A Path to Decentralized Governance for Aragon - Thoughts of an Outsider

Greetings Aragon community,

Since this is my first post, I will introduce myself: I am a diplomat of 15 years of experience with extensive focus in the last decade on governance and power sharing arrangements between states and constituent states in federal arrangements. I have done my fair share of reading and learning about the current state of play in governance in DAO’s, however my “on the ground” experience, especially in the Aragon ecosystem, is limited. As such, in response to the Project Funds Transfer (@mlphresearch) as well as the Moving Aragon to DAO 2.0 (@ronald_k) proposals, I would like to share some thoughts/ideas as humble opinions of an outsider that means well. Most of these are actually compilation of / inspired by the ideas already posted in the replies (@joeycharlesworth @AlexClay @fartunov @mheuer and many others) in the relevant threads, so consider this an attempt to summarize some key points.

One disadvantage of using forum threads for ideation is the branching off in the replies, which can provide its advantages, but usually ends up diluting the discussion around the main argument. At the outset, I think it would be wise to compartmentalize the issues at hand, such as:

  1. Delaying the Project Funds Transfer Proposal
  2. Understanding the Options & Deciding on AN DAO Governance
  3. Confirming Technical & Legal Feasibility
  4. Updating the Charter
  5. Implementing Initial Governance (Election and Voting Mechanisms) Revamp
  6. Initiating first step of project funds management decentralization

While these issues, as well as their methods and timing are all interlinked, from an efficiency standpoint it makes sense to have separate Miro Board type discussion platforms for each aspect, freeing ourselves from the limitations imposed by “reply to above post” thread method. I will try to limit myself to the governance and decision making/election mechanisms aspect, but I will also list some questions which I gathered from the threads on various related topics for further, separate discussions.

KYC vs Anon - The First Fork in the Road:

The potential solutions that we will discuss will significantly differ depending on whether you will make it a requirement for an ANT user to disclose identity to partake in voting. The legal experts can correct me here if I am wrong, but take the idea of ANT holders expressing their will through becoming a member of Aragon Association Member’s Assembly (AAMA) and updating AA in such a way to allow the Assembly to have a say over the treasury management: How can the ANT holder anon0x1337z0r become a member of the Aragon Association Member’s Assembly? Since we do not have a truly proven method of zero-knowledge KYC that could be utilized at enterprise scale currently, then the options remain as follows:

  1. Demand full KYC for becoming members of AAMA (solid from legal perspective, bad from web3 angle)
  2. Establish web3-native gating mechanisms for participating in voting as a pseudonymous member, through the use of things such as POAP’s, NFT’s or DAO role badges for a semi-decentralized system to test things out (good from web3 angle, but further reduction in participation)
  3. Allow full anonymous participation in voting (good from web3 angle, but open to whale/sybil/vote market attacks without some custom parameters such as weights/conviction)

In my opinion this is the first community-wide focused discussion topic you should have, for its implications are enormous for all other steps.

Universal vs Specialized Voting/Election System:

The second focused, separated discussions should revolve around the question whether you are going to come up with a one size fits all solution for all decisions/elections, or if you want to spend more energy to come up with custom solutions for different problems.

A DAO’s voting needs for treasury management or supply/distribution adjustments have significantly different implications than its voting needs to resolve what the DAO mascot should be which is different from which health insurance provider to collectively lobby for paid contributors. In my opinion, each of these areas depending on how you guys do things around here should be categorized and a custom voting solution should be established for each, such as:

  • Member addition/termination
  • DAO Constitution changes
  • Treasury Management
  • Social Media, website, marketing decisions
  • Etc.

Similarly, election systems (sortition? Geographic or sub-dao based quotas?) for different bodies should also have custom tailored solutions. Some bodies depend on community-wide legitimacy, while others such as the technical committee could be voted among techie members only. The downside to this of course is the technical limitations as well as finding the balance in not alienating to-be voters by increased complexity (which can be remedied with incentives which we will talk about soon).

Simply relying on delegation & quorum and depending on the will of the masses is a scenario for potential disaster due to disinterest & lack of knowledge of the good-willed participants and the exploitation of the malicious actors. Decentralization does not have to mean one man = vote or one token = one vote. We can do better. Thus the action point for this aspect would be to first categorize the types of decisions as well as the types of committees/bodies that you see your future DAO having and come up with systems for each.

Tension between the founders and the ANT holder community:

As someone who is not a stakeholder or holder of any ANT tokens, I can point at the elephant in the room and highlight the importance of finding a balance between the interests and fears of the founders (a general term I use for the centralized entity right now) as well as the decentralization expectations of the community at large. Please do not get offended when I say this as a neutral outsider, but in my own learning experience in the last two years when talking to people in the industry I have heard many comments that Aragon has deviated from its original path when it comes to decentralization. The founders have to take concrete steps to show to the community that decentralization is still something that they also believe and genuinely want to attain. On the other hand, the community should also understand that changing the course of a ship this size, in uncharted waters, while devising the tools on-the-go during the trip, has to take place in incremental, experimental, but safe steps.

This is an issue that I have experienced many times in my career when bringing two communities that do not trust each other together and asking them to find a way to “govern and cooperate together”. Luckily, there are plethora of different tools (variables/weights/thresholds) that will achieve a degree of decentralization that should satisfy both camps. For example;

  • For x years ahead, for the vote to move funds from treasury, the vote total from the ”founders” has a weight of %50, while the vote of ANT holders has a weight of %50.

  • After y more years, depending on the performance of the system this weight is changed to %25 - %75

  • After z more years, depending on the performance of the system this weight is changed to %0 - %100

  • You could give certain weights to members of your community over the average ANT holder to make your system more resilient against vote buying and sybil attacks. There could be different variables such as date registered on aragon forums, number of posts, number of discord/coordinape thumbs ups , whether one is a holder of a job badge within the organization or not, whether one has made a proposal in the past that was voted in favor, number of such proposals, etc. and one hundred more ways of ensuring that the vote of those who care will always be above the speculator and the vote-rigger-planner.

  • As a step towards decentralization, you could utilize holographic consensus where token holders at large, be it through direct or delegated votes, can participate by signalling which proposals are worthy of discussion and voting, before asking every member to vote on everything. This would streamline and optimize the process of voting and since there would be less amount of proposals to read/go through to vote, it would incentivize people to participate.

You could further tweak all of these with rules of continuation/expiry (do we go to next step of incremental decentralization if X percent votes for it, a.k.a sunset clause, or do we go to the next step of incremental decentralization unless X percent votes against it, a.k.a. auto-proceed clause).

Finally, we should not overlook the “3rd group” here, the actual employees of Aragon: They might not be holders of tokens at influential amounts, or they might not have positions in the management structure, but considering the impact of their contribution, the balance that will be achieved in the “decentralization”, especially in the “weight of the votes” discussion, should reflect their interests and expectations as well.

Action Point: In a MIRO style board, compare and discuss different types of potential attacks and design the system up from the worst-case scenarios, coming up with a balance that will be acceptable to both the “founders” and the community.

Incentivizing Meaningful Voter Participation vs. Protection against Malicious Behavior:

Last but probably most importantly, novel ways should be tested to incentivize meaningful voter participation. Similar to how even Vitalik has not been able to solve best way to vote without battle-tested zero proof knowledge systems, there is no true-for-all answer here.

Token Curated Registries for example, offer financial incentives to ensure that people would spend time and energy to vote for the most viable option and make money in doing so. Could you advertise to your memberbase a system like “participate in our voting system and after 10 votes on the winning side, start earning VANT tokens for each vote you cast!”? Can you gate access to certain products, badges, POAP’s or NFT’s or bragging rights for those who participate? What about limiting certain paid roles/ committee memberships to a certain voting participation threshold?

What elements from the octalysis framework can you utilize to gamify voting?

Action Point: Come up with a big list of ways of incentivizing (financial or otherwise) meaningful voter participation & create a tiered system.

Other Questions for Focused Discussions:

I have already taken too much of your time, but I want to leave you with some other questions that I have summarized from the replies to the relevant threads.

  • The Future of the Charter: Do we limit these decentralization proposals to fit the charter as it is, do we update the charter to suit these proposals or do we scratch it all and start anew?
  • If the treasury control will be moved and significant amounts will be transferred, what of Swiss Tax Authorities?
  • Risk of unlimited liability without a DAO legal wrapper - is this something that can be overlooked?
  • The scenario of AA Committee not being bound by the decision of ANT token holders: What happens if the will of the community is not respected?
  • How would the funding requests be prioritized? First come first served? A prioritization vote mechanism on top?
  • How is staked ANT in the Aragon Court handled? Can it be used in voting? Does it get a special weight?
  • If the decision is to go the “legally safe way”, is the AAMA the optimum body under Swiss law to reflect the will of the community? Can AAMA membership be used to elect members of the AA and thus indirectly controlling the treasury? Would this satisfy the need for “decentralization” as an intermediate step?

As I said in the beginning, this is just an attempt by an outsider, in good faith, to contribute. I will try to visit and clarify things if there are questions and I am ready to help in the voting/election mechanisms aspect to the best I can, if there is a governance focused team to work with in the DAO.

5 Likes

Thank you for these excellent comments and I look forward to reading the community’s reactions to them. With regard to this particular proposal, just a few quick thoughts:

  1. Some of the questions you’ve raised will be addressed in the finalized version which will be published next week. The core of the proposal will remain intact and it is kept simple on purpose, limiting the delegative voting system to the treasury and core governance. The objective of the proposal is to establish the basic foundations for an on-chain DAO, but it does not exclude iterating on any number of other details during the planning phase over the summer, the implementation phase at the end of the year, and thereafter.

  2. The proposal is best interpreted in light of the three meanings of the word “autonomous” in D-A-O: (1) autonomous as in automated and resistant to tampering and censorship (smart contracts on public blockchains), (2) autonomous as in sovereign (permissionless tokenized voting as a decision-making mechanism), and (3) autonomous as in able to decide and organize for oneself (autonomy of the various guilds/sub-DAOs and their contributors to, with the help of funding from the treasury, self-organize their work).

  3. In the long run, I expect delegated token holder voting to be required only for the most important decisions. The vast majority of day-to-day decision-making, especially as it relates to the work of various sub-DAOs, guilds, and other entities contributing to Aragon, should probably not go through the delegative voting system. As such, I would personally focus less on incentivizing high participation rates on a constantly high number of general votes, and much more on establishing a professionalized, well-functioning delegation system, giving various parts of the DAO as much autonomy as possible, and thereby reducing the coordination overhead for everyone involved.

  4. I think a small number of well-designed fail safes are a much better way to get going than increasing organizational/governance complexity in an attempt to pre-empt every or even most negative scenarios. I think the DAO could save a lot of time and effort by starting simple, safely, and iterate from there. In the context of the proposal linked above, that starting point is an on-chain DAO governed through a delegative voting system. Another one is the AA legal wrapper route proposed by @ronald_k. If someone proposes a third, fourth, or fifth option, they should all be included in the initial signal vote. However, my personal preference would be to limit that vote to a high-level direction, and give the DAO the freedom to then hammer out the various details, some of which may actually be better dealt with at the level of individual guilds/sub-DAOs.

Anyway, my few cents for now. Really excited to see so much thoughtful commentary on these topics. It definitely makes me optimistic about this next stage of Aragon’s development!

3 Likes

@Sertac thank you for this detailed and thoughtful comment.

For most, the exposure to ANT is negligible (even if we assume they could vote with their unvested packages which they cannot). That certainly makes for a difficult balance of incentives.

Cannot agree more.

The currently implemented “design” is overcomplicated and arguably one of the more dysfunctional we are seeing in the industry. Taking the opportunity to drastically simplify things (given sufficient fail-safes) and re-build thoughtfully should be embraced.

2 Likes

This is a really meaningful contribution to the conversation and I think captures the sentiments of many current stakeholder groups. As always, the outsider or beginner’s mind can see a lot of things that those who are more deeply enmeshed in the community know to be true but often cannot see or forget.

@Sertac I strongly encourage you to keep making these contributions and hopefully find some space in the governance proposal with @lee0007 to more formally participate

2 Likes

Agree. Thank you for this just excellent summary of the perspective, feedback and insight you shared during the development of the dGov proposal. Sorry I have not particpated more in this conversation, now that it is in the forum. tbh the challenges you’re tackling above are at a level best left to the experts and I feel my place is simply to observe and learn from these discussions.

In regards to tax law @gabriela has an excellent summary #97 here and as per @b3n comment above and the tags and links I’ve shared haha - provided funding - dGov will support your ongoing governance efforts in any way we can. Given you’re already working with talent like @mheuer @alex-kampa I share @mlphresearch optimism and am excited to journey our path to decentralised goverance with y’all

Thank you very much for your comments and suggestions.

I think it would be prudent and efficient to open up a Miro board, where we can have separate, but close to each other, walls to write down the different questions, mechanisms and potential parameters for those mechanisms so that we can see what is out there, what the tech team could possibly work on / solve, and from those we could come up with lists of 5-10 proposals for each that can be discussed further in the community to see which would get most widespread support. This would also allow those interested in dGov to work async and benefit from the wisdom/experience of each other.

1 Like