It’s been over 100 days since joining Gitcoin and these are some of my initial observations and open questions.
Gitcoin has been through cycles - and with each of those revolutions, crystallized our north star: incentivizing coordination around public goods. Before I joined, I regret to admit that I had little awareness of how critical the public goods powering my digital life are; it’s not like the dial-up days where digital interaction was rife with inconvenience that reminded me how lucky I was.
Today the world is networked, albeit unevenly and unfairly. Citizens of the Global North now enjoy 5G speeds in our pockets. VC dollars subsidize grocery delivery on demand to doorsteps within minutes.
@pmarca’s adage from shortly after blockchains came online that “software is eating the world” has since taken on a whole new meaning for me - as @owocki notes, digital public goods could likewise soon power all public goods, if we can just coordinate our talent and capital toward that north star.
Before I joined, I had a gut feeling that bottoms-up organizing around public goods is among the most promising use cases for decentralized digital coordination infrastructures like DAOs; now my conviction is overwhelming.
One leading indicator for me has been the Cambrian explosion of creativity I see in GitcoinDAO, and in others. Moonshot Collective’s Coordination.Party Kit re-thinks and re-wires the ease with which DAO contributors are recruited, recognized, rewarded and retained. The Fraud Detection & Defense workstream roadmaps precise plans to counteract sock-puppet attacks with input from data scientists, data engineers, developers and many other contributors; nevermind that Sybil attacks remain an age-old difficult unsolved problem in crypto - the community persists undeterred. Backers elegantly conjure up aqueducts to ferry liquidity to open source projects. Community collaborative creation events nail down our north star and leverage Quadratic Diplomacy to reward high quality creators. Credit to @elonmusk for the adage (“whoever controls the memes, controls the universe”) but storytelling is fundamentally human, and an engine for empathizing and growing the pie beyond ourselves, for the greater good. It’s our way of sense-making the world, and dreaming up the future - only it’s extra-powerful when an entire community takes part. And that power lies in unleashing the creativity of diverse individuals, who are in this unique moment in computing history able to avail themselves of a tech stack and composable lego tools that are more censorship-resistant than ever before. Now we can bring the stories we’ve quietly told ourselves into focus and actually realize them: There is so much here, here!
OK, creativity is nice, but to what end, amiright? There’s real traction here - over $50m(!) allocated to public goods so far! And the means of achieving it are organized - GitcoinDAO workstreams have clear goals and OKRs, a legacy of earlier seasons. The projects powered by Gitcoin Grants this last round broke prior records in both amounts and number of contributions in any single day - I donated to 14 grants and the toughest part was choosing from among thousands of amazing projects! Nota bene that curation is a real challenge and opportunity in Gitcoin Grants as much as it is in crypto and well, the internet, more generally, and Gitcoin is mindful of the same. **
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The sheer breadth and diversity of mechanisms coordinating talent and capital that I’m privileged to witness seem like signal to me. I’m just not sure a complementary Cambrian explosion of association or organizational rails has arrived or is even on the horizon - I mean, legal rails for organizing don’t line up neatly with DAOs as they exist today, and are slow to evolve; @awrigh01 recounts the history of recognized business associations well in a recent paper:
“During the Middle Ages, Italians pioneered early versions of a limited partnership to finance maritime trade. The Age of Exploration, during the 1600s, brought to life joint stock companies in England and the Netherlands, as Europe began to look beyond its borders and operate on a more global basis. The Industrial Era in the United States was powered, in part, by the modern corporation, starting in 1811 when New York granted private parties the ability to form their own corporate structures without an extensive approval process. In more recent times, the turbulent energy markets of the late 1970s brought to life the limited liability company, enabling parties to explore international oil and gas opportunities when major domestic producers struggled with problems related to Middle Eastern oil supply.”
This gradual narrowing of legal liability was driven by capital providers. Beginning in the 1950s, labor capital began to organize and rise in power and influence, innovating with the advent of tools like the ESOP in 1974. Today, web3 participants can supercharge yet more inclusive and coordinated participation thanks to novel digital infrastructure. It’s again time to design what legal clarity should look like in a digitally-native world.
This brings me to a few open questions - what do you think? To be sure, there are no perfect answers and some of these issues point to different solutions depending on the relevant DAO’s mission, but hopefully these spark an exchange.
- Assuming DAOs themselves want protections at least as robust as those afforded to today’s multinational corporations while striving to remain decentralized, what should those protections look like? A key tenet of crypto is recognizing the power of code as law, with more and more adjudication moving on-chain. However off-chain, it can be tough to limit liability where the impact is global - that is, if we are building cross-border squads that coordinate on-chain around public goods that are by definition non-excludable and non-rivalrous, then the impact (read: potential plaintiff pool) is also global. Try as we might to avoid skeuomorphic design thinking, nation states have a vested interest in protecting their citizens and resources, so recognizing or reconciling among existing off-chain legal boundaries around employment relationships, tax liabilities, investment schemes and commercial contract disputes, to name a few bodies of law, is the first step in planting a flag for where DAOs ought to fit in along each spectrum. I am however heartened to see mindful attempts at navigating conflicts within DAOs taking off all around us, including within Gitcoin.
- To what extent do builders or other contributors or participants want recourse in the meatspace if code is flawed? (hacks, rugs and other scams are all too common, as are code flaws like that which impacted The DAO) DAOs are running crypto after all, so the evidence points to lots of talent and capital coalescing cross-border despite adjudication systems steeped IRL, within the confines of nation-states. Moreover, open source development has featured global maintainers since the very start - @nayafia’s ethnography (Working in Public: the Making and Maintenance of Open Source Software) goes into this at length, laying bare the volunteer group efforts of devs worldwide. These efforts according to some should not adhere to the rules of scale seen in traditional corporations - and in DAOs we are seeing they feature squads autonomously coordinating in pods all over the world. Of course what’s also different in this age of Cambrian creativity is the sheer scale of talent and capital committing to open source - over 300k developers at GitcoinDAO alone! So what would an ideal adjudication state look like to you, anon? LLCs for instance, are creatures of contract, so they afford members lots of flexibility to tranche out governance or capital distribution rights but their membership is typically limited (as compared with publicly-traded corporations). So while the LLC structure recognizes the sovereignty and autonomy of a closed group to pursue profits together, LLCs can’t be porous in the way DAOs are meant to be. Trusts exist to benefit a broad swathe of beneficiaries but often lack contracting abilities (instead, their trustees are endowed with those powers). Sometimes foundations, cooperatives or ESOPs might be a good fit. The design space is open so long as we honestly reckon with regulatory worries - if an actor is harmed interacting with a DAO or smart contract, or a contributor mistreated, how do existing legal remedies or rails in the meatspace apply to resolve open issues? By way of example, despite efforts by some commissioners to modernize the hurdles to participation in the capital markets, investor sophistication is still based on wealth or income. What metrics should be used to gate participation in DAOs (if at all), to mitigate risk, deter crime, protect bystanders, and grow the DAO space? Should DAOs adopt clawback incentives for instance?
- In a world where tokens align the interests of producers and consumers, users and owners, creators and fans, along what lines should property rights be drawn? Property rights have long been a bedrock of US democracy, and recognized as critical drivers to economic growth and general welfare. In a world where the legacy legal rails have been refined to tranche out risk and reward in ever-narrower slivers of property rights, how should assets and proceeds be shared within and outside of DAOs? Public private distinctions are crumbling.
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In sum, I am grateful in these first 100+ days to observe a bona fide Schelling Point for creative mechanism design around talent and capital to advance public goods, and look forward to the exchanges to come at Schelling Point this week, including @glenweyl and @audreyt’s plurality paradigm - hope to see you there! What ETHDenver talks are you most excited about?
In the meantime, let’s keep running the experiment responsibly, and sharing notes. Thank you Kyle Weiss and Rodrigo Seira Silva-Herzog for previewing. You can also find me on Medium @irinamarinescu