I’ve seen the term “rent-seeking” thrown around a few times wrt this proposal in the yEarn governance forum and want to share some thoughts I have about this. The thread raises an interesting question: is Aragon Court (or the Aragon Network broadly) a “rent-seeking” protocol? I would argue “no”, at least not today.
Rent-seeking is a term of art in economics to describe a specific behavior.
Investopedia defines the term: “Rent seeking (or rent-seeking) is an economic concept that occurs when an entity seeks to gain added wealth without any reciprocal contribution of productivity.”
The Library of Economics and Liberty further adds a political dimension, defining rent-seeking as: “[Rent-seeking is when people try] to obtain benefits for themselves through the political arena. They typically do so by getting a subsidy for a good they produce or for being in a particular class of people, by getting a tariff on a good they produce, or by getting a special regulation that hampers their competitors.”
Taken together, we can say that rent-seeking is an economic concept that occurs when an entity seeks to gain added wealth without any reciprocal contribution of productivity, typically using government policy to advantage themselves vs others. Note that rent-seeking is different than profit-seeking, although higher rents can of course confer higher profits.
Does Aragon Court or the Aragon Network “seek to gain added wealth without any reciprocal contribution of productivity”? While that could happen some day, I would say this is definitely not the case today, nor is it likely to be the case for the forseeable future. I believe the threat of forking and competition generally would protect Aragon Network customers against rent-seeking behavior.
The main impediment to competition in land-based economies is scarcity (artificially induced by government policy or otherwise). In contrast, in the digital economy of Ethereum the only inherently scarce resource on the blockchain is block space (and ETH to pay for that). Since anyone could spin up a competitor to Aragon Court and the Aragon Network for the price of gas, even forking the entire state of the court and the network if they wanted to preserve some network effects, this should keep the Aragon Network on its toes and responsive to price sensitivity among users. And since Ethereum is a global protocol not subject to the whims of any one government, I cannot see the Aragon Network ever using government policy to privilege itself over other protocols.
Regarding the narrower question of rents, I believe reciprocal value is provided for the cost paid to consume network services. The specific value is similar to that of insurance: in case anything goes wrong, Aragon Court is there to help. It is up to each court subscriber to decide if that cost is worth it to them, and that is their free choice, same as the choice to purchase any other good or service. If subscribers find the cost to not be worth it, they can seek to obtain dispute resolution services elsewhere, or forgo that service altogether. There is no rent: only free trade.