Top 5 Learnings From CryptoOracle’s Governance Meetup on January 9th
On January 9th, we held a NYC Governance & Conensus Meetup featuring a Fireside Chat with Matan Field , Co-Founder of DAOstack, and…
On January 9th, we held a NYC Governance & Conensus Meetup featuring a Fireside Chat with Matan Field , Co-Founder of DAOstack, and thibauld Favre, Founder of The Continuous Organization. The Fireside Chat and Q&A session we’re 50 minutes of Governance gold. You can watch the entire event below…
… or you can save some time and read about our seven major takeaways from the Meetup:
1. The challenge is to enable a large “organizations” (with tens of thousands of people, or more) to make large quantities of high quality decisions (thousands or tens of thousands a month).
Matan discussed “Holographic Consensus”, whereby you can get small groups of decision makers (say 20), to reflect the global opinion of the DAO (with tens of thousands or millions of people). Matan calls this holographic consensus, as it’s similar to a hologram, where every little piece of the picture actually contains the information of the entire image
Matan suggested that one way to solve this problem is via a a crypto-economic game, that translates social arbitrage in to economic arbitrage. If someone thinks that a decision does not reflect the will of the majority, they can bet against it. Then all you need is someone taking the other side of the bet, and the system can then guarantee that a decision reflects the majority.
Thibauld indicated that they were able to get 150,000 people to participate in nominating someone for President of France by reducing the level of attention needed to finish the process to 5 minutes. Not surprisingly, minimizing the time needed for participants to “vote” is critical to engaging an audience.
2. When DAOs work at scale, no single person, or even small group of people, understand what is going on
I thought this was a super interesting point that instantly makes a DAO different from previous organizational structures where someone, or some small group of people, are aware of the key happenings. At a high level, it’s easy to appreciate how that limits the speed and scope of previous organizational structures
3. Bitcoin is governed by an absence of governance
I had previously thought of Bitcoin as having a dysfunctional governance system that left it governed by exit (in other words, if you’re unhappy you can leave or fork). I think governance by absence of governance is a more nuanced way to think about Bitcoin. The only real decision able to be made is which protocol to run, and that’s voted by client downloads.
4. DAOs enable a direct link between a vote and an action without people in the middle
With centralized governance, the voting is often just the beginning of a process where people get involved, and the outcomes are often dramatically different from what was voted for. Brexit is a great example of that. The British people voted for Brexit, and here we are, more than two-and-a-half years later, and there is no action in sight. In a DAO, a “vote” can be directly linked to an action without the need for any human intervention.
5. Insurance is indicative of the type of industry ripe for DAO disruption
It makes sense that common goods have challenges that can be well addressed by DAOs, because of the inherent conflicts of interest. The insurance industry was highlighted as being ripe for DAO disruption given the inherent conflicts of interest in the industry (e.g. not wanting to insure people with pre-conditions, not wanting to pay claims…).
6. Allocating reputation (i.e. voting power) is key to a successful DAO
The promise of a DAO is to enable those that are most informed about a given topic, to have a “reputation” that reflects that knowledge, and to have informed people “vote” on decisions in their area of expertise. As opposed to a “flat” democracy, where each person gets one vote, DAOs can allocate votes to those best informed to make the best decisions. DAOs will evolve so that reputation flows continuously, enabling good decision making to be reflected in better reputation. Matan expects there to be thousands of reputation allocation methods, and the the ones that thrive will be copied and pasted.
7. Voting Does Not Need To Be Binary
Thibauld gave the example of Majority Judgment (as opposed to Majority Rule) as a voting system that can be multi-dimensional and enables a mechanism whereby an apathetic majority does not necessarily defeat an intense minority. Other forms of voting that accomplish this same goal, the most widely known being Quadratic Voting.
There were lots of other great points raised, including the lack of legal frameworks governing DAOs to enable them to be in compliance with legacy legal frameworks, and dispute resolution mechanisms.
We’re in the very early days of decentralized governance, and we’re excited to track the progress of this emerging field, and do what we can to further the dialogue. Let us know if you want to start a Governance & Consensus Meetup in your city (email us at info@CryptoORacle.io). As we grew CryptoMondays to more than 40 cities around the world, we look forward to growing the Governance & Consensus Meetup ecosystem.
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