New section on the governance of virtual communities, peer production communities but especially blockchain-type collaborations.

Quotes

"Within blockchain-based governance mechanisms, standard token voting practices rely on the neoliberal notion of “voting with your dollar.” Like the capitalist market, this means wealthy investors can simply purchase large amounts of tokens on the market in order to hoard voting power. This system allows these capitalist robber barons, or “whales” to greatly influence the outcome of proposals submitted on “decentralized” applications. In other words, financial power becomes directly correlated with political power."

- Breadchain [1]

"Prevalent among communities forming around blockchain technology more specifically is an emphasis on relegating governance to automated enforcement by a protocol, coordinating the otherwise free actions of actors in the network. More than a technology, blockchain has come to represent a powerful narrative and governance ideology (Reijers and Coeckelbergh, 2016), promising the possibility of automating governance, understood as the coordination of individual actions at aggregate scales. This idea has manifested in different approaches to governance in blockchain communities, which we discuss in part one of this article as materialist, designer, and emergent ideas, and approaches to governance relating these to three evolutions of governance theory (Mayntz 2003). Blockchain is a particularly fruitful context for discussing dissensus as it is navigated by online communities because, as an ideology, it so explicitly seeks to achieve consensus through technological arrangements."

- Kate Beecroft et al. [2]

"When we look at current “grafting” proposals like the Fei Protocol and Rari Capital merger, or the xDai and Gnosis merger, what we’re seeing is two organisms coming together as one, rather than corporate shells consuming each other as with traditional mergers. These are communities that are integrating, not employees changing offices and titles. We are much more than employees in a DAO: we are owners, voters, curators, ambassadors, and pathfinders. Our language should accommodate these characteristics, and the comparisons to ecology and horticulture are far too apt to ignore. .. This shows us that building and improving the tools and platforms for DAO communities to work together will have immense impact, and will produce powerful interactions that transcend industries and unite competitors. When these communities can easily and trustlessly collaborate, coordinate, and negotiate, they will no longer view project-specific problems as ones to be solved in isolation, but ones to be tackled together. This shift in perspective is essential for a thriving DAO ecosystem."

- Numa Oliveira et al. [3]

"Voting happens all the time in crypto. Participants in decentralized autonomous organizations (DAOs) vote on software updates, treasury allocations, and pizza toppings according to rules encoded on a blockchain. They tend not to vote for politicians to represent them; they vote on proposals, or they delegate their votes to other users in a “liquid” system, enabling them to withdraw the delegation at any time. Power over group decisions doesn’t come from party platforms and political contributions; it may come from metrics of participation in the group’s project, or from the duration of one’s conviction, or the intensity of it. Before anyone votes, a prediction market might highlight which proposals are worth considering. The possibilities of voting are becoming so exhausted in crypto, voting is already going out of vogue."

- Nathan Schneider [4]

How the Resistance to Crypto Created More Innovation

"As crypto has developed, there have also been waves of resistance. In the 1990s, with the advent of PGP, the US government freaked out and reclassified cryptography as munitions. They literally said that encryption was armaments, and it became illegal to export from America without a licence under what was called the ITAR [International Traffic in Arms Regulations] regulations. ITAR drove a huge number of cryptographers out of America and a lot of those folks wound up in a place called Anguilla and formed an early crypto island community there. That’s also where you began to see the hybridisation of offshore finance in cryptography, and some people would suggest that that was where you got the birth of some of the stuff that became crypto economics that we started in the late 1990s.

One of these waves of resistance led to the fall of E-gold in 2005. E-gold was a perfectly reasonable gold-backed digital currency system: fully centralised, no real use of crypto, it was a very successful platform. You could transfer $100,000 from one cell phone to another cell phone in the late 1990s for 50 cents, instantaneously, and that was all gold-backed, it was essentially gold-backed stablecoins. That system was effectively shut down in 2005, when the FBI raided its offices over E-gold’s use in criminal activities and confiscated its equipment and files. I would say that almost everybody thinks that the fall of E-gold was the thing that triggered Bitcoin. It was a case of if there was going to be another E-gold and it was not going to get shut down by the government, then it was going to have to be decentralised. The response from the crypto community to E-gold, was Bitcoin and the blockchain, and that led to what we now know as the whole cryptocurrency space."

- Vinay Gupta [5]

Status

WE ARE NOT THERE YET, shows Rebbeca Grace Rachmany:

"The promise of DAOs has been to create more advanced decision-making systems. Yet, to date, the DAO technology has provided little more than voting and funds allocation mechanisms. To govern at a global level has become an imperative in the pandemic, which affects all human beings on earth. Managing this crisis and those to come requires the development of technologies that cover all aspects of discussion, collaboration, proposal-making and accountability."

(https://www.coindesk.com/tech/2020/09/21/daos-will-never-govern-the-world-at-this-pace/)

Typology

of governnance mechanisms:

• Consensus Algorithm
• Voting in Blockchain Communities
• Staking in Blockchain Communities
• Forking in Blockchain Communities
• Dissensus Protocols

Key Resources

Key Articles

• Limitations of Cryptoeconomic Governance Mechanisms. By Nathan Schneider.