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1/This week at #Aracon2019, I would like to explore some core themes around #DecentralizedGovernance and #DisputeResolution together with the #crypto community working on related projects. @devinawalsh @coinfund_io @AragonProject @stefanobernardi @CambrialCapital 👇
2/THEME ONE: Are governance tokens valuable?
Token models have "eroded" somewhat these past few years: it's hard to make a token accrue value! But governance is being touted as one of the few activities fundamentally valuable to a network. How does this actually work?
Token models have "eroded" somewhat these past few years: it's hard to make a token accrue value! But governance is being touted as one of the few activities fundamentally valuable to a network. How does this actually work?
3/There are actually not too many *actionable* models in this space that I can find. But there are some. . .
4/@PhilJBonello has put forward the only *quantitative* treatment that I can find which describes that the value of a governance token as being proportional to "the net cost of forking. . .the network" and actually calculates it. hackernoon.com/a-framework-fo…
5/Another model is that of "exit rights", described by @lkngtn at #RabbitholeTalks: a DAO's tokens often entitle holders to *underlying value* held by the organization and subject to T&Cs. Check out the talk ( ) and slides (slideshare.net/OlgaCoinFund/a…).
6/One criticism of the "exit rights" model is that it doesn't actually *solve* valuation, it simply punts the question to the underlying (crypto)asset. However, #ExitRightsValuation is pleasantly quantitative and all the T&Cs are codified on-chain, making them ripe for analysis.
7/Remember #TheDAO from 2016? $DAO tokens were, quite literally, exit rights. This lead to a cryptoeconomic bug that caused TheDAO to "leak Ether" until it (may have) eventually evaporated.
blog.coinfund.io/jentzsch-radia…
blog.coinfund.io/jentzsch-radia…
8/THEME TWO: How does #DecentralizedGovernance and #DisputeResolution actually work?
Should it be on-chain or off? How does a system philosophically approach the tradeoff between immutability and practical recourse in a system? Is DR practical in a decentralized context?
Should it be on-chain or off? How does a system philosophically approach the tradeoff between immutability and practical recourse in a system? Is DR practical in a decentralized context?
9/There is *a lot* to say on these topics. Both @VitalikButerin (vitalik.ca/general/2017/1…) and @VladZamfir (medium.com/@Vlad_Zamfir/a…) have variously advocated for #OffChainGovernance.
10/In fact, governance in general, as studied from a mathematical lens, is *really hard*. There is 200+ years of research on social choice & voting theory, rife with impossibility proofs and trilemmas. Some examples and references here:
11/Most #DecentralizedGovernance projects have not even gotten to this kind of "formal" solution, but thinking this way may indeed prove useful as demonstrated the paper "Crypto Public Choice" by @chrisberg, et al.
chrisberg.org/2018/08/crypto…
chrisberg.org/2018/08/crypto…
12/@AragonProject specifically is contemplating on-chain governance and voting systems with dispute resolution.
blog.aragon.org/aragon-network…
blog.aragon.org/aragon-network…
13/To get a sense of the difficulty of the on-chain space, recall the 2016 "TheDAO Report" by @el33th4xor which identified over 10 possible attacks on the on-chain governance system of #TheDAO. docs.google.com/document/u/2/d…
14/THEME THREE: How does #DecentralizedGoverance and #DisputeResolution actually mesh with the real world?
Also a topic often ignored by #blockchain. Yet there is *a lot* to be learned from the way that real jurisdictions handle the decentralization issues of the internet.
Also a topic often ignored by #blockchain. Yet there is *a lot* to be learned from the way that real jurisdictions handle the decentralization issues of the internet.
15/Reflecting on @BitTorrent after its recent acquisition, former CTO #SimonMorris describes how this decentralized system fared in the real world: its decentralized architecture posed serious legal challenges to plaintiffs bringing claims across the world's jurisdictions.
17/More research is warranted, but a case is starting to emerge there are real use cases for global cross-jurisdictional dispute resolution. For one, virtual worlds are actually real worlds as far as claims and jursidictions are concerned: lw.com/thoughtLeaders…
18/jurist.org argues there are plenty of cases for virtual courts already, with some courts using Internet technology for cases today: jurist.org/commentary/201…
19/This piece, h/t @nc0we, references that despite international conventions like the NYC, most international merchant dispute resolution takes place in private arbitration and outside of state courtrooms. fee.org/articles/the-l…
20/These are all fascinating topics to dive into, and I hope to discuss them more with the #crypto community at #Aracon2019. Join me!
