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Decentralized Blockchain Governance

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Peeling the layers of Decentralized Governance in the Era of the Blockchain. Presentation at the Blockstack Decentralizing the World Event in Hong Kong, Jan 10 2018.

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Decentralized Blockchain Governance

  1. 1. Peeling the Layers of Decentralized Governance William Mougayar Investor, Advisor, Board Member Author, The Business Blockchain Founder, The Token Summit and WMX @wmougayar wmougayar@gmail.com January 10 2019
  2. 2. Disclosures and Market Activities • Book (10 languages) • Token Summit • Blogging • WMX Blockchain Index • Strategic Advisory • Boards & Foundations • Startups Investments • ICOs participation & Advisory • Regulatory interactions
  3. 3. Decentralization is the blockchain’s raison d’être. © 2018 William Mougayar @wmougayar
  4. 4. The stone age didn’t end for a lack of stones. © 2018 William Mougayar @wmougayar
  5. 5. Nothing wrong with Central Systems, as long as they are NOT: © 2018 William Mougayar @wmougayar 1. Unfair 2. Corrupt 3. Untrustworthy 4. Evil 5. Abusive 6. Inefficient 7. Expensive 8. Useless Reality: Few centrally-run organizations don’t have these flaws!
  6. 6. The Incentives to Move to Decentralization Must Be Strong. © 2018 William Mougayar @wmougayar ➔ Loss vs. Gain Risk Appetite
  7. 7. Decentralization is an unusual beast. © 2018 William Mougayar @wmougayar
  8. 8. Decentralization On-Chain 0% 100% 100% IDEAL ? ? © 2018 William Mougayar @wmougayar Reality
  9. 9. Decentralization Projects Are Communities. © 2018 William Mougayar @wmougayar
  10. 10. Communities Toolbox © 2018 William Mougayar @wmougayar ✓ Strong mission ✓ Free entry ✓ Transparency ✓ Free contributors ✓ Full re-mixability ✓ Strong protocols ✓ Fair authority ✓ Non-tribalism ✓ Self-organization ✓ Tolerance ✓ Measurable success ✓ High scoring ✓ Decentralization ✓ Free workspace ✓ Smooth learning ✓ Regular structure ✓ Positivity ✓ Sense of humor ✓ Minimalism ✓ Sane funding Source: Social Architecture by Pieter Hintjens
  11. 11. © 2018 William Mougayar @wmougayar BLOCKCHAIN Technical Business Legal Social • Implementation • Motivation Simultaneous Impact is Necessary
  12. 12. Decentralization is a Defense Mechanism. © 2018 William Mougayar @wmougayar
  13. 13. © 2018 William Mougayar @wmougayar Blockchains P2P Networks Protocols Dapps, Apps & Platforms Socio-Political Change Lots here Blockchain-Based Governance Segments Key Drivers: • Financial Efficiencies • Rewiring the Web • Fixing Unfair Societies
  14. 14. Different Priorities … Different Governance © 2018 William Mougayar @wmougayar Blockchains P2P Networks Protocols Dapps/Apps/Platforms Socio-Political Change Sybil attacks, Consensus process. Installation, Self-incentivization, Economics. Adoption, Ecosystem, Value. Network Effects, Development, Support. Inclusiveness, Fairness, Wealth Distribution. Segment Key Considerations
  15. 15. Diverse Governance Stakeholders © 2018 William Mougayar @wmougayar • End-users • Developers Users • Core • Community Developers • Token holders • Equity owners Investors • Active • Passive Regulators • Miners • Stakers Nodes • Foundations • Founders Organizations • Internal • External Influencers
  16. 16. © 2018 William Mougayar @wmougayar Blockchains P2P Networks Protocols Dapps/Apps Platforms Socio-Political Orders Users Developers Investors Nodes Organizations Influencers Regulators Mapping Segments to Stakeholders
  17. 17. Some Experimentations in Decentralized Governance © 2018 William Mougayar @wmougayar ❑ Liquid Democracy ❑ Quadratic Voting ❑ Futarchy ❑ Token Curated Registries ❑ Foundations ❑ Councils ❑ Associations
  18. 18. © 2018 William Mougayar @wmougayar ➢ Token Curated Registry ➢ Community Veto ➢ Liquid Democracy ➢ Cryptoeconomic Modeling ➢ Off-chain Voting ➢ Cross-blockchain Governance
  19. 19. © 2018 William Mougayar @wmougayar ➢Board ➢Community Governance Panel ➢Helios Voting (private, verifiable)
  20. 20. © 2018 William Mougayar @wmougayar ➢ Smart contracts for on-chain governance ➢ Aragon Governance Proposal process: ➢ Community proposals ➢ Aragon Association reviews ➢ Token vote ➢ Digital jurisdiction
  21. 21. © 2018 William Mougayar @wmougayar ➢ Melonport AG handover to Melon Council (Swiss Verein non-profit association) ➢ Melon Council to oversee protocol evolution ➢ Melon Technical Council appointed by MAG (MTC) ➢ Developers apply for funding via Melon Improvement Proposals (MIP) ➢Melon Exposed Business (MEB)
  22. 22. © 2018 William Mougayar @wmougayar ➢ Blockstack PBC decentralizing itself ➢ App Mining payouts based on decentralized rankings ➢ Non-profit Foundation ➢ Independent regional entities ➢ Signature Fund ➢ Milestone-based fund unlocking ➢ Advisory Board for Token Fund
  23. 23. © 2018 William Mougayar @wmougayar Are We Decentralized Yet?
  24. 24. © 2018 William Mougayar @wmougayar Decentralization Appliance
  25. 25. Dilemma: We are still defining Decentralization © 2018 William Mougayar @wmougayar In Blockchains: ❑ How transactions are validated (double spend problem) ❑ How attacks are mitigated or eliminated (security) ❑ How rules/protocols change (evolution)
  26. 26. Use Governance as a Tool, not a Weapon. © 2018 William Mougayar @wmougayar
  27. 27. Governance vs. Governing (not the same) © 2018 William Mougayar @wmougayar
  28. 28. 12 Issues and Challenges © 2018 William Mougayar @wmougayar ❖ Token isn’t always needed ❖ In decentralization, economic incentives matter ❖ It is not just about voting ❖ Decision-making by consensus is not ideal ❖ Communities alone shouldn’t govern ❖ Beware of premature decentralization of governance ❖ When will Code = Governance? ❖ Transparency / Openness in Self-governance ❖ One size doesn’t fit all ❖ Large gap in governance UI’s (still very technical) ❖ Legal and moral aspects of unstoppable P2P networks ❖ Obsession with self-governance (DAO was not a standard)
  29. 29. “In decentralized systems, problems can be solved early and when they are small.” -- Nassim Taleb © 2018 William Mougayar @wmougayar Let’s remember…
  30. 30. © 2018 William Mougayar @wmougayar Computation Protocols Data Content Storage Work Rewards EarningSpending Sharing Industry Trade Law Finance Nations Big Picture: The Blockchain Economy
  31. 31. Can the blockchain lead us to a new world that is better than the current one? © 2018 William Mougayar @wmougayar
  32. 32. THANK YOU William Mougayar Investor, Advisor, Board Member Author, The Business Blockchain Founder, The Token Summit and WMX @wmougayar wmougayar@gmail.com http://startupmanagement.org/blog

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