Smart Contract Summit 2021: Governance Implementation Panel

SCRF has been invited to host an independent research track as part of the 2021 Smart Contract Summit. We’ve chosen to present five panel discussions that touch on some of the most timely issues facing the blockchain space: “Identity and Reputation”, “Governance Theory”, “Governance Implementation”, “Privacy and SNARKS”, and “CBDCs and Blockchain”.

In this series of threads, we will be providing some deeper insight into the panel topics, the participants, and where interested viewers can find their most relevant works.

What is SCRF

The Smart Contract Research Forum (SCRF) is where academics, researchers, and industry leaders from all over the world come together to discuss research, solicit thoughtful peer review, and find new projects on which to collaborate. You can find additional information about our programs, grants, and initiatives in our repo; or feel free to join us in our chat.

About the Governance Implementation Panel

What kind of challenges have been faced in communities that have exited to DAO’s recently? Governance is a topic that is relevant to every decentralized protocol, especially for organizations looking to engage the community to run with certain decision making. This panel explores some of the experiences of practitioners who have started using DAOs in some capacity and gets into the question of governance as a whole.

Full Video

Transcript for the video.

Panelist Bios and Relevant Works

Connor Spelliscy

Connor is the founder of the DAO Research Cooperative, which leverages group buying power to accelerate DAO functionality by procuring and open-sourcing research foundational to effective DAO operation, and a co-founder of the Blockchain Association.

Relevant links for Connor:

Leighton Cusack

Leighton is co-founder of PoolTogether Inc., a protocol for no-loss prize games on Ethereum.

Relevant links for Leighton:

Seth Frey

Seth is a cognitive scientist and computational social scientist, specializing in the study of self-governance, mainly by leveraging the unique amenability of online communities to large-scale quantitative approaches.

He is a professor in Communication at the University of California Davis and an affiliate of the Ostrom Workshop at Indiana University. Seth was a behavioral economist at Disney Research Zurich in Walt Disney Imagineering, a Neukom Fellow at Dartmouth College’s Neukom Institute, and a student at the New England Complex Systems Institute. He earned a Ph.D. in Cognitive Science and Informatics at Indiana University in 2013, and a B.A. in Cognitive Science from UC Berkeley.

Some of Seth’s work:

Relevant links for Seth:

Scott Moore

Scott is a co-founder and community lead for Gitcoin, a platform and protocol for building and sustaining web3 public goods. He’s also previously played a supporting role in a variety of other organizations focused on this mission including the Digital Public Goods Alliance, Ethereum Foundation Grants, and SustainOSS. To date, Gitcoin has distributed over $25M to open source developers around the world.

Relevant links for Scott:

Kelsie Nabben - Moderator

Kelsie Nabben is a researcher in the RMIT Blockchain Innovation Hub and a Ph.D. candidate in the Digital Ethnography Research Centre at RMIT University. Her interests are in resilience in decentralised technologies.

Some of Kelsie’s work:

Relevant links for Kelsie:

Key Questions for our Panelists

Some of the questions we’ll explore during the panel include:

  • What experiences have you had on community governance more broadly? What are the challenges in decentralizing to collective ownership?
  • Aaron Wright says there are two types of DAOs: “participatory and algorithmic”. What are the differences in ontology, design, and practice? What do we think of the attractiveness of each of these?
  • In what ways are blockchain projects transitioning to DAOs.
  • What tools, frameworks, or examples are there for decentralized governance?
  • DAOs often focus on voting mechanisms, when this is a last mile expression of preference in a much broader political process. While mechanisms are emerging for specific processes (e.g. voting), there is less emphasis on design parameters for the broader, political institution or organisation. What tools, resources, or advice do you have for those working on DAOs?
  • How do you quantitatively measure the success of a DAO? I.e. through churn, gini coefficient, engagement, agency? How do DAOs determine, clarify, and align objectives?
  • How expensive is personal agency? How much do your stakeholders want?
  • What are the key challenges or pitfalls for DAOs to work on solving?

Watching the Panel

The Summit is taking place virtually from August 5-7. You can find the most up-to-date schedule and get your free tickets here.

7 Likes

Be sure to read a summary of @kelsienabben’s piece on the History and context of DAOs as experiments in algorithmic governance towards "autonomy"

6 Likes

Really enjoyed this panel discussion. It’s amazing to see similar themes surface across DAOs. A lot can be learned from sessions like these between DAOers.

5 Likes

Really love this discussion. It’s interesting and endearing to have these innovations and think about their probable usages in the future. I believe DAO will create a fairer governance mechanism. Maybe it could be more emphasized that society has its habitual or established practice, which people get used to it even if it’s defective. Thus, though a mechanism that is fully without hierarchy sounds cool and maybe more beneficial, which is waiting for us to experiment, is it better to develop a DAO which is more fit in the current mechanism but resolves some existing problems so that it can convince the public to take it into effect? This may involve the first question that what the definition of DAO is. For example, a DAO mechanism that can be used in a company to let shareholders vote and execute automatically may reduce some existing problems such as agency problems or information slips, while let it still align with the established principles such as separation of ownership and control so that it can fit in the current legal frameworks. I mean, a DAO project which can resolve some existing problems and also achieve some DAO goals with smart contracts’ functions. Could this development direction, which is not too radical, make the funding and the adoption easier? I also wonder do we have some DAO projects like this?

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At 35:05, the panelist shared that in the dynamics of a DAO, it’s very often that no one votes against anything. He thinks this could become a risk factor. It will allow people to push through anything they want.

This might be the case because there isn’t that much staked in the decisions. Consider our polarized society. It reflects what people are. They speak up loud when something that matters comes.

2 Likes

The discussion about how to encourage/force ppl participating in voting and the running of DAO is cool.

However, here’s my hot take: It’s not gonna happen, at least the portion of meaningful voting won’t be higher than the effective phone polling results.

Here’s my thinking flow, please bear with me.

  • At first, you think of those gamified UX/UI designs in your Chinese mobile apps and Japanese gacha games. They provided financial incentives and emotional incentives (ding ding sounds and fancy chest opening effects) for you in exchange for your laborious tasks (in-game or in-app activities). This increases their DAU/MAU and some other meaningful stats to their investors.

Takeout: Does the problem of DAO’s decision process really lie on fundamental mechanism design, such as the possible ways of participation? Maybe we just need a completely different thinking angle - can we try to incorporate voting process into user’s daily computer using flow (like, receiving email, swiping ticktock/instagram), in order to reduce the mental hurdle of executing such a task - be it voting or other ways to participate the DAO?

  • Although this kind of toxic UX design(mobile game example: x days login streak; one more voting to get 10 diamonds) are considered bad practices - it did increase the ratio of EventParticpatingUser/TotalActiveUser.
    I know this sounds impractical, but it’s the same thinking process of univ’s class survey - if students don’t open mails, take the freaking10pageslongsurvey - we just block them physically and ask them to fill in the survey one by one, and handing out gifts and smiles of cute receptionist along the way (instant gratification+incorporate extra task into their established task routines).

  • Be aware that players often argue for the amount of prize, instead of the properties laborious task itself - the joyfulness is ignored, they rated it as prize/time taken.
    That is, they (the designers) know that when you put a price on some task, your internal motivation is soon gone.
    For example, you were asked to do some lego, but were told that either: these lego are gifts for children, or complete these lego for 0.5$ each.
    The latter produced significantly fewer legos than the former one.

Takeout: How can we avoid this in DAO voting design? Apparently keep increasing the token awarded is not enough, it could cause the opposite result and a bunch of extra issues.


Even after so many attempts to increase the “conversion rate”, and ultimately we still have to judge about what do we really need:
-a small amount of ppl doing mentally demanding decisions.
or
-a huge amount of ppl doing knee-jerk decisions, and greatly affected by questionnaire design.

(I don’t think an ideal situation where a bunch of ppl doing mentally demanding decisions would exist. It’s not even happening when launching nukes (see Russian submarine example).)

My hot take: No matter how much you’ve reduced the mental hurdle and raised the amount of awarded incentive token, it’s gonna be the same.

That is, ppl don’t get to participate in direct democracy in a meaningful way, cause they got overloaded with excessive information.

I believe, some kind of key opinion leaders - effectively working as curators(ding ding scientific journals) - is needed. We don’t decentralize our trust into two or more voting statements; we trust people, and it’s human’s original sins.

Better formalize this (key opinion leader) in case ppl try to manipulate some very important decisions in the future.


TBH we shall ask ppl in political science though - I bet I myself just reinvented some political science 101 which was being taught like since 200 years ago.

(I feel like I need to show my own stance - personally I’m very optimistic on the progress of direct democracy/direct participation of organization, and DAO as an enabler to them - I’m still fairly pessimistic, on whether ppl would embrace this paradigm. It’s just not possible, as a human nature, for us to participate in so many things even if that means you can get so many great power/benefits - ppl would just shut down.)

3 Likes

Wanted to share a couple of the resources that the panelists mentioned in the conversation that I found particularly insightful. Highly recommend giving these essays a read!

  • Money, Blockchains, and Social Scalability by Nick Szabo (rec by: Leighton Cusack). As Leighton summarizes, smart contracts lower the cost of trust. What is being automated by DAOs is the human trust required for relationships. More trust means more relationships and more coordination to achieve good things together. Interestingly, the specific trade-offs that Szabo cites (resource consumption, time, etc.) ties to the slow bureaucracy protecting the consistency of expectation point raised in the Governance Theory panel.
  • Many-Headed Hydras: DAOs in the Art World by Aude Launay, Penny Rafferty, Ruth Catlow (rec by: Scott Moore). Culture should determine technical infrastructure, and not the other way around. Catlow describes a disconnect between the attitudes/life experiences/ vocabularies of critical contemporary arts cultures, and the values reflected in what is actually tokenized/codified/written into smart contracts in DAOs — and some experiments to better align the two.
  • A Prehistory of DAOs by Kei Kreutler, Gnosis Guild (rec by: Scott Moore). By learning from their prehistory (platform cooperativism, massively multiplayer online games, etc.), we observe that people and collective vibe are at the heart of any DAO — they don’t go to the edges and cannot be fully abstracted away. DAOs must go beyond technical protocols for governance and realize their goal is to create compelling digital spaces people want to inhabit, recognizing narratives, aesthetics, and common goals are key.

re: the conversation on what is being automated / when it becomes too much: agreed that blockchain creates an abundance of trust, which seems to be a good thing if it allows us to scale beyond Dunbar’s number and exist in many squads connected to a larger network. The phrase “change happens at the speed of trust” comes to mind — if trust is abundant, the world moves faster, stability itself becomes scarce. It seems like consistency of expectation would fray when stability frays… There’s a difference between the trust of open source/transparent code, and the trust of small/intimate mutual aid circles. How do these two types of trust serve different purposes?

5 Likes

I’m not sure you necessarily reinvented it, but this certainly has some of the characteristics of Robert Dahl’s perspective of what pluralism is in practice. The Wikipedia entry on Dahl does a good job giving an overview of his thought as well as a list of key papers, references.

TLDR: Dahl is a pretty staunch pragmatist that is essentially trying to understand how democracy functions in practice and optimize around that. This involves interest groups and key people because they have the resources (e.g. time, money), interest, and expertise to best make use of the mechanics of a governance system.

Maybe not exactly what you were saying, @Jerry_Ho, but I definitely saw some parallels. As DAOs are implemented, it is going to be important for governance system designers to account for, and maybe even work with, the unequal nature of collective human collaboration. That does not necessarily have to be manipulative. Perhaps the more that it is made transparent, the fewer opportunities for that manipulation to exist.

2 Likes