Protocol Politicians and the Emergence of New Institutions in Cryptoeconomic Ecosystems

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Nathan Schneider:

"Julia Rosenberg and Maria P. Gomez Gelvez of Orca Protocol have noticed a phenomenon that the cryptoeconomic confidence machines were supposed to do away with: the emergence of “protocol politicians” who gain outsized power through delegated tokens (personal communication, May 20, 2021). Ina quest to create a “people-first” system for “governance that works,” Orcainstead enables DAOs to delegate decisions more intentionally to various“pods” of qualified users. Joining a pod requires some cryptoeconomic ante,such as staked tokens or evidence of participation. But once over that threshold, pod members deliberate and decide in a less-economic virtual space, where they can be insulated from the short-term incentives that might otherwise steer a vote among token-holders at large. The pods are a way of carefully re-inserting pockets of trust, and of human politics, into technology that was supposed to be trustless. Recent cryptoeconomic practice appears to be reinventing some old wheels of institutional life. The Kleros judiciary, the board-like Graph Council, the constitutionalism of 1Hive, the protocol politicians — they are not the same as their old-world counterparts, but their reappearance also suggests a growing recognition of the need for political institutions in some form. The implementations break from past practice in intriguing ways, often opening the doors wider for participation and transparency. Yet if mechanisms such as these rely on cryptoeconomics as their sole logic, their feats of liberation will come with limitations on the range of motion for governance."