinds of governance that are taking place, for example, in terms of incentives. But also in terms of who’s being a leader, how are people motivated, who are some of these protocol politicians, and what is motivating them? So that is the kind of research we’re hoping to foster through Govbase.
Sifchain: Nice, good shout out for Naveen, I’m excited to see the work that he does over the next year. I know he’s playing double duty in that he’s doing a lot of the Govbase work, but is also explicitly focused on Sifchain. So we have this research scholar program that we are excited to help sponsor with Metagov where all the research that he’s doing in going into all these inter-communities is going to benefit Sifchain as he helps to look at where our community is, how it is evolving in comparison to so many other DAOs in crypto and other decentralized governance communities. So I’m really excited for that.
I would say that this then begs the question, so we have all these different ways to govern and we’re going to get a whole bunch of structure in order to actually start looking at how governance works. There’s so many options, but we’re only one community, we can only do so much. Beyond that, people don’t necessarily know all of the structure that their government is putting on them. They only know how to operate within a system. The system is a set of rules for how they engage with one another. But, they don’t necessarily know every nook and cranny of what’s available, what’s an option and so on and so forth.
The trick in our minds, and one of the reasons that we were excited for metagovernance as opposed to governance, is that Metagov has this metagovernance framework where there are things like modularity, exportability, and so on. Our sense is that what we’ll end up doing is having a set of rules for a couple of months, and then in two or three months, we’ll have a constitutional convention and we’re like, “Hey, here’s how things work, here’s how things don’t work or have not worked as well. How are we going to, as a group, re-evaluate and move on to the next step?” So, yeah, I’d love to hear from you a bit about how you see metagovernance as opposed to governance, and the kinds of recreation of rules as time evolves. I’d love to hear you opine a bit more about that.
MetaGov: So there’s actually a lot of really deep scholarship around this. I’ll just mention some of the work that’s been done by Elinor Ostrom. Ostrom is a Nobel Laureate in Economics who did a lot of work governing the commons. What she actually did is described four different levels of governance. So there’s governance at the behavioral level, where there are rules and they’re directly governing what you do and what you don’t. Then there’s what she calls the collective action level or the legislative level. This is the arena in which you’re making rules that ultimately affect or impact the rules that are actually implemented at the behavioral level. Then above that is the constitutional level. These are rules about how you make rules.
MetaGov: So imagine you’re a Congressperson, or you’re a Senator, or you’re a parliamentarian. You’re sitting in the legislative body and you’re following certain rules and you have certain kinds of power, which are determined by the rules or the constitution that’s articulated. Finally, and the reason Metagov is — or I guess meta — is what Ostrom calls the meta constitutional level. These are the kind of rules that take place. This is the guide, this is the process of creating the constitution — so rules about rules about rules. It’s not as complicated as you think. Imagine all the rules that go into deciding “This how a constitutional convention works. These are the people who ultimately have the power to accept these constitutional procedures.”
This is the setting and the process in which we decide on how to have a constitutional moment, how to have that conversation about what are the values of our community, where are we going together as an organization and given all these things, what kinds of processes and how should we distribute power in our community? So that covers some of the meta constitutional and constitutional questions. Hopefully, that is a perspective that would be useful just to help clarify what some people are thinking.
MetaGov: Part of the work we are doing at Metagov and as part of Govbase is building what we are calling a registry of computational constitutions. Just today, I finally got the first DAO constitution completely coded up, which is kind of an exciting moment. I’m not going to share it because it is a lot of text as you can imagine the constitution is. What we did is we took an existing DAO constitution — what we think is probably the most well-written one so far that we found — and we had it coded up in the exact same way that… So there’s something called the Constitute Project, which is a repository of all the national constitutions that currently have been in place since 1789, and what we’ve done is we’ve worked with the creators of that project to code up a DAO constitution. This gives us a better way of comparing how DAOs are run and very directly compare, let’s say, how does this with the constitution of the United States, how does this compare with the constitution of Algeria. Just to give us some more ideas, a point of comparison for thinking about how are DAOs being run, how these large decentralized collaborative projects run versus the ones that we have more experience with in social science, which is like nations and these large corporations.
Sifchain: That’s really cool. I’d love to take a look at that constitution, whenever you get a chance. Just share us a link. All in all, I love the way that you’ve broken this down. We’ve got different levels of governance, which we’ll revisit at different times or for different reasons, at different frequencies of time. So, it’s helpful to think in that way. And, the way that I imagine SifDAO evolving with Metagov’s help is that SifDAO just has a bunch of needs like “Hey, we’ve got to get a website out”, “Hey, we want our token price to rise”, “We’ve got to put out an event like this”, “Hey, if we gotta do whatever it is we’ve gotta do”, “We’ve gotta tweet”, “We’ve gotta grow as a community” and Metagov is there to say, “Here are ways you can do that more effectively. You allocated power in these ways in the past versus these other ways in the future that other groups may offer. It’s helpful for you to consider these different options so that you can get a more effective outcome.” So, I think that’s really cool.
I would say that, a couple of things come to mind that it’ll be interesting to see how we tackle together. One is the sheer pace at which SifDAO is going to grow, right? We’ve seen Yearn is probably one of the greatest communities to appear recently, starting from effectively nothing to one of the most premiere decentralized finance (DeFi) communities in a span of one to two months. And because the founder gave away 100% of the tokens, the leaders of the community are just whoever buys the tokens off the market, There isn’t a centralized set of governance.
Andre has outside influence despite his repeated exits from the community. I don’t really know how you do that actually, leave the community multiple times and simultaneously run it. But I would say that it has something to do with charisma and focus and drive and this idea that people are delegating their power to him because he’s such a visionary in the space. And so that’s a lot of high-pressure growth, and that’s a lot of growth that’s based on the social element, as opposed to something that’s all in chain.
So I’m wondering, from your perspective, how would you deal with having a whole bunch of highly motivated players, trying to push an ecosystem forward really quickly, and especially in a case where so much of that power is informal and social, and difficult to grasp. I’m wondering how you would tackle that problem.
MetaGov: Honestly the only demonstrated, evidenced approach is to have, especially in these kinds of fast-moving projects, is to just have good leadership. Good leadership, committed leadership, leadership that listens rather than depending too much on, let’s say, institutional backstops. People imagine that if you just define and build the right incentive system, or you just, magic up the right rules, that that will solve your problems.
It’s true that these kinds of institutions, like reputation systems like SourceCred or the right to a well-tuned voting system could contribute to giving opportunities for people to participate, giving the right kinds of feedback from your community, allocating power and responsibility where it can be responsibly deployed. But reality is like you need good people, certainly at the top, making decisions and providing leadership, providing direction to a group of people. You can’t replace that with institutions, as somebody who studies these institutions essentially full time, There are just limitations to what these things can do. It’s something that I think people can observe in nations today.
There were always these institutions which kept getting pushed and pushed, in the US and the UK, in different countries around the world like Brazil, and what makes these countries keep working is the fact that there are people making decisions and saying, “I’m actually going to enforce these rules.” Just having the rules there, without the right people, it doesn’t really work.
MetaGov: Actually, I’ll add — just one thing. Governance in these settings, especially in these decentralized settings — you shouldn’t necessarily — it’s not true either that there needs to be a single charismatic leader. Often what these kinds of community-based projects benefit from is what Zargham and I have been calling a leadership network. You might be running Sifchain, but there might be a couple of other people running related projects or sub-projects, or you’re all disconnected, there’s no formal governance structure relating you guys. But oftentimes the fact that you’re participating in each other’s projects leads to a stronger network effect. It makes the governance of these DAOs a bit more resilient when there’s this cross-chain, cross-style collaboration.
Sifchain: Yeah, I think what comes to mind for me is Yearn, as a DAO collaborating with Sushi, with Cream, and some other projects. I think they’re all really focused on just making sure that the tokens they hold go up. A lot of them hold portfolios as opposed to one individual token. But even still, even if you hold one token on their on-chain collaborations it can happen, whereby the value of Yearn helps influence the value of Sushi or the value of Cream or any of these other tokens that people are holding. So there’s a really cool effect there. I think for us, as a cross-chain platform, we see that a lot.
So, one thing I’d like to shout out is the Zilliqa team. Zilocracy reached out, they’re running a node for Sifchain and they’re excited to help support our main net. Zilliqa is a really, really large project. They independently reached out to Thorchain to get Thorchain Bifrost setup. They’re doing some independent work around that. They’ve also reached out to Sifchain to get Sifchain a cross-chain connection. And that’s not even something we’ve mentioned. This is the first time I’ve literally mentioned this out in public. But, Zillocracy is not the Zilliqa Foundation. It’s a group of people who are independently deciding to help and bring things together and support our ecosystem. I’ve had so much help from people in other communities.
I won’t name too many projects, not to confuse people, but people from groups like Balancer, like DAOmaker, obviously Thorchain is a massive one. So many that have just helped to steer us indirectly. And we see on-chain partnerships as coming imminently or down the line, depending on our own bandwidth, but it’s much easier when we empower our community to help set up those kinds of partnerships as well. So I definitely agree with you there.
I would say, for our audience, definitely ask any questions you want. Although this is an intimate group, I think this is more academic. We brought in a lot of people from Foresight here. Also from Sandbox, which is a great group of young overachievers who have their own companies and so forth. And I’m really happy to see that.
I’d contrast that though with the really, really large following that Sifchain has as a group. There are several thousand people in the Telegram, we have thousands of followers on Twitter. We have a lot of influencers who are super big fans. We have a bunch of investors who are very active on media. In terms of — we add for context, maybe 10 times the number of KYC applications and pledged contributions to the token as we were expecting. There is this sense that the crypto masses are also really interested in Sifchain. But these kinds of talks are not necessarily geared towards them because what they really want is to see the price of their investments go up.
I’m wondering — and it’s funny, but it’s also really serious in that all of this stuff that we are building on is based on market sentiment on some of what some people would say are “degens” or the various other forms of somewhat tongue in cheek pejoratives that will describe people as “Hey look, I’m here to see numbers go up and that’s about it.” There are groups like DAOMaker, for instance, that really can toe the line in the sense that they’re very much — in some sense they’re very much a VC-backed or institutional player, but at the same time, they are super engaged with DAOs and decentralized structure. And they’re very focused on listening to the people and doing what the people want, even though those people are not necessarily academics, but as long as they can channel that influence and that engagement, they can end up supporting the project by putting their own investments in, by putting their actual time and energy and money into the program. So I’m wondering in comparison to these other forms of governance, crypto is uniquely asset-focused. I’m wondering how that plays into the way that you see community structure evolve.
MetaGov: That’s a really good question, and it’s a hard topic to address. I’ll just recall one conversation I was recently having with — there was a couple of people there like Jesse Walden from Varying Fund and I think Zach from Sarcophagus and a couple of people from NEAR. This is actually kind of relevant to people who are building Ethereum Ball — for those of you who’ve heard of that project. Basically it’s about how do we combine Web 2.0 principles, which are around user experience (UX), around feedback loops, around engaging with social media and the kinds of incentives that are built for Web 3.0, which typically use some sort of ownership. So when you’re talking about, people just want their tokens to go up, what you’re seeing is the incentive of ownership at work. Long story short, I think this is a lot if you talk about this, but I think the most obvious solution and probably the best one so far that we know of is really just about education. Speak to the members, your users, or token holders and talk to them about the benefits of long-term ownership, of engaging with the community as opposed to more short-term analysis about limiting the kinds of behaviors you might associate with short-term thinking that might be detrimental to the overall health of the community and finally of the value of the project.
MetaGov: It comes down to educating people about, this is how these things work, this is why you should like the engagement with the community, this is the vision that we have around Sifchain, really painting this as the project develops, as we build more technology, as we make it more functional and usable, these are the benefits. Once again, there is no magic institutional solution. It is about getting your user population and community with it. I’ll just mention also that there’s a way that we design Web 2.0 applications, right? It’s actually kind of similar to the way that we’d build online games. There’s these well-refined, super well-engineered — essentially like dopamine loops where you click a button, you do this, and you get a ping from it, you get certain notifications, it feels good, and then you keep doing it and it’s got a self-reinforcing cycle, right? This is why platforms like Facebook are worth billions of dollars because they’re built in this way to foster this sort of continuous interaction.
That’s currently not where Web 3.0 is. Web 3.0 is all about — let’s just face it — 90% of people really there just make money. That’s a great incentive, but it’s not necessarily the kind of incentive that leads to great communities. Web 2.0 is much further along when we think about that.
So the question is what happens when you put these loops on top of one another? And to be honest, people don’t really know. Someone has to build different kinds of Web 3.0 applications where it’s this more refined platform base where architecture’s designed around how to motivate and incentivize these Web 3.0 communities. It’s not easy though. And partly it has to do with the fact that certain design loops or feedback loops just kind of get overwhelmed. It’s a continuing research project.
Sifchain: That makes sense. Quite a few things to say. Number one. I want to shout out Zach from Sarcophagus — great project — and Jesse Walden as well as two other people who I’ve had great conversations with. And hopefully we can get maybe some of these other guys onto this series as well. I think Jesse’s had a lot of really good conversations. We talk obviously about Sifchain, but also, just about other perspectives in the industry because we’ve been following Variant Fund as something that’s really focused on community-driven and owned products for a while. So we definitely have a lot to learn from him. And then for Sarcophagus, I’ll just say if you’re really into things like Arweave, you should definitely take a closer look at the awesome stuff they’re doing there, for file storage.
Sifchain: So, another thing that I would say is that, when I thought about the problem that you’re mentioning, how do you keep a community motivated, for me, it’s come down to this concept of positive alacrity.
I would disagree slightly with you in that we haven’t found a way to build community around tokens in Web 3.0 as opposed to Web 2.0 so much as that the communities that are being built on are very small and insular, and even when we think about cross-chain communities or cross DAO communities, they’re still really small in comparison to the gaming communities you might be dealing with, or what people would think of as a larger community in general like a big platform like Facebook. But I do think that people have really great bonding experiences in their Telegrams or Twitter or whatever from this concept that I mentioned which is positive alacrity, which is some sort of good feeling that happens off of any engagement. So if you are having a campout with your friends, and it’s really late and you’re kind of tired, but someone’s like, “Hey, can you help put away this firewood”, you might still do it anyway if you get a pat on the back for that. That’s a feeling of positive alacrity, like hey you know what, I’ve done something really cool and it’s prosocial, but people are noticing that and that’s amazing, so I feel more connected to the community and so on.
I think that a lot of the positive alacrity moments in crypto come from the price movements or from potential for price movement. I think it is one thing that people are trying to wrap their heads around outside of crypto, but certainly even within crypto — this idea that the positive alacrity you get is associated very much with price and investment and wealth accumulation, whereas outside of it, it’s really focused on things like “likes” or whatever. I’ve always imagined, all these companies have all this marketing budget. What if you take that marketing budget and set up spending on just getting a message out to people. That message should be funding some kind of positive benefit for the community, like hey, something like instead of Gears of War 4 or whatever, actually giving you five bucks towards something you really care about instead of spending five bucks to get a message in front of you. And so I imagine something like this concept will be bigger with things like crypto — but there’s so many things you can imagine. For us, we do something like liquidity mining as an example where we’ll give people extra tokens for mining in our pools, and then for validating or staking with us. But UMA has taken this further by monetizing other things you can do, whether it’s sending out tweets or building infrastructure or whatever. And I do get the sense that you can literally just pay people in a way that the market will determine the price for “to do” things that are prosocial. And some of the stuff is obviously gonna be free, you don’t want to downsize every single engagement that people do in your community, but you can do enough to support people in their prosocial behavior by directly paying them or by showing them in some way that their portfolio’s going to go up. And I think that’s something Sifchain wants to explore and that should be explored by all of the other groups as well.
MetaGov: This is a really interesting conversation actually, because I’ll just say that I kind of disagree with that perspective. The lesson here is that you actually shouldn’t be directly monetizing everything, or even most things. In a lot of different kinds of situations or social settings, even productive ones where you expect people to perform some sort of task, assigning them a monetary benefit leads to a crowding effect. It’s a social science term for the fact that if you previously were motivated because you just wanted to do something, and somebody else established a monetary incentive for it, you might actually lower the tendency of people to do that work.
Imagine you’re playing a board game. You’re playing Settlers of Catan or whatever your favorite thing is, and you’re just normally playing it, it’s fun, you do stupid things, you joke around. And then suddenly somebody says, the result of this is somebody gets $100 and losers lose $100 each, or somebody gets $300, everybody else loses $100. And suddenly people change. Really, really change. The game which used to be fun suddenly is something extremely different. I’m just saying, the incentives for doing things — not all incentives are built the same. People just treat things very, very differently. When you up the stakes, it forces you into — it’s almost like a phase transition if you think of it like that. Just like certain behaviors that you used to expect to see suddenly get replaced with some completely different dynamics, some of which are problematic.
Part of the thing I like to emphasize is that you want to, in certain settings, you do want to almost lower the stakes. This is something that we’re actually doing very concretely. I don’t know if you guys have heard of Dada Art, This is a crypto allied project. It’s this art marketplace that supports online conversations. What we’re doing with them is they’re interested in introducing an NFT system for representing and tokenizing their arts so they can sell it. Underneath the hood, of course, what they have already is a community in which there are these Web 2.0 community-based incentives to norms, and they’re just really worried about if you introduce these like more tokenized incentives, what is that going to do with this community? Is it going to destroy it?
MetaGov: So what we’re right now working on is modeling how these incentive systems interact using variants of game theory and making sure that they don’t interact in certain ways, that they are in fact partitioned in certain parts of the platform-slash- the ecosystem. Anyways, I would just say lowering the stakes and partitioning are also very important tools in that community design toolset. Figuring out how to foster the right kinds of engagement and the right incentives.
Sifchain: Yeah, I would totally agree 100%. I think that there is well-studied literature that says if you pay someone to do something that they would otherwise do for free, it completely ruins their incentive to continue doing it for free after you stop paying them. So that can be a problem. I also at the same time think that this is an investor-driven space. People do often think, “I want to pay money and I want to receive a particular outcome.” And we as builders in this space want to give them more they can do with their money. We’ll expand the capacity they have to get any particular thing done by paying money. So I would say that for us, there is that very fine line that needs to be walked. It’s even finer when you think about the idea that this also built on the open source paradigm. So many people do things in open source, almost as a way to get away from money. They want to contribute value and they know that they can do that at a large capacity, but they’ve chosen to do whatever is the best good, and they don’t want to be manipulated by some tech company into doing something that they don’t think is the best good. And they’re willing to work for free in order to just focus on their passion. I think that we’ve seen that ultimately, open source developers have built most of the basic infrastructure that we build value on top of. A lot of great software is closed source, but time and time again, things like Linux or Wikipedia have been able to deliver as much or more value than their closed source competitors.
That underpins a lot o crypto. At the same time, you have these investors who are like, if I want to see an outcome, I want to pay, but you’re talking about paying people who aren’t really incentivized by money to do some things. And so I point out in the article we wrote a while back, “Sifchain and Dao of Cryptocurrencies” a clear issue that came to a head again in the Yearn system, where Andre who’s very got much this open source stuff like “I’m giving away these tokens for free so the community can get involved” with investors who are like, “We paid a lot of money for this thing, we expect results.” And I think that Andre has, admittedly in a really bizarre way, been able to ride that wave by continuing to deliver value by the way that’s unique to him and people have just accepted his work style, and I think both the investment community and the work for free community have found a way to collaborate on their own.
So that’s awesome, but I still think that there’s a lot more to be learned, and we’re just gonna have to figure out over time how to partition these results, these incentive schemes so that they don’t bleed into each other. One thing that I’ve imagined is paying for something like a layer of kindness. I don’t know how this will work, but I’m imagining that you could do something like, “Hey we’re gonna give a fixed amount of money to everyone that does something that’s positive for the community.” And you can just track things like favors or needs and gives and whatever. And you don’t know how much money you get when you do the favor. You just know that some amount of money will be provided for people who are in your tier of help. So in that sense, you know that you as a partitioner, as a player in this ecosystem, you’re gonna get some kind of reward, but you’re not necessarily doing it for the reward. I think that’s one way of doing it. I think another is that frankly, we need to think more carefully around what the most important things are in the industry, and actually pay to have them built, even in a traditional non-open source style. For example, sometimes people often ask me, “Hey, why is it that the cross-chain ecosystem is not as far along as it should be,” and I’ve said, “Look, the reason is that it’s actually really hard to convince a foundation to build a cross-chain bridge.” Because it requires really involved engineering, and so you have to get really skilled engineers to do it, but you don’t necessarily get all the benefits of building a cross-chain platform. It’s something where you’re potentially getting money to flow out of your system.
The way I think of it is like, the blockchain software you were building is now disconnected from the asset that you’ve built. Because assets can be used in another blockchain, and that’s very bizarre. And it’s certainly not what a lot of the people who got into blockchain were intending, but it is ultimately beneficial. And so we’ve had this follower, yeah, I can say the issue would be two or three years farther along if there were players in the cross-chain space, but it’s just super hard to get any foundation to pay for something like that.
So yeah, we will have an airdrop to Atom and Rune holders for sure. Actually, we need to announce that relatively soon, but that’s one of the ways that we want to reward other communities that are also really into cross-chain, to make sure that we have all these — we want Sifchain to succeed, but we also want other projects to succeed. So that’s a way of boosting entire portfolios. I’d say that’s definitely super important for us.
Sifchain: Another thing I’d say is, I imagine using these funds for things that the community could enjoy, like public goods. We have spent a lot of time and energy and resources on Sif the character, and a lot of people really like that art. I think the NFT space is really great and we’re super excited to see a lot of growth in that industry. But it’s coming from people already deep into the art world, or from people tokenizing things that aren’t super relevant, like tokenized tweets. That’s awesome, but they’re not necessarily that artistically pleasing. I think with Sif the character, we have created something really special that people can get behind that’s crypto-native at the same time. I imagine there’s a lot more art coming. Thorchain has done a fair amount of funding for the arts, and I can see that being built in more detail over time. You could also imagine things like paying for gas fees as another way to purchase — to give something to the community that everyone can appreciate. So there is that concept.
Sifchain: What I would say for you is we’re definitely super excited to do some stuff with Metagov over the next several months. I would love to get a sense from you on how you see approaching this project and any ways you imagine community members can follow along or help push this project forward.
MetaGov: I would say first off if there are any community members interested in learning more about governance, Metagov hosts a weekly seminar every Wednesday. You can go to Metagov.org and find it and log in, check that out. In terms of getting along in the research project, don’t worry, we’re already there in the Telegram, in the Discord. You can ping me or Naveen and chat with us directly. We’re basically there as historians and ethnographers of Sifchain, at least of the community, trying to understand what’s going on, what are the major movements, who’s proposing what, and that’s the kind of close-to-the-communities work that we’re trying to do.
MetaGov: If people are interested in contributing to that, or talking to us, doing interviews, we would love to do that. Once again, feel free to reach out to me or Naveen Mishra on the Telegram or the Discord.
With that, there was one thing you said earlier that I’ll just briefly address, or two things. Having fixed payments, I think a lot about how do you design what we might call strategy free zones, it is related to what I was saying earlier about partitions. If you guys ever think about mechanism design, that’s exactly the kind of thing that happens when you try and design these strategy-free things so people can just act in the most natural way possible without thinking about the explicit rules of the system, because they know it’s been designed, it’s been set up in a way that just lets them do what they want to do — be the most natural version of themselves. The other thing is that, I think you were talking about lots of people there are motivated by money, and that’s fine. One of the “OGs” of virtual worlds, Richard Bartle who built the first virtual world ever, had this idea of a theater with player types — just like how you talked about protocol politicians and other types of roles or users, people with certain types of incentives — baskets. Bartle’s points in how you design a good, healthy world is that you need all of these, but you need all of them in the right proportions, with respect to the kind of game you’re building. So you have to ask yourself, what kind of game is Sifchain? What kind of community is Sifchain? And what balance of these player types are you gonna be able to tolerate? There’s no precise answer number-wise, but that’s a good framework for thinking about these questions.
Sifchain: It makes sense. We have outlined a set of maybe 10 or so actor types including validators, speakers, traders, long-term holders, institutional investors and a couple of others. I think what we could do is take a lot of the user personas that we created for those, and combine them with incentive models. I think a lot of people will be very vocal. In building Sifchain, I’ve seen the community come really vocally around specific things they wanted.
I imagine as the project evolves, people will continue to voice their opinions, but I think there’s another problem in that. They’re like, “Hey, I don’t necessarily know what I want. I want the token to go up, but what do I do?” And in that sense I think there has to be communication and discussion in forums like this where we can help to understand their needs based on their portfolios and then give them tools to grow their own portfolios or to meet their own agendas. I think a lot of that is stuff to be decided later on. For now, I think this is cool.
In terms of questions, we have probably addressed everyone except Marina, who had questions around partitioning and valuing different rewards, which I believe you just addressed, but we might want to do a write-up or a follow-up conversation more on that.
Sifchain: So Josh, this has been really good. I think we’ll probably pick up from here with our chat with Zargham and then I imagine we’ll get a couple of investors from our team and then some who haven’t invested in Sifchain to continue this because this conversation is really important, and I imagine a lot of people are really interested.
MetaGov: Thanks for having me. It’s been a pleasure.
Sifchain: Absolutely. All right. You can see this on YouTube and a variety of other places, For now, Josh, take care.
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