Leadership, Decentralization, and the Soul of Governance
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June 24th, 2022

Thoughts on Soulbound Governance in Decentralized Autonomous Organizations

(Note: the following article reflects my own personal thoughts and stands in no official association with Teh Golden One. )

I found out about Teh Golden One on the same day the token launched on ETH. I was intrigued by the mysterious tone of communication and the clues that were given. Even though the clues pointed to a possible connection to well-known participants in the cryptosphere, they were not the main reason for my fascination. I wasn't merely fascinated by Teh Golden One because Ryoshi might have something to do with it or there might be some connection to SHIB. No, I was fascinated because I could feel the same SPIRIT that fueled many of the experiments in decentralization in this very project. Something in me said "this is the real deal" - and I listened.

Many players in the experiment of decentralization have purposefully chosen to remain anonymous and to not draw any attention to their personal identity. Ryoshi even went as far as stating that anyone who would meet him would likely be quite unimpressed. The point was never to glorify the inceptors of these ideas, but to embrace the ideas themselves, run with them, and actually use them to create a brighter world - each participant from a point of individual responsibility.

Responsibility, however, is a curious subject for human beings at this stage of evolution. On one hand, we want the power, the keys to the kingdom, the right to exercise full control. On the other hand, we give all of our power away and project it onto whoever fits the bill in the moment it suits our agenda. Interestingly enough, one of Ryoshi's medium articles referred to this as 'pre-womb entitlement issues'.

Having difficulty with generating a society which is genuinely based on fully responsible participants, human beings have thus come up with all kinds of distorted implementations of governance. And these distortions have now weaseled their way into how decentralized mechanisms of governance are (mis)perceived.

A common misperception of the principles of decentralization in governance is the following:

In a decentralized governance structure, everyone should have identical rights and the idea that some 'special' rights could be earned is utterly against the principle of decentralization.

This is the same as pretending that all 300 people on board a 747 are equally qualified to fly the plane, when only two (perhaps a few more among the passengers at most) are qualified to do so.

The flat out refusal to acknowledge peers in specific positions of functional authority which require qualification or merit and insisting on freely transferrable governance rights is a foolish psychological tendency which appears to be on the rise. And when it comes to decentralized organizations, it can lead to exploitable systems quite easily.

As ETH founder Vitalik Buterin states in his article "Soulbound"(https://vitalik.ca/general/2022/01/26/soulbound.html):

"If the goal is for governance power to be widely distributed, then transferability is counterproductive as concentrated interests are more likely to buy the governance rights up from everyone else.

If the goal is for governance power to go to the competent, then transferability is counterproductive because nothing stops the governance rights from being bought up by the determined but incompetent."

Enter Soulbound Governance Rights

Soulbound governance describes certain governance rights only being available to holders of a nontranferrable (soulbound) governance token which cannot be purchased, but must be earned. Within the ecosystem of Teh Golden DAO, this token will be VALAR.

While all GOLD 1 holders have the power to vote on proposals, VALAR holders will be the only participants in the DAO which can create these proposals on-chain.

There might be some who (incorrectly, in my opinion) interpret a structure which employs soulbound governance rights as a hierarchical power structure. A structure in which teh people are given an illusion of power while a select group pulls all the strings in reality. It may seem contradictory at first, but this is precisely what soulbound governance principles are NOT about.

Perhaps our society has experienced so much abuse of leadership that everyone has become inherently cynical about governing circles of any kind. I don't blame anyone for that - it is no different for me.

The only issue is that, we often tend to counter this by abstracting human relationship in the decentralized realm to a point where "everyone is the same" and merit becomes irrelevant.

The very principle of a soulbound architecture, however, is precisely the kind of merit-based involvement and accountability that DO serve a positive outcome for EVERYONE involved.

It is foolish and naive to presume that all are equal in function, capacity, and intention within a unified structure. Unity does NOT equal sameness. Furthermore, sameness is NOT a prerequisite for harmony and positive outcome for all.

The implementation of soulbound governance rights is simply based on the acknowledgement of these principles and the wish to design more suitable systems of governance accordingly.

To come back to the (perhaps a bit silly) example of the 747, would you want just anyone to be able to acquire the piloting rights? Or would you want the piloting rights to go to an individual that is qualified? When it comes to the governance of commercial aviation, would you want a pilot license to be transferable freely, so that a pilot who earned the license could simply sell it to anyone (regardless of qualification), if the price is right? Most likely not.

Many people seem to confuse unity/equality with sameness, and therefore confuse decentralization with homogenization.

I would make the following case, however:

DECENTRALIZATION ≠ HOMOGENIZATION

A Practical Example of Potential Exploit

Why It Could Be Detrimental for GOLD 1 Holders to Submit On-Chain Proposals Which Influence Soulbound Governance Structure

Let's say all GOLD 1 (Teh Golden One's base token) holders can freely submit on-chain proposals for the addition or removal of VALAR holders (VALAR is The Golden One's Soulbound Governance Token). This works well enough, as long as ABSOLUTELY EVERYONE shares the same ethical standard and commitment to the project. But let's presume that one participating party (an individual or a group of participants), who happens to have access to significant resources, has different intentions.

This party will begin by setting up a whole armada of GOLD 1 holding wallets, as well as many different personas in our communication channels - thus getting everything ready to influence Teh Golden One's governance on a mass scale. This party will appear as a whole bunch of ordinary participants in the DAO, people like you and I. Gradually, they will vote out existing VALAR holders, and vote in more of their own "virtual participants". Over a relatively short amount of time, control over the entire DAO could effectively be in the hands of one single party, and the DAO's users - YOU - would be at their mercy. The consequences of this would be devastating.

A Personal Note on the Community of VALAR Holders

Most, if not all of the individuals who will hold VALAR at the release of the DAO have walked through fire for Teh Golden One on more than one occasion. They have shown - in relationship to one another and to the community - that they are genuinely passionate about Teh Golden One's success - for reasons beyond their mere personal gain.

A genuine degree of involvement and interest in the success of a project cannot be simply be measured by holding its base token. It can only be discovered in relationship to the community.

I am truly excited to see what the future holds in store for Teh Golden DAO and look forward to exploring and refining this cutting-edge form of decentralized governance together.

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