1/ A brief summary of Ralph Merkle's DAOs, Democracy and Governance paper.
2/ Lengthening lifespans, increasingly lethal weapons, the coming of AI and other rapid technological developments make governance ever more important
3/ Unfortunately, most of the governance systems that exist today function quite poorly.
4/ This includes democracy, which has five core problems.
5/ First and second, voters have very little incentive to vote as it's unlikely their vote matters and making an educated decision takes a huge time and energy investment.
6/ It's also depressiongly easy for politicans to misinform voters or just lie to them about what they are going to do when they get in office.
7/ The "ideal democracy" should accurately reflect the will of the people.
8/ @RobinHanson has suggested one way of achieving this is futarchy. Futarchy argues for letting individuals vote on their welfare (how good they feel their lifes is).
9/ and then use prediction markets to aggregate knowledge from a community of people and use that to decide policies. "Vote values, bet beliefs"
10/ Merkle suggests using a measure called "Democratic Collective Welfare" where each citizen picks a number between 0 and 1 to rate their wellbeing.
11/ All citizens' votes are tallied into the Annual Collective Welfare (ACW) which, when weighted to include future years (so people couldn't bet on policies which would help in the short term, but not in the long term) would be the DCW.
12/ Traders would then trade bonds betting on the ACW if certain policies are implemented. Traders are incentivized to make the best decisions possible in order to earn a return on their bonds.
13/ This system is enabled by the emergence of Decentralized Autonomous Algorithms (DAOs ).
14/ Bitcoin, the first DAO is a a new form of life.
15/ Anyone who can code can create a DAO and so anyone that wants to create a new form of life can do so. A DAO could be a currency exchange, domain service, prediciton market, company or even a government.
16/ A DAO Democracy would act as a replacement for Congress where prediction markets would pass or reject legislation. It would be rapidly acting, able to take more complex action and form opinions from multiple sources.
17/ In a DAO democracy, anyone could propose a bill and it could be submitted at any time. If the prediction markets that believe it will have a positive impact on DCW, then it will be adopted.
18/ A DAO democracy would be self-improving.
19/ The president could be elected based on the individual whom prediction markets determined would most improve the DCW if elected president.
20/ Likewise, the Supreme Court or any decision that can be rendered into "yes/no" or "a/b/c/d" format could be made using a DAO Democracy.
21/ What about the tyrrany of the majority though? In the case that the best solution was to split two separate groups, a DAO Democracy could do that
22/ This is a fascinating thesis though there are some clear problems and drawbacks. One drawback is existential risk. Suppose prediction markets are evaluating a policy that seems likely to end well but with a small % chance of causing the world to end?
23/ Compared to present day governance systems, DAOs have great transparency and lower risk of corruption.
24/ Another potential problem is how the DCW metrics are chosen. You could end up in a Aldous Huxley Brave, New World or The Matrix scenario where wellbeing is optimized by turning humans into sheep.
25/ It's also a question whetehr a DAO that has a metric other than the DCW outcompete a DAO Democracy.
26/ A DAO Democracy solves many of the problems in existing democracies (though it still requires a vote in the form of a 0 to 1 ranking of welfare).
27/ A DAO Democracy eliminates the need for ordinary citizens to evaluate candidates and issues or wade through misinformation.
28/ It also makes it less important whether a candidate does what they said they would (since they can be removed by the prediction market).
29/ How could a DAO Democracy come to exist? One option is Gradual adoption where an existing organization uses an anual poll to establish the welfare of it's members then implements a prediction market.
30/ Another is rapid adoption where a group of young, idealistic or desparate individuals tries to start one from scratch (perhaps through Seasteading?)
31/ In summary, Merkle says "We can create a DAO Democracy capable of self-improvement which has unlimited growth potential by modifying futarchy to use an unmodifiable democratic collective welfare metric, adapting it to work as a DAO.
32/ The result should be something that uses a transaprent and very hard to corrupt digital technology that is largely impervious to corruption, bribery, irrational bias and many other problems with todays' governance systems.
31/ Original Paper: merkle.com/papers/DAOdemo…
