Hacking the Vote: Three DeFi Innovations Powering a New Dawn of Governance.
Ethereum DeFi protocols are paving the way for new tools to empower and protect the interests of community members.
tl;dr: Legacy Governance models are outdated and ineffective. The boom in DeFi Governance tokens is bringing innovations that transform political power and strengthen community autonomy.
In the recent years, Big Tech, Big Finance, & Big Media have quietly aligned to exert historically unprecedented control over our perceptions of reality. Together, they are steering the organic flow of information and affecting the freedom of Autonomous Communities worldwide.
At the nexus of these forces, lie legacy Governance Models that are broken, outdated, & ineffective. Like the eye of a hurricane, Centralized Governance today is an empty void surrounded by chaos.
Meanwhile, on the Ethereum Blockchain, hope is flourishing 🌈. Programmers and thought-leaders are ushering in a renaissance of transformative blockchain-based Governance models. The speed of innovation is electric. Optimism is so high, it’s almost rolling up.
The New Value of Governance
In a tangible, historical sense, Governance exists to grant privileges and responsibilities to groups of organized individuals. Ethereum, with the power to automate trusted transactions, has opened up a new playing field for experimental governance technology.
In the recent months, DeFi Governance tokens have exploded, offering unique opportunities to explore community ownership and autonomy using secure & publicly verifiable mechanisms.
Fair Governance requires Fair Launch
While Ethereum DeFi can provide a space for public, secure & immutable Governance models, building a Governance community is not as simple as deploying code.
DeFi protocol creators and developers try to distribute their tokens widely. Token distribution to liquidity providers is an effort in that vein. However, the reality of these projects often falls short of expectation. Take, for instance, the yield farming phenomenon. Funds and wealthy investors, aka whales, are maximizing their benefit/share of governance tokens using recursive provisioning of liquidity. This ultimately leads to a concentration of these tokens into the hands of a few players/farmers.
(Token Daily, Newsletter #43)
Read more about the $ZUNI community.
Considerations
Geographic and Cultural Hyper-localization
Meaningful Distributed Governance requires a sufficiently large pool of dispersed participants. Key barriers, such as language gaps, cultural gaps, and knowledge gaps must be overcome prior to launch.
Distribution Mechanics & Initial Designs
Initial conditions tend to have lasting influence. Careful consideration must be given to spreading information & setting initial parameters to effectively reach a broad user base. Gavin and the Fair Launch Team have good ideas here.
Fragmented Communication Channels
Meaningful Distributed Governance also requires meaningful forums for discussion. Social Media channels are often censored or easily gamed, resulting in suppressed expression & fragmented discourse. Check out Boardroom.
Three Innovations shaping the future of DeFi Governance.
Synthetic Minnowing
Introduced by EJ Spode, Synethetic Minnowing is a method of encouraging actors with substantial pre-existing power to take actions that align with those of the everyday user. For example, in the Real Estate industry, most jurisdictions have zoning laws that prohibit a large Property Developer from buying up a tract of houses, demolishing them all, and building a giant castle. The Property Developer could still buy up the houses individually, and manage them for profit, but could not disrupt the neighborhood at large.
This is a form of Synthetic Minnowing: coaxing a large power to deploy capital in a way that is not disruptive to a pre-existing ecosystem of smaller fishes. Read more about our approach.
Liquid Democracy
In a Liquid Democracy, political power is fluid, and can be revoked by the people at any time. The delegation of political power is done directly from person to person, enabling efficient voter participation and robust decision making. If a Delegate moves to enact a policy that bucks with their supporters, the supporters can instantly revoke political power, preventing the bad course of action before it even begins.
Quadratic Voting
Token-Based Voting power is often heavily skewed, with the wealthiest participants having considerably more power than the everyday user. Quadratic voting takes the square root of votes instead of counting them nominally, prevent large wealthy users from having too much influence over the ecosystem at large.
Along with others, these mechanisms can better achieve the goal of broadly distributed, meaningful Community Governance, starting from day 0.
ZuniSwap exists to deploy meaningful community governance over common ecosystem utilities.
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Our Pre-Launch Gitcoin Grant is live. We thank all our Supporters, and are working very hard to deliver the best $ZUNI possible!
