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MIT Law Column ::: (Mis)adventures in Crypto-Governance II (May'23)

Tour d'Horizon is a recurring column from Wassim Alsindi that navigates the epistemic territory between disciplines, seeking novel frontiers for Computational Law.

Published onAug 28, 2023
MIT Law Column ::: (Mis)adventures in Crypto-Governance II (May'23)

Originally published at

May ‘23, Berlin
For this third edition of my column Tour D’Horizon (catch up on the first and second here), I’d like us to get a little more up-to-date as we continue on our survey of crypto-governance. This time we'll review efforts to use novel technological scaffolds to build organizations, institutions, and community infrastructure in the virtual realm. As you might recall, we kicked off this (mis)adventures series with the line between Aristotle and Bitcoin. Let's go a little further afield now and survey the last ten or so years of blockchain (un)governance.

"Why do we need more governance? Bitcoin is enough!" I hear cat-called from the metaphysical gallery. Well, what is governance anyway? As we intimated in my previous column, governance is the process through which rules can be instantiated and decisions can be made. A dance as old as time. Governance includes both the process of reaching decisions, as well as the design of the structures which facilitate their arrival, and the distribution of resources. The steering, and the vehicle alike.

The Steering and The Vehicle Alike”, meme of unknown origin quoting Alexis Carrel.
(A decolonial note on the varied invokations of Pepe in the New York Times)

As humans, we are at heart social creatures habituated to live in relatively small groups: for more on this, see for example the work of Robin Dunbar and Nobel laureate Elinor Ostrom. The complexity of some of today's organisational and institutional forms—especially in virtual environs—far outstrip our innate capacity to hold all factors of every eventuality in our minds simultaneously: we need ways to reach agreement, delegate responsibilities, and manage resources to ensure the prosperity of the community. Humans need governance, and in reality cannot escape it: the absence of governance is just another form of (worse) governance (e.g. ad hocracies and Jo Freeman’s tyranny of structurelessness). Governance involves conflict, and dispute, unavoidably so. What's worse is that the tools and mechanisms at our disposal to overcome disagreements and find mutually agreeable paths forwards are also sorely lacking. The ways and means of governance might vary from organization to organization. This is to be expected, as each organization’s mission and priorities will be unique.

How Soon Is DAO? 

The emerging technology paradigm of Web3 heralds no less than a potential re-architecture of the internet itself. Beyond the hype, and the spectacular swings in the economic fortunes of Web3 networks and players, fruits are being borne of several years of organizational experimentation with Decentralized Autonomous Organizations (DAOs). As define:

‘A DAO is a blockchain-based system that enables people to coordinate and govern themselves mediated by a set of self-executing rules deployed on a public blockchain, and whose governance is decentralised (i.e., independent from central control).’
Samer Hassan and Primavera De Filippi, Internet Policy Review, 2020

DAOs are emerging, digitally-native institutions made possible through blockchain technology. Inside DAO communities, governance of shared resources takes place through discussions, decisions, and votes made collectively by members mediated by peer-to-peer software protocols. DAOs can exist to serve any collective purpose pursued by a community. The emerging technology paradigm of Web3 heralds no less than a potential rearchitecture of the internet itself. A new horizon for stakeholder capitalism where the internet is also one of ownership as well as sending and receiving information.

Building Bridges Between Bubbles: Myself and colleagues Laura Lotti and Paul Seidler from Other Internet, Black Swan, terra0, Nascent and the 0x Salon hosting a discussion at the 2022 edition of Krakow’s Unsound Festival on the utopian possibilities and uncomfortable realities of Web3, DAOs and the like.

What is a DAO, exactly? This relatively new term gives a snappy acronym to an otherwise unwieldy moniker: Decentralized Autonomous Organization. Digitally-native institutions, operating within and/or between jurisdictions (depending on design), with a range of stated purposes from benevolent (i.e., charitable / non-profit) fundraising, administration and governance of distributed communities, to asset accumulation and profit-maximisation. DAOs were made possible in the previous decade through advances in blockchain technology, though it is a matter for debate exactly which were the first definitional examples of blockchain-based DAOs.

Some (such as legendary cryptographer Ralph Merkle) even suggest that Bitcoin itself is a DAO. Over the years, there have been a wide range of DAO-type projects running on blockchain networks, dating back as far as 2012. The Bitcoin-like 'masternode coin' Dash had a tranche of block rewards go into a collective treasury which a certain level of network stakeholder would have voting rights on funding proposals. There was a very clear step change when Ethereum launched in 2015, and with 'The DAO' in 2016 a grand experiment took place which set the scene for many, much smaller and more specific initiatives. We'll talk about all those later.

It is uncontroversial to say that the term DAO is used in a rather broader sense in the present day than would have been the case five years ago. Here follows a brief unpacking of each of the three constituent terms in the acronym.

Apocalypse DAO”, taken from the “Fau0x Salon” card deck, 0x Salon, forthcoming.

Decentralized: most likely the slipperiest of the three terms. Firstly, let's be clear that decentralization is a spectrum, and can be judged on a few different benchmarks for logical, economic, and socio-political egality (for more on this, see Bodó, Brekke, and Hoepman, Internet Policy Review, 2021). From a pragmatist's perspective, the distribution of power—explict and/or implicit—inside an organization, and its skew/spread can be taken to function as an enlightening proxy to decentralization itself, the attempted measurement of which has been attempted in the past, whilst others (including myself) consider the metricization of such a complex meta-phenomenon to be a fool's errand or worse, an epistemic fallacy along the lines of Goodhart's Law. One thing to recall is that, contrary to the oft-espoused mantras in the crypto space, more decentralization does not necessarily mean better. There is a sweet spot between one extreme (hierarchy) and the other (peer-to-peer) in which information mixing and communication efficiency meet their peak performances. Many decentralized projects met their downfalls at least in part due to communication inefficiencies. The Price of Anarchy is real, and very costly.

Dissentralisation”, taken from the “Fau0x Salon” card deck, 0x Salon, forthcoming.

Autonomous: originally this word was invoked in a strict, cybernetic systems sense. As time passed and DAO experiments in the wild proliferated, it became increasingly apparent that though there is certainly potential for automation, truly autonomous operation of DAOs remains a distant dream. There are many reasons for this, not least that the very purpose, constituency of governance, and presumably greater mission of the would-be-DAO-proto-institution would also have human-oriented goals. This also means there is a lot of hidden, and thankless labour going on to keep wheels of government grinding along over time. Our all-too-human reality of being thralls to our own latent desires rather than objective and rational arbiters of our decisions and the ability of particular stakeholder-actors to harness and shape mob sentiment may eventually lead to unwise decisions, reactionary movements, protests, and threats of secession. The pragmatic path appears to be processual logics that are automated, and autonomous with respect to 'the outside', operating alongside a system of checks and balances by humans (with individual and collective responsibilities) to avoid ‘runaway’ systems.

A Computer Can Be Management: meme of unknown origin, based on an IBM presentation slide from 1979.

Organization: here, we are taking the word organization in its broadest sense. An entity which organises. In the case of most modern DAOs, this is achieved using blockchain logics to enact nascent institutions on distributed network infrastructure, owned and controlled by no-one, accountable to all participants. DAOs are holonic entities, fractal organisations, or ‘1-org-noun-phrases’: a thing made up of smaller things.

No Gods, No Master(Node)s: Decentralisation, Delegation & Dissent on the Timechain: Wassim Z. Alsindi guest lecture at the New Centre for Research and Practice for the Demons and Discord: Anatomy of a DAO course, 2022

Code Is Law? You mean Coders' Flaws?

The theme connecting the examples contained in this article is a logical successor to the topics we discussed around Bitcoin (un)governance—the idea that there should be as little direct steering as possible—and the challenges that can pose. In the 2017-2020 vintage of crypto-networks, the idea of direct and active governance became more palatable, with both off-chain and on-chain flavors heavily experimented with. In this sense, the borderland between these two architectures for imagination-states became the sanctity of rules and/or norms that were explicitly enshrined. Indeed, even in blockchain networks the fine-grain delineation between rules and norms can be challenging and often a question of scale. We discussed protocol ossification in the previous column with respect to Bitcoin, and that is a closely-related concept to the topic currently at hand, which came to be known in the blockchain space as 'code is law'. 

Code Is Lore”, taken from the “Fau0x Salon” card deck, 0x Salon, forthcoming.

Originally spoken of in the 1990s separately by Bill Mitchell and Larry Lessig, code-as-law appears to have fairly benign conceptual origins in the early days of the world wide web. That there could be a type of self-regulation where private actors (institutions, companies, individuals etc) could embed their values and customs into the technological substrates and artifacts that they use.

What seemed like a noble and benign libertarian ideal of using technology to create jurisdictions of choice, when combined with blockchains that never forget a thing gives us a new form of long-lasting mnemotechnics. As a result, code-being-law means not just some text files in a Git repository, but rather a technoeconomic substrate which can execute and enact the wishes of a piece of code both within and without (via proxies) the network itself, now and into the future. In so doing, code-as-law becomes something we are subjected to unwillingly, unwittingly, and unconsensually, from the moment of execution/deployment until the end of time/the network. These may or may not be the same time, depending on your preferred network eschatology. This is a good moment to stress the importance of including the various stakeholder constituents’ voices in the process of making decisions which will affect them.

It is very much as AR Galloway portrayed in their landmark pre-Bitcoin book Protocol: How Control Remains After Decentralization, very often the ways and means of effecting a particular goal can still be afforded to a group of constituents participating in a notionally decentralized network.

With this kept firmly in our minds, let's now look at a couple of governance tales which contain insights into the fuzzy line between immutability and ossification, and agency versus accountability.

No Gods, No Master(node)s: Dash & The Social Sybil Attack, 201?-20??

‘Dash’ is a hybrid proof-of-work / proof-of-stake 'coin' network, very similar to Bitcoin. Launched as ‘XCoin’ in early 2014 and then renamed to ‘DarkCoin’ shortly thereafter, it again rebranded to Dash and positioned itself as somewhat of a PayPal-rival for retail payments and remittances. Incredibly, Wired Magazine wrote about the Darkcoin network in 2014, not long after it launched.

One of the key differentiations that Dash made versus Bitcoin, was with the concept of ‘masternodes’. In a pure peer-to-peer blockchain network such as Bitoin, all the nodes are essentially the same: the only material difference is that some nodes mine and others do not. In Dash, the ranking of masternode elevated some network stakeholders above others. In return for ‘staking’ i.e. locking up a large amount of collateral—1000 DASH at one point was worth hundreds of thousands of US Dollars—and performing some duties on behalf of the network—in Dash's case, the mixing of coins in a naive attempt at facilitating forward privacy of transactions—a network participant could then benefit from network rewards and also get a vote in the ‘Dash DAO’, which was intended to be some kind of quasi-delegated democracy. A 10% tithe of block rewards would go into a collective treasury, for which masternode holders would vote on proposals, and the treasury would be disbursed. Sounds unproblematic so far…

Sibyl by Michelangelo, a fresco in the Sistine Chapel, Public Domain, via WikiMedia

Well, as with all early cryptocurrencies, including Bitcoin, there were questions lingering over the direct—tokens held—and indirect—soft power and influence—wielded by the founding community (i.e. 'insiders'). In Dash's case, these were compounded by what would be commonly referred to as an 'instamine': whereby the network's mining difficulty at the birth of the network was so low, and sufficient caps on the quantities of coins issues were not in place, such that nodes engaging in proof-of-work were massively rewarded. See this Bitcointalk forum thread for an extensive and heated discussion at the time. In many cases in the past, networks have ‘started over’ when there has been a bug or glitch in the launching of the network, as those parameters—and/or their economic and socio-political implications—would reverberate throughout the network for the entirety of its history. Recall, that blockchains, like the aphoristic elephant, never forgets. In the zero-sum arena of the timechain, history is always written by the winners.

With those large quantities of easily-gotten Dashcoins (née Darkcoins), came a large amount of masternodes and a huge amount of voting sway in the DashDAO. Can you see where this is going, fellow computational law aficionados? With a toxic melange brewing of anaemic governance participation rates—under 10% of eligible participants is the norm in most DAO voter turnouts—a powerful cabal of well-heeled and aligned interests, and a lack of safeguards a recipe for governance disaster was quietly bubbling away in Dashland for many years. 

Let's engage in some digital archaeology for a moment. The only reason I know of this situation at all, is due to a chance occurrence many years later. I was not there at the time, never held Dashcoins, or participated in community discourse. I was at the Building On Bitcoin conference in Lisbon, Portugal in 2018 and whilst undertaking a Hackathon project on designing Bitcoin wallets for migrants and refugees (see a related article series I wrote for In The Mesh in 2018/9 here), I got talking to a Dash core developer during a coffee break. When I mentioned I was studying the governance of smaller networks, he immediately and painstakingly told me of a several-year saga whilst presumably looking for solutions. It seemed he had given up on attempting to exercise his ‘voice’, which would imply that ‘exit’ was the most likely pathway. I often wonder what became of him, as we didn’t stay in touch.

Voice, Exit, and Loyalty. Meme of unknown origin.

What was happening—in a nutshell—was that though the quality of funding proposals being submitted to the DashDAO were generally of a decent standard, there began to be a widening dissonance between the overall quality level, and the proposals which would be successful in being funded. Because Dash was a bit 'slimy', almost everything was about marketing. Back in those days, well before crypto’s ‘Eternal September’ the primary theme was on basic education regarding the technology with a view to onboarding new users, with a strong focus on framing Dash as a payments technology. There were even songs funded by the DashDAO.

"Dash Digital Cash" - African song

What transpired was that hugely overpriced, YouTube-content type proposals of low quality were getting voted through, and better-quality proposals with modest financial asks were being left behind. It became apparent that this was a coordinated action, between the proposal-makers and the proposal-voters. Thusly, the frog slowly boiled in the waters of delegated governance cartelization. Sure enough, something similar happened in almost every node-delegation governance system—chiefly employing Delegated Proof-of-Stack aka DPoS—with major networks such as EOS suffering rampant cartelization that some might say looked to be hardcoded by design from the outset.

Snarky EOS tweets from my old Twitter account, 2018

Here are some excerpts from the summary of an unfinished book on ‘insider asymmetries in P2P networks’ that I was working on in 2018, which I now realize has laid the foundations for this article series:

The focus of this work is to relate the asymmetric advantages enjoyed by ‘insiders’ observed throughout human society—encapsulated most widely as the principal-agent problem in organisational theory—with those being observed in tokenised peer-to-peer networks. This project brings the gravity of the varying governance issues being experienced in all open cryptocurrency and blockchain-architected networks to the forefront and will encourage public debate on the matter. There is no formal research in the field to date that has uncovered the novel “social attack vectors” that are being explored in this work. This information is of sufficient magnitude and urgency that lead developers on major cryptocurrency projects have come forwards citing instances of chronic governance failures through informal channels and calling for public debate. Decentralised Autonomous Organisations (DAOs) are proposed as potential mechanisms by which inherent asymmetries in P2P networks may be mitigated.

In every resource ecosystem—commoditised or otherwise—there exists the potential for imbalances, unfairness and asymmetry of information, capital and influence. Much work has been done in the realm of legacy finance and economics to model, predict, parameterise and rationalise the contributing factors and implications of such heterogeneities. Within the emerging analysis of open P2P cryptocurrency networks, the nature of trust-minimised distributed digital ledgers employing blockchain-type architectures allows for objective analysis of network traffic, token distribution and observation of explicit power structures within the network. Stakeholder constituents within these networks such as miners/producers, developers and node operators are effectively imbued with the authority to partake in network activities such as coin mixing, network software management, transaction routing, validation or block creation. Further there may exist a series of shadow power structures, facilitating control of aspects of a cryptocurrency network by a cabal of powerful insiders who may exercise a disproportionately large amount of influence over the path that the network in question may face through the media of in-protocol or extra-protocol governance mechanisms. This work explores amongst other phenomena, the emergence of a “Social Sybil” asymmetric governance vector whereby striated cadres of network insiders (developers, marketeers, miners) gradually consolidate effective power and influence by arbitraging or gaming the existing protocol governance mechanisms using intimate knowledge of their function.

Blockchains constitute distributed data structures which are typically sequenced temporally for the purposes of record-keeping with increased transparency, verification, finality, auditability and tamper-evidence with respect to hierarchical databases more commonly encountered. As such, shadow power structures in a blockchain-architected cryptocurrency must behave in a more clandestine manner in order to effect influence without making their activities and techniques evident. Such an imbalance in the stakeholder power structures may be concealed through the surreptitious exploitation of insider information asymmetry and may act as a tool of subterfuge constituting decentralisation theatre should attempts be made to obfuscate the inequality in network influence, control and concentration in order to maintain a pretence of valuable characteristics such as censorship-resistance, unconfiscatability, immutability or tamper-evidence. Initial investigations in this early-stage project has uncovered incontrovertible evidence of power structures in cryptocurrency networks corresponding to historical analogues of personality cults, technocracies, striated structures similar to India’s caste system, de facto cartels and effective dictatorships.

Snarky EOS tweets from my old Twitter account, 2018

A Slight Case of Oversteering: ‘The DAO’, 2016

Nothing comes to mind more evocatively when code is law is being discussed than the events surrounding the early Ethereum project 'The DAO'. Not long after the Ethereum 'Frontier' mainnet launched, a project began taking shape which would push many of the DAO / DAC (Decentralized Autonomous Corporation) ideas then being passed around the crypto space into a realm of active and practical experimentation and realization. So much ink has been spilled on The DAO (see below for a choice digest) including no shortage by myself—principally in my 2017-20 Forkonomy, TokenSpace, and Reaching Everyone works—so let's instead parse out some salient points.

In the midst of the chaos around the exploiter draining funds from The DAO—as was warned about prior to launch by Mark, Zamfir, and Sirer—the community was left with a choice on how to move forwards, as there was no formal governance process defined at this stage of the Ethereum network. Led by the Ethereum Foundation and some other well-known community members, there was a decision to hold an 'indicative' token-weighted carbonvote—which would translate to 1 ETH = 1 vote—as to whether there should be some kind of redistributive redress or not. In other words, “code is not law”, or “code is law”. In the end, the code-is-not-law side won by quite some margin, though it was noted that voter turnout was very low and some single voting wallets (likely key founders, institutions, or ‘whales’ holding large quantities of tokens from the presale) were throwing their weight very heavily on one side of the scale. Regardless, a somewhat-Pareto proportioned outcome gave the community ringleaders the ostensible mandate to turn their indicative referendum into something binding. That this happened in 2016, the same year as the ‘also-indicative’ Brexit referendum, seems like quite the coincidence.

From Notes On Blockchain Governance by Vitalik Buterin, 2017.

When the time came to delete the exploiter balances through an ‘irregular state transition’, a subset of the network constituents did not ‘upgrade’ their software clients to 'update' the network and instead continued on the prior timechain trajectory. This had the effect of two incompatible networks being created from the one that existed before. Ethereum Classic (ETC) was the code-is-law continuation of the DAOsaster timeline, whereas Ethereum (ETH) was the branch which in essence deleted the attacker’s funds.

I don't want to go into too much detail on ETC, but it just so happens that being a fork researcher in 2017-9 meant that I spoke at related events and participated in their (very small) community governance processes. Watch the lecture I gave in South Korea below. ETC ended up being the place for people that wanted Ethereum's technical affordances, with Bitcoin's conservative values. A very interesting experiment, but likely one that will not supplant its usurper. Code is law means that the bad actors kept their spoils and the Damocles' Sword of those funds being dumped on the open market looms large over the network perpetually, then as now. 

Ethereum Classic Summit 2018, in Seoul, South Korea. My lecture Forkonomy, Blockchains & Time Travel: Possible Futures for ETC

Perhaps instead of code-as-law, we can think in terms of Algorithms-as-Policy? That blockchains could adopt mutable, machine-readable, updateable, revokable constitution-like governance frameworks. Indeed, the work of scholars such as Eric Alston, Michael Zargham, and Kelsie Nabben gesture in this direction. Code as gesture, code as narrative. Suggestive rather than declarative. The alternative to this another iteration of the Bitcoin style un/non-governance seen in Ethereum Classic. Coincidentally, I wrote about the implicit governance processes in ETC in 2019 in “The Ungoverned Blockchain?”. I should also add, that my views have changed considerably in the intervening years in terms of whether it is desirable, or even possible for code-to-be-law. Some excerpts follow:

A striking example of this was the divergence of the Ethereum developer and leadership cadre (ETH) from the canonical account-oriented Ethereum blockchain (ETC) due to the exploitation of a flawed smart contract project resembling a quasi-securitised decentralised investment fund known as The DAO (Decentralised Autonomous Organisation). In this case the Ethereum insiders decided to sacrifice immutability and by extension censorship-resistance in order to conduct an effective bailout of DAO participants which came to exercise Too-Big-To-Fail influence over the overall Ethereum network, insider asset holdings, token supply and mindshare. A social media consultation process in conjunction with on-chain voting was employed to arrive at this conclusion though both methods are known to be flawed and gameable. During the irregular state transition process akin to a rollback, a co-ordinated effort between miners, exchanges and developers took place on private channels, exposing the degree of centralisation inherent in the power structures of constituent network participants.

Although a big theme of this work has been looking at the vulnerabilities of minority PoW chains to attack and defensive strategies — and also that this work was presented at the ETC Summit in autumn 2018 — it was a surprise to see Ethereum Classic itself fall prey to these attacks as well. It remains to be seen what path ETC will take in order to mitigate attacks, the usual gamut of options are being discussed by stakeholders in a rational way — I was present for the post-mortem call and reiterated my opinion that changing mining algorithm in a knee-jerk response is probably sub-optimal to penalising attackers withholding blocks. It appears that the continued delays of ETH’s attempted transition to a sharded, proof-of-stake network — thereby bequeathing the Ethash majority to ETC or another as-yet-unborn timeline — has exacerbated the issue alongside the protracted bear market and abundance of marshallable hashrate.

In terms of social layer network politics, both ETH and ETC have had issues of differing types. ETH’s diverse stakeholders are pulling in different directions regarding key technological design choices such as state rent and allegations of insider asymmetry / opacity at crucial meetings. ETC may be suffering from a “tragedy of the commons” scenario as hitherto leading core development company ETCDEV shut its doors due to a funding crunch, with accompanied suspicions of power struggles for prized network resources such as the Github repositories and experienced core developers.

Genesis Alchemy DAO, 2018/9

The final example in this edition's cautionary tale is for all those moments in our lives when we think one thing is going on, then all of a sudden the vibe shifts, another set of pieces fall into place for context and we see everything differently from then on. An epistemic rug-pull, if you will.

Let's set the scene: it's the brutal post-bubble-burst bear market of 2018 and 2019. Everything is withering on the vine. Projects which had good funding runways saw them decimated by the price of ETH falling over 90% in USD terms, myriad project leaders went AWOL, and there was little hope to be found around. Without too much fanfare, some very interesting DAO experiments were taking place under the aegis of Colony, DAOStack, and Aragon to name a few of the more prominent groups active at that time. As an independent, cross-network researcher I was invited to participate in DAOStack's "Genesis DAO", operated on their Alchemy platform. Things seemed pretty fine there: proposal-based governance, use your vote stake to up or down vote things Reddit-style, anyone can make proposals. However—as is so often the case with blockchain governance processes in practise—the process of writing, seeking community feedback, refining, and vote-winning was rather cumbersome.

It so happens that some people I knew were involved in setting up and getting funding from the DAO for some fairly modest monthly salaries to act as an "Accountability Task Force" (yes, the ATF…those were simpler times.) Their role collectively was to conceive, workshop, research, develop, and attempt to mitigate potential attacks on the proto-DAO, such as those seen in the above cases of Dash and Ethereum with funds and/or governance 'oversteering'. Their proposals were to be submitted on a monthly basis to the DAO, and covered a reasonable salary for a small group of junior researchers to pay their living costs (rent, energy, food etc). However, the treasury of the DAO was denominated in ETH, and as the price of ETH continued to fall (from a high of around $2000 to a low of under $100) the amount of ETH tokens being asked each month for started to represent progressively larger portions of the overall treasury. It came to pass, that in some quarters of the Genesis community, the perception of the ATF inverted, as some DAO members began to ask questions like "is this an attack, to drain our treasury? How would we be able to tell for sure?".

Lessons learned, looking forwards with one eye on the past

There are a few cautionary tales to take away from these experiments in decentralized governance. One is that governance is inherently subjective. There is no right or wrong, on the timechain or anywhere else. That which might be perceived as defense in the summer, could be construed as an attack in winter. Another is that desire’s imbrication into speculative capitalism continue to short-circuit humans’ libidinal economies. Scarcity is a hell of a drug. One last thing to think about is the inevitable tensions between the pattern mis-match between ‘centralized’ teams and ‘decentralized’ communities, the explicit and implicit hierarchies borne out of human organisation through the ages, the power of insider asymmetries—reputation & social capital, the fuzziness of accountability, technical familiarity—and how easily they are manipulated by those with intimate knowledge of their function.

Prophet Motives: Tallowed Be $THY Name. Tainted glass on perspex, made with Craiyon and Stable Diffusion, 2022

As a way to avoid concluding the inconcludable, here’s an excerpt from my forthcoming ‘Prophet Motives’ essay, building on a recent 0x Salon discussion topic:

For as long as there has been financial capital, risk and speculation have orbited, manipulated and harvested it. As narrative feedback machines, simultaneously reading and rewriting realities, markets exist as a distributed conversation amongst speculators driven by profit motives and an appetite for divination and prophecy. As such, econo-temporal cycles oscillating between irrational exuberance and abject depression as markets boom and bust constitute a universal feature of the zero-sum game of trading: be it in shares, derivatives, or cryptocurrency, nothing is stable or certain. Despite the ostensible ‘neutrality’ afforded by technology advances, recognisable human characteristics and archetypes appear again and again. The messianic cult leader, the charlatan, the snake-oil salesman, the pseudo-gnostic teacher, the bad faith detractor, are identifiable at every point of economic history, hiding their agendas and incentives from the naive token-holding utopian believers, and the sometimes well-meaning Rube Goldberg machine operators.

That's all for now, and in the next instalment of this series we will return yet closer to the present and relive some highlights from the 2020-2022 Cambrian explosion of DAOs, as they truly began to make impacts in the wider world (for better or worse). Signing off with a few recommended materials & recent goings-on for your perusal. Tweet me @wassimalsindi if you want to discuss any of the above!

Thanks to Lívia Deschermeyer, Tara Merk, Çem Dagdelen, Laura Lotti, and Kelsie Nabben for helpful comments during the preparation of this article.

Editors Picks

A Prehistory of DAOs - Kei Kreutler

A Call for a Temporary Moratorium on The DAO - Dino Mark, Vlad Zamfir, and Emin Gün Sirer

Decentralisation: a multidisciplinary perspective - Balázs Bodó, Jaya Klara Brekke, Jaap-Henk Hoepman

DAOs, Democracy and Governance - Ralph C. Merkle

The Tyranny of Structurelessness - Jo Freeman

Is a "Decentralized Autonomous Organization" a Panopticon?: Algorithmic governance as creating and mitigating vulnerabilities in DAOs - Kelsie Nabben

Necroprimitivism Rising, Wassim Z. Alsindi

Algorithms as Policy: How can algorithm design be reconceptualized as policy-making to create safer digital infrastructures? - Michael Zargham and Kelsie Nabben

Against on-chain governance, Vlad Zamfir

Cryptoeconomics as a Limitation on Governance - Nathan Schneider

On-Chain Vote Buying and the Rise of Dark DAOs - Philip Daian, Tyler Kell, Ian Miers, and Ari Juels

Prophet Motives - 0x Salon

Disambiguating Autonomy - Michael Zargham

Blockchain solutions for agency problems in corporate governance - Wulf Kaal

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