Decentralized Governance in the Wild

Oct 12, 2020 at 19:22 UTCUpdated Oct 12, 2020 at 19:33 UTC.Blockchain-based networks provide a unique and unprecedented opportunity to experiment with new forms of organization - both organization of information and software processes as well as governing human action.

When a group of enthusiastic entrepreneurs or developers design a new blockchain-based network - figuring out the consensus mechanisms, the economic logic and the governance - it's difficult to predict how their encoded schemes will function once released into the wild.

Once a network is launched, the consequences of the inevitable mismatches between the real world and the network's logic become apparent.

Assuming the network has some capability for self-modification and growth built into it, one also has the chance to improve and adapt.

For me and the other leaders of the SingularityNET blockchain-based AI network, the KuCoin hack that occurred on Sept. 25 provided an opportunity to re-evaluate the assumptions underlying some of our governance mechanisms, and think about how they might be augmented for superior functioning in future situations.

Specifically, the attack led us to think hard about how liquid democracy mechanisms might be used to enable emergency response that is decentralized and democratic and also rapid.

A number of other blockchain-based networks similarly affected by this security breach chose to use centralized control mechanisms built into their smart contracts to rapidly pause trading of their tokens, and then hard-fork their token smart contracts, thus eliminating or reducing the hacker's ability to profit from their theft.

A centralized "Off switch" or a centrally coordinated hard fork seemed against the decentralized ethos within which most current blockchain-based networks were founded.

In the domain of emergency response, liquid democracy could work as follows: Each participant in the network could nominate a handful of network participants as "Emergency delegates," and specify that, if a network emergency occurs and a rapid vote is needed, any one of these emergency delegates should be considered able to submit their vote for them.

This is why agile software development methodology exists, and it's why the design of blockchain-based networks needs to be agile as well and get progressively adapted based on the experience of releasing these networks into the wild.