So I spent some time reading the paper this weekend, and took a couple of margin notes. A few quotes and my brief thoughts as I go through them:
The concept of a modular governance system really spoke to me.
Such mechanisms as elections, boards, term limits, and transparent decision-making are norms for any incorporated entity in robust legal regimes, but to the extent that they do occur in online networks, they are costly to build and maintain, and they typically must be implemented by means extraneous to the feature-set of the network’s platform itself.
Governance is important, but secondary to most project’s core competencies
Portability: Governance tools developed for one platform should be portable to another
platform for reuse and adaptation.
It’s not a governance system, it’s a governance protocol. It doesn’t judge/value the content but provides a framework to process it as a community.
Independent units of these platforms may be seen to adopt many types of governance styles, but considered as populations of populations, they can be characterized by the freedom users have to exit any one community for any other—that is, they favor “exit” over “voice”
We don’t have good systems for keeping oppositional parties involved in communities right now, so they become monopolized by one governance style or oligopolic leadership
Self-organization is also evident in the ability of communities to develop and sustain widely held informal norm systems
It’s often the emergent rules that are most powerful and important
a tension captured by “Ostrom’s Law,” which asserts that “a resource arrangement that works in practice can work in theory”
This commitment to the experiential component of design was important to the Ostroms, who emphasized the craft of institution design and likened its practitioners to artisans
By instituting governance as a protocol with modular component architecture, you can iterate more freely and also make the process of getting it right more technical and, ideally, changing it less emotionally charged.
Through an SDK with an intuitive interface, Platform operators and participants alike might browse existing Modules or create their own; they might also adapt, customize, and debug these Modules before importing them into an Instance.
If implemented as an open standard, rather than as a centralized platform, Modular Politics could
contribute to furthering the vision of what has been called “Web 3.0”—an open and interoperable
network of online services that resist the tendencies of centralization that have become so persistent
on the Internet today. In the context of governance, this means that a particular community could rely on a variety of integrated services in order to achieve a particular governance structure that
spans across multiple platforms.
I think what this paper is describing is the next level of the types of governance we are seeing in DeFi right now. For instance, Compound’s Governor Bravo, along with OpenZeppelin, are offering open source governance solutions that basically are this SDK. These systems have been widely adopted while being slightly tweaked, and there is even a live vote on Uniswap to upgrade to Governor Bravo from Governor Alpha.
What we haven’t seen yet, however, are interoperable governance systems that work across platforms. What we’re left with so far is basically three options that can loosely be termed Meta Governance.
In option 1, a community like Index Coop votes on what to vote on the underlying proposal. Since there are 48.2m UNI held by DPI, then INDEX holders vote on what to vote in UNI governance.
Option 2 is a pass through. I haven’t really seen it, it’s complex and costly.
Option 3 is what we are working on at xToken (disclosure: I am on the team). We’ve developed mandates that indicate how the fund will interpret proposals. Over time as more proposals are voted on the body of precedence increases, and the community can also give us feedback on how the mandates are applied.
But as DeFi grows, so too will the types of stakeholders and ways of interacting. Due to the inherent composability of DeFi, when one protocol changes course, often other protocols are impacted. Sometimes they are collaborators, and sometimes competitors, but they are also stakeholders!
I think the direct governance questions are being addressed right now, but the need to have a more flexible cross-project interoperable governance layer is only beginning to be addressed.
Thanks for the opportunity to read and discuss!