Blockchain as a Confidence Machine: The Problem of Trust and Challenges of Governance

Articles / News / PublicationsJanuary 6, 2025
BlockchainGov Scientific Publications 2024Scientific Publications 2024 Our team has worked on extensive academic research throughout the year, including ethnographic research on DAOs, governance disputes, AI system dissection, and more. Here is a complete list of all of BlockhainGov Scientific Publications in 2024: Mannan, M. & Pek, S. (2024) “Platform Cooperatives and the Dilemmas of Labor-Member Participation”, in New Technology, Work and Employment, Vol. 39, No. 2, pp. 219-237, https://doi.org/10.1111/ntwe.12273.Mannan, M. & Pek, S. (2024). “The Shadow of Digital Feudalism in the Distributed Metaverse”, submitted to Business & Society. Mannan, M. (2024) Blockchain Lawyering (first draft submitted to IGLP GSA 2024 in South Africa)Nabben, K. & De Filippi, P. (2024) Accountability Protocols? On-chain Dynamics in Blockchain Governance, Internet Policy Review. Volume 13, Issue 4Werbach, K, De Filippi, P., Tan, J., Pieters, G. (2024) “Blockchain Governance in the Wild”, Crypto-Economic Systems, Vol. 3, Issue 1. MIT Digital Currency Initiative. Mannan, M. & Pek, S. (2024) “The Regulation of Digital Labour Platforms: Broadening our Understanding by Embracing a Plurality of Organizational Archetypes” (to be submitted to Policy & Internet). Kamalova J. “Exploring Blockchain-Based Alternative Dispute Resolution: Limitations of Traditional Methods and Prospects for Further Research” (2024) Harvard Negotiation Law Review, ForthcomingBodo, B. & De Filippi, P. (2024) “Trust in Context : The impact of regulation on blockchain and DeFi”, Special Issue on The Impact of Emerging Technologies on Trust and Governance, in Regulation and Governance.Mannan, M. (2024) “From Digital Humanitarianism to Crypto-Humanitarianism”, International Trade and Business Law Review, Vol. 24, pp. 121-148. Merk, T. (2024) “The unusual DAO: an ethnography of building trust in ‘trustless’ spaces” (under revision at Internet Policy Review)Alston, E., & Cossar, S. (2024) “Encryption as Privacy” (submitted in SSRN, for submission at the Cambridge Law and Institutional Economics journal). Merk, T. (2024) “Why to DAO? A narrative analysis of the drivers of tokenized Exit to Community” in Proceedings of the European DAO Workshop, https://doi.org/10.48550/arXiv.2407.14327. [...]
Polycentrism / Publications / ReportsNovember 19, 2024
Research Report on Blockchain Governance DynamicsReport on Blockchain Governance Dynamics Download the report here. As decentralized technologies such as blockchain rapidly evolve, establishing effective governance models is crucial to guide stakeholders toward a sustainable and equitable digital future. BlockchainGov and Project Liberty Institute have embarked on a multi stakeholder governance initiative on good governance for a responsible decentralized technological ecosystem to enhance understanding and promote responsible practices in this landscape. The first intermediary report compares for the first time governance mechanisms and dynamics across 11 major blockchain networks.Using an interdisciplinary and comparative approach, the report explores prominent blockchain systems including Avalanche, Bitcoin, Cardano, Cosmos, Ethereum, Filecoin, Optimism, Polygon, Polkadot, Tezos, and Zcash. It examines these networks through a multidimensional governance taxonomy, collecting data through desk research and in-depth interviews with key stakeholders.The Multi Stakeholder Council set up by Project Liberty and BlockchainGov for this Initiative has been instrumental in guiding the development of this report.The analysis has uncovered six key findings related to the legal entities created to support blockchain networks, power distribution across governance areas and stakeholder groups, decentralization objectives and challenges, the interplay of on-chain code and off-chain practices in governance formalization, predominant decision-making mechanisms, and processes for handling security breaches.The intermediary report highlights that while blockchain networks are technically decentralized across nodes, their governance involves multiple layers. Hence determining influence requires scrutinizing the types of decisions being made, the stakeholders involved, and the specific mechanisms utilized. This understanding enables designing inclusive governance aligned with community values. The report also analyzes how governance comprises both on-chain protocol rules and off-chain social practices.The key findings of this report will guide the formulation of good governance recommendations providing pragmatic guidance to stakeholders and the overall ecosystem of blockchain and decentralized technologies. This pioneering comparison marks a milestone to advance the good governance of blockchain and decentralized technologies.The research team crystalized the findings of this comparative studies into the practice-oriented “Blockchain Governance Toolkit – A Cookbook for a Resilient and Robust Ecosystem”! [...]
Blockchain Constitutionalism / Books / PublicationsSeptember 24, 2024
Blockchain Governance | MIT Press Essential Knowledge VolumeBlockchain Governance By Primavera de Fillippi, Wessel Reijers, Morshed Mannan An engaging and comprehensive exploration of how fundamental ideas in political and legal thought shape the governance of blockchain communities, and are, in turn, shaped by blockchain technology. How can digital cash truly be “trustless”? What does it mean that blockchain offers a new paradigm of the “rule of code”? How are decisions made when a blockchain system faces an emergency, and who gets to make those decisions? In Blockchain Governance, Primavera De Filippi, Wessel Reijers, and Morshed Mannan offer answers to these questions and more, in an accessible, critical overview of legal and political issues related to blockchain technology, now the foundation of a multi-billion-dollar industry. Moving beyond the hype, they show how blockchain offers fertile ground for experimentation with radically new ways to govern people and institutions.Blockchain-based systems, like Bitcoin, Ethereum, Tezos, and countless others, offer new ways of organizing digital cash, “smart” contracts to execute transactions, non-fungible tokens (NFTs) to collect art, and decentralized autonomous organizations (DAOs) to coordinate humans and machines. What these applications have in common is that they govern the behavior of people and artificial agents through distributed systems. Drawing from their extensive experience in researching blockchain technologies and communities, the authors discuss the origins of Bitcoin in cypher-anarchism and extropianism, spectacular events like the million-dollar theft of the DAO Attack, and the hostile takeover of the Steem platform. While engaging with political and legal thinkers such as Hobbes, Kelsen, and the Ostroms, these narratives explore how blockchain governance problematizes fundamental concepts such as rule of law, sovereignty, legality, legitimacy, and polycentric governance.The book is the result of years of extensive research in blockchain technologies and communities and it feels like an excellent introduction to Blockchain Gov’s research work on decentralized governance. Get the book at this link and find the audiobook version on Audible! [...]
News / Polycentrism / Publications / ReportsJuly 2, 2024
Blockchain Technology and Polycentric Governance – A research reportBlockchain Technology and Polycentric Governance - A Research Report Download the report here. This report, released in its final version in July 2024, addresses the polycentric governance of blockchain systems, following conversations held from September 2022 until September 2023 by a reading group of blockchain practitioners and academics. The ERC-funded BlockchainGov project led the reading group. Since the publication of the Bitcoin whitepaper in 2008, blockchain technology has gained increasing popularity for being a “decentralized” ledger of transactions. Collectives of people have formed to discuss and decide on—to “govern”—the evolution of blockchain networks and blockchain-based applications, creating what we refer to as “blockchain systems.” While much literature is dedicated to understanding the governance of blockchain systems, no substantial efforts have been made to apply the concept of “polycentricity” to blockchain governance. Polycentric governance systems are characterized by multiple autonomous decision-making centers with overlapping areas of responsibility, which both compete and cooperate within a common overarching system of commonly agreed-upon rules, spontaneously or deliberately generating a shared social order. A term initially presented by Michael Polanyi and famously further developed by Vincent and Elinor Ostrom, polycentricity allows us to understand blockchain systems’ structure, process, and outcome. [...]
Blockchain Constitutionalism / News / Publications / ReportsJune 10, 2024
The Blockchain Governance Toolkit – A Cookbook for a Resilient and Robust EcosystemThe Blockchain Governance Toolkit - A Cookbook for a Resilient and Robust Ecosystem Download the report here. BlockchainGov works to support and guide decentralized communities in the process of choosing and implementing their own mechanism of distributed governance.BlockchainGov has embarked with Project Liberty Institute on year-long research initiative on the governance of blockchain networks and decentralized systems, exploring ways for communities to design governance models that allow people to be represented and express their voices. Today our collaborative endeavor culminate with “The Blockchain Governance Toolkit – A Cookbook for a Resilient and Robust Ecosystem”! After investigating the governance dynamics of 11 leading blockchain networks, this toolkit translates our insights into actionable tools and recommendations aiming to pave the way for a more equitable and sustainable technological ecosystem, at large.Through this toolkit, we aim to help governance designers develop resilient and robust governance systems for their respective blockchain networks, considering their respective preferences, goals, and contexts.We decided to structure this report as a toolkit (a cookbook) rather than a technical manual so that we can present multiple governance solutions (recipes), each with their unique features (flavors). We articulated five steps for a better governance:Step #1 – Blockchain governance requires balancing trade-offs. One must start by picking flavors. Expediency or Participation? Immutability or Adaptability? Determinism or Discretion?Step #2 – Governance primitives enable desired designs. Now, pick your ingredients! Expedient → participatory: multi-signature councils to plural voting. Immutable → adaptable: exit-only systems to improvement proposals. Deterministic → discretionary: self-executing systems to rough consensus.Step #3 – Resilient governance involves balancing preferences. Strong flavors in check! Adopt power checks for expedient systems and hard forking for immutable systems. You can use blockchain constitutions for adaptable systems or on-chain time-delay for heavily deterministic systems.Step #4 – Feedback loops are crucial for refining blockchain governance. Keep improving your recipe! Feedback loops should leverage humans as sensors, especially in systems where technology and society mix in complex ways, such as blockchain governance systems.Step #5 – Pick up a legal entity. Now food is ready and must be served! Legal entities aid blockchain participants in balancing ’embeddedness’ and ‘disembeddedness’. By possessing separate legal personalities, they can engage in contracts, own assets, and shield entities from creditors, ensuring both ‘entity’ and ‘owner’ protection.Hungry for more choice and voice in the technology that impacts your daily life? Have a look at our Blockchain Governance Design Cookbook! [...]
Blog posts / Coordi-Nations / PublicationsMay 6, 2024
Coordi-nations: A New Institutional Structure for Global CooperationCoordi-nation: A New Institutional Structure for Global Cooperation Primavera de Filippi and Jessy Kate Schingler, June 13, 2023. Introduction Networked communications have enabled new ways for people to coordinate and to engage in collective action, achieving shared goals and upholding shared values. Meanwhile, existing governance institutions — including governments and nation states — are failing to keep up with the changes brought about by these networked technologies. In this essay, we elaborate upon the notion of “coordi-nations” as a new type of organizational structure that can foster cooperation at a (local and) global scale, through shared values and participatory decision-making. Coordi-nations are a new form of network sovereignty that spans traditional geographical boundaries. By harnessing the power of digital communities and modern information technologies, coordi-nations provide innovative solutions to complex global coordination challenges, by promoting cooperation and acknowledging interdependencies amongst transnational communities. The Limitations of States “Nation-states fail when they are consumed by internal violence and cease delivering positive political goods to their inhabitants. Their governments lose credibility, and the continuing nature of the particular nation- state itself becomes questionable and illegitimate in the hearts and minds of its citizens. The rise and fall of nation-states is not new, but in a modern era when national states constitute the building blocks of world order, the violent disintegration and palpable weakness of selected African, Asian, Oceanic, and Latin American states threaten the very foundation of that system.” — Rotberg R (2003), ‘The Failure and Collapse of Nation-States: Breakdown, Prevention, and Repair’, in ‘When States Fail: Causes and Consequences’ Nation-states, despite their historical significance, are politically hegemonic structures that are failing to keep up with the changes brought on by networked communication and globalization. Membership in traditional nation-states is determined by blood or by land, without easy mechanisms to opt-in or opt-out. Citizenship within the framework of the state often requires choosing a single one, such that pluralistic allegiances and protections are rarely possible. States struggle to address global challenges (such as climate change) or challenges where cooperation is needed beyond national borders. Territorially-bound governance and sovereignty have contributed to institutional inertia, especially in the international arena, leading to a significant erosion of trust in many state institutions, and a decreasing sense of agency and shared identity among individual citizens. The Emergence of Coordinations Coordi-nations are a new institutional structure that offers an innovative and collaborative approach to global cooperation and coordination. They tap into the potential of information and communication technologies, providing opportunities for global governance and collective agency that were previously unexplored. Coordi-nations do not seek to replace the institution of the “state” but rather offer a new take on the existing concept of the “nation” that supports and cultivates emergent networked identities (i.e. digital nations). Coordi-nations rely on modern information and communication technologies to create new infrastructures of sovereignty, which allows for the progressive evolution and independent spheres of operation over time. Coordi-nations versus Traditional Nations Although coordi-nations are organized around features such as kinship, shared identity, and belonging that have nation-like qualities, they also differ from the traditional concept of national identity in several ways. Nations are often territorially bound, and membership is generally determined by birthright (although mechanisms for opt-in citizenship also exist). Coordi-nations are non-territorial in nature; they form through voluntary association, shared values, and mutualism, rather than geographic boundaries or inherited identity. People voluntarily join or associate with one or more coordi-nations based on their affinity with that coordination’s activities and values. As opposed to traditional nations — many of which govern themselves through the centralized institutions of the state — coordi-nations prioritize participatory governance and decentralized decision-making in a self contained domain that exists in parallel to the state. Traditional national identity is perceived as a singular, overarching organizing principle of a person’s identity, whereas coordi-nations recognize and embrace plurality. Individuals can identify with multiple coordi-nations, allowing for the coexistence of multiple identities. Coordi-nations vs Balaji’s Network State Coordi-nations share some similarities with Balaji Srinivasan’s concept of the Network State. They both relate to alternative forms of governance and coordination beyond the Westphalian state system, and both are forms of network sovereignties that respond to the new capacities enabled by modern information and communications technologies. However, they also differ in their underlying principles and approaches in certain important ways: Scope: Balaji’s conceptualisation of the network state envisions a comprehensive replacement or alternative to traditional nation-states. It seeks to create a parallel state infrastructure that operates through digital networks and platforms. Coordi-nations, on the other hand, do not necessarily aim to replace nation-states but rather explore new ways in which existing and emerging network sovereignties can be supported or formed via digital technologies. Coordi-nations introduce new layers of sovereignty that are not inherently territorial. Approach to Identity: Balaji’s network state concept does not specifically address the formation of collective identities or national identities, but rather focuses on the use of technology to coordinate groups of aligned individuals. Coordi-nations, on the other hand, emphasize the endogenous formation of collective identities and belonging as a defining criteria, based on shared values, solidarity, mutualization, agentic governance and voluntary association. Technological Emphasis: Balaji Srinivasan’s network state concept heavily relies on technology, particularly blockchain and digital platforms, to enable new forms of governance and coordination. It envisions the use of digital currencies, smart contracts, and decentralized applications as core infrastructure of the network state. Coordi-nations may rely on blockchain technology to the extent that it is instrumental to facilitate the governance of new networked identities, in a way that is more compatible with the principles of self-sovereignty and self-determination. Relationship to Existing Institutions: With his definition of the network state, Balaji does not propose a significant departure from the institutional form of the state. Coordi-nations, on the other hand, do not seek to replicate the existing institutional form of the state, but rather aim to support and cultivate new layers of sovereignty associated with networks. Coordi-nations cultivate opportunities for mutualism and solidarity outside the framework of existing institutions, without necessarily competing with them. Yet, insofar as both network states and coordi-nations can acquire diplomatic recognition by other states, both could potentially enter into partnership with other nation states and other relevant actors in international relations. Defining Features of Coordi-nations Coordi-nations are an emergent form of networked sovereignty. They rely on networked communities as an animating force for cooperation, collaboration, mutualism and solidarity in a context of growing global interdependencies. The growth of networked communities may have significant implications for global governance, global trade and mobility.While every coord-nation will be different, there are certain defining features that they all share in common. Coordi-nations are designed around voluntary association and participatory governance. The nodes of a coordi-nation have achieved a certain level of self-regulation (autopoiesis) in the provision of internal needs (mutualization), before entering into relationships with other nodes. This ensures that nodes enter into relationships with other nodes in the coordi-nation based on their own agency and effective governance.The network aspect of the coordi-nation emerges from a bottom-up process of “supersidiarity” where nodes willingly decide to mutualize resources at the network level, as a means to facilitate and embrace a reciprocal interdependence. As a result of this process, the sense of identity and belonging grows to include the network level as well as the node. Individual nodes are not subsumed by the network; rather they become the constitutive parts of the network.Through this collectivization and mutualisation of resources, coordi-nations reduce incentives for free-riding, creating “economies of scope” where all nodes are better off than they would be otherwise, and the successes or advancements of any one node will have positive repercussions on the coordi-nation as a whole.Coordi-nations do not leverage economies of scale for their own growth, but rather expand through a process of fractal replication and interconnection between nodes that share similar cultural and functional patterns. This creates an implicit literacy between nodes that reduces the overhead for interaction, collaboration and cross-pollination, creating a recognizable “pattern integrity” across the network as a whole.Finally, coordi-nations are autopoietic systems that are operationally closed but cognitively open to interface with the external environment. They create symbiotic relationships with the outside world, seeking new ways to exchange resources, people and ideas with external systems. This produces learning loops thereby allowing for the coordi-nation to constantly adapt and innovate. The recipe for creating a coordi-nation has 7 steps Build or Join a Community of Kinship: find or found a community that purports to fulfill the needs of its members through participatory governance and voluntary participation.Identify other related or resonating communities: find communities that share the same “pattern integrity.”Encourage these communities to support one another: explore bilateral or multilateral collaborations across communities that are mutually beneficial.Create a collective identity, by naming it into existence: the act of naming creates a referent that catalyzes the process of identity formation, both from within and from outside the collective.Pool resources in common and collectively manage them: delegate and redistribute resources endogenously within the network through a process of super-sidiarity. This requires establishing a governance structure for the management of the resources held in common.Organize into a group capable of collective action: leverage capacities and common resources to operate exogenously. The collective becomes an agent acting on its own behalf, with its own resources and identity.Increase interdependence by interweaving communities: nodes in the network share forms of equity with one another, thereby increasing the costs of exit and ensuring the long-term sustainability of a collective that is greater than the sum of its part. Allow for processes of mutual adjustment that allow for stable formations to emerge at the network level. Coordi-nations and Institutional Scaffolding Coordi-nations rely on new forms of institutional scaffolding in order to support the governance of new types of ‘networked’ nations. These institutional structures may look very different from the familiar infrastructure of the state. By emphasizing bottom-up supersidiarity, adaptability, and interconnectedness, coordi-nations allow for the creation of new layers of sovereignties that operate independently of existing nation states , yet nonetheless maintain an interface and symbiotic relationship with the existing state system.Exclosures are institutional rules the sole purpose of which are to protect particular community dynamics from the institutional environment around it. An exclosure leverages the rules of a particular system in order to build a protective membrane that prevents the institution from trespassing into this newly carved out territory. The power of an exclosure is that it speaks the same language (or ruleset) as the institutional enclosures that it tries to escape from, creating a “fence within a fence”. Thus, the only way for the surrounding system to reach inside the exclosure would be for it to break its own rules.Exclosures can be a useful way for coordi-nations to coexist with existing nation states by carving out space for experimenting with new power structures and governance models based on autonomy and self-determination, while still maintaining connections and engaging in constructive relationships with existing nation states. Specifically, exclosures can be instrumental to coordi-nations in the following ways:Testing and Prototyping: Coordi-nations require the flexibility to test and prototype different forms of governance and organization. Exclosures allow them to create and operate in specific domains independent of territorial laws and regulations, creating an environment conducive to experimentation. These innovations can potentially influence and inspire broader societal and governmental systems, contributing to the evolution of governance structures at all levels.Autonomy and Self-Determination: Exclosures enable coordi-nations to establish their own set of rules and norms, allowing for members to collectively shape their desired system of governance. Autonomy ensures that the coordi-nation can align its practices and decision-making processes with the values and interests of its members without undue interference from external authorities.Flexibility and Adaptability: Exclosures provide coordi-nations with the flexibility to respond to changing circumstances and evolving needs. Coordinations remain agile and responsive, fostering their capacity to cooperate with other stakeholders, including nation-states, while maintaining their distinct identities and goals. Conclusion In conclusion, coordi-nations represent a new institutional structure that can act at the geopolitical level, and which can foster fractal cooperation at local and global scales. By addressing the limitations of the nation-state system and leveraging the opportunities presented by the networked communication, coordi-nations empower individuals, leverage symbiotic relationships with their external environment, enable mutualization, and facilitate collective action. Through bottom-up design, adaptability, and emphasis on opt-in participation, coordinations have the potential to address global challenges while cultivating agency and capacity for complex decision making, nurture diverse identities, and contribute to a more cooperative and collaborative society. 🌟🌟 Thank you to the numerous participants at the Zuzalu Coordi-nations Workshop who co-created these insights, and to Zuzalu for hosting us! With special thanks to Zarinah Agnew, Scott Moore, Noah Lee, Josh Davila, LauNaMu, Silke Noa, Lou de Kerhuelvez, Morshed Mannan, Michel Bauwens, and numerous others. [...]
News / Publications / ReportsMarch 12, 2024
Proof of Humanity: Ethnographic Research of a “democratic” DAOProof of Humanity: Ethnographic Research of a “democratic” DAO Jamilya Kamalova, Sofia Cossar, Tara Merk.In early 2021, the first Sybil-resistant registry of humans was launched. The Proof of Humanity (PoH) registry and the PoH DAO is the first decentralized autonomous organization democratically governed running on the Ethereum network. To help us conduct this research, we relied on academic articles from a lot of different disciplines, such as political science, digital ethnography, democratic theory (especially literature conceptualizing Western liberal democracies to make sense of our empirical observations and findings), but also studies on blockchain systems and blockchain-based governance.The problem of this research is: What governance dynamics led to the Proof of Humanity DAO’s crisis and decision to fork?Our theory was that such a decision came from a persistent governance crisis caused by the absence of strong democratic elements, procedures, regulations, and institutions that could have supported the coexistence of its diverse community rather than leading to its growing and ultimately irreparable division. So we conducted this ethnographic study involving online observation, interviews, events, and institutional analysis. Participants signed community consent forms under BlockchainGov’s research ethics, approved by EUI/CERSA, and agreed to the use and publication of data collected about the PoH DAO community for this research project.Now, in March 2024, we are releasing an updated version of the research, integrating the feedback received from the community on the originally presented findings.Read the paper to discover more about our findings! This document is available in English and Spanish.Download the report here. [...]
Coordi-Nations / PodcastJanuary 25, 2024
Overthrowing The Network State: New EpisodesOvethrowing The Network State: New Episodes In the second half of 2023, Joshua Davila (The Blockchain Socialist) and Primavera De Filipppi continued their podcast series ‘Overthrowing The Network State’ (OTNS). he purpose of this series is to critique The Network State while also pulling out the salvageable parts and concepts in discussion with a variety of guests. We are overall critical of Balaji’s specific ideas in the book, but we want to discuss them with intellectual honesty and highlight the larger concepts around how these technologies are and could subvert state structures. An updated list of recent episodes follows. OTNS: Network States is what you get when you have VC-brain May 14, 2023 In this episode, Primavera (@yaoeo), Tara Merk (@mpg_dd), and I speak to Jahed Monand (@againstutopia), co-founder and partner of Cerulean Ventures, co-host of The Ownership Economy podcast (@ownereconomy), and left-wing anarchist. During the discussion, we spoke about Jahed’s interactions with Balaji, the violence inherent to borders, and the real problem with heavily regulated industries like healthcare (hint: it’s not the FDA). Jahed is also now officially the resident anarchist for the show. Listen here. OTNS: DAOs and Decentralized Mafias May 21, 2023 Primavera and Josh have been at Zuzalu and took the opportunity to speak with Ameen Soleimani (@ameensol) about his role in Ethereum history and the creation of Moloch DAO and Privacy Pools. We also discussed the geopolitical implications of crypto technology and how it relates to thinking about network states. Listen here. OTNS: The Rise of Coordi-Nations (Phase 2 has begun) June 11, 2023 Primavera and Josh spent about two weeks at Zuzalu in Montenegro with a team of people from Blockchaingov and elsewhere to concretely define our network state alternative of Coordi-Nations. We had five days of all-day intensive workshops and three days of public presentations where we shared our findings with the attendees of Zuzalu. Right at the end of our experience at Zuzalu, we recorded this episode to share what we came up with and our experience. Besides this episode, we have plenty of writing and presentations that will be making its way out once it’s ready. For the moment note that Phase 2 of the overthrow has officially begun and our focus of the series will start moving away from critique and towards building. Listen here. OTNS: Cosmo-Localism, Beyonders, and the Medieval Parallels to Digital Nomadism July 2, 2023 In this episode, we continue Phase 2 of OTNS with Michel Bauwens, founder of the P2P Foundation. We discuss his concept of cosmo-localism which advocates for everything heavy to be local, and everything light to be global, how many medieval institutions were cosmo-local, and the implications of the rise of knowledge workers detached from the physical territory. Listen here. OTNS: Is Code still Law? (Interview with Lawrence Lessig) August 27, 2023 In this episode we had the pleasure of speaking to Lawrence Lessig, the legal scholar known for coining the term “code is law” if you’ve been in crypto, you’ll know that this phrase has been very influential in the space. During the discussion we talk about the original design of the internet, how it has opened up a Pandora’s box of overlapping sovereignties, and the role of code in regulation and its implications for democracy. Listen here. OTNS: Scaling Collective Action for Millions of People October 1, 2023 In this episode we spoke to the co-founder of DAO Stack now working on Common, Matan Field who joined us at Zuzalu. During the discussion, we talk about the need for scaling collective action, using fractal organization, and moving beyond economically based interdependence. Listen here. OTNS: Transitioning ReFi DAO to a Coordi-Nation October 22, 2023 In this episode we spoke to Monty Merlin Bryant, a co-founder of ReFi DAO and environmentalist to discuss the movement behind ReFi or Regenerative Finance. ICYMI, ReFi DAO had previously started to declare itself a network state but has since learning more about coordi-nations, have shifted course towards our conceptual framework instead. We discuss what that process has been like and how ReFi DAO hopes to use the affordances of crypto to build a non-state force for aligning people and the planet. Listen here. OTNS: Prophets are dangerous and Capital doesn’t care about your feelings November 6, 2023 In this episode, we spoke to Wassim Alsindi, founder of MIT’s blockchain journal and the 0xSalon research collective based in Trust in Berlin. During the discussion, we spoke about the concepts explored in his pieces Prophet Motives & Knightwork States and Necroprimitivism Rising. Wassim makes interesting connections between, the Crusades, the zero-sum mentality of network states, and capitalism’s capturing of time. Listen here. OTNS: Is Praxis a bunch of fascists dressed as libertarians? January 7, 2024 In this episode of OTNS, we spoke to Ali Breland, a journalist at Mother Jones who has written on crypto and politics, about his recent publication about the links between Praxis and far right figures. We spoke about his experience of going to a Praxis-sponsored party in NYC, his interviews with ex-employees about the fascist sympathies of the founder Dryden Brown, and how they try to seduce ” cool kids” to join them. We also try applying for citizenship! Listen here. [...]
Blockchain Constitutionalism / News / Publications / ReportsJanuary 25, 2024
Interim Report on Blockchain GovernanceInterim Report on Blockchain Governance Practices Download the report here. As decentralized technologies such as blockchain rapidly evolve, establishing effective governance models is crucial to guide stakeholders towards a sustainable and equitable digital future. To enhance understanding and promote responsible practices in this landscape, Project Liberty Institute and BlockchainGov have embarked on a multi stakeholder governance initiative on good governance for a responsible decentralized technological ecosystem. The first intermediary report compares for the first time governance mechanisms and dynamics across 11 major blockchain networks. Using an interdisciplinary and comparative approach, the report explores prominent blockchain systems including Avalanche, Bitcoin, Cardano, Cosmos, Ethereum, Filecoin, Optimism, Polygon, Polkadot, Tezos, and Zcash. It examines these networks through a multidimensional governance taxonomy, collecting data through desk research and in-depth interviews with key stakeholders. The Multi Stakeholder Council set up by Project Liberty and BlockchainGov for this Initiative has been instrumental in guiding the development of this report. The analysis has uncovered six key findings related to the legal entities created to support blockchain networks, power distribution across governance areas and stakeholder groups, decentralization objectives and challenges, the interplay of on-chain code and off-chain practices in governance formalization, predominant decision-making mechanisms, and processes for handling security breaches. The intermediary report highlights that while blockchain networks are technically decentralized across nodes, their governance involves multiple layers. Hence determining influence requires scrutinizing the types of decisions being made, the stakeholders involved, and the specific mechanisms utilized. This understanding enables designing inclusive governance aligned with community values. The report also analyzes how governance comprises both on-chain protocol rules and off-chain social practices. The key findings of this report will guide the formulation of good governance recommendations providing pragmatic guidance to stakeholders and the overall ecosystem of blockchain and decentralized technologies. This pioneering comparison marks a milestone to advance the good governance of blockchain and decentralized technologies. Project Liberty Institute and BlockchainGov, together with the members of the Initiative’s Governance Multi Stakeholder Council, will now, based on the findings of this comparative study, work on distilling recommendations for the forthcoming Manual on Best Practices for Blockchain and Decentralized Technologies, scheduled for release in April 2024. [...]
Articles / Polycentrism / PublicationsJanuary 8, 2024
Adaptive Governance for Blockchain NetworksAdaptive Governance for Blockchain Networks Esen Esener This research investigates adaptive governance for blockchain networks within the context of legal resilience by looking at the current regulatory trends in two major jurisdictions, the European Union and the United States. The paper explores the current stance of blockchain networks and regulations, and explains why alegality of blockchain networks is no longer a justifiable argument. It also finds that the current regulatory environment is not suitable for blockchain network compliance due to their properties, presenting an existential threat and fear of legal claims which may lead to full banning, criminal charges or a loss of user base. In order to address the threat, this research suggests that blockchain networks should develop legal resilience within their governance mechanisms. Later, the research investigates the theory of adaptive governance for the purpose of assessing its applicability to blockchain networks with the aim of helping them adapt to regulatory changes while staying decentralized. Lastly the paper makes seven recommendations to blockchain networks to consider for their governance and policies. [...]
Publications / ReportsJanuary 5, 2024
ERC Scientific Report – 18 Months18 Months of ERC Grant - Bits from the Scientific Report In 2023, BlokchainGov completed the first half of the three-year-long ERC grant. We were requested to report the achievements and goals of our project so far. We took the chance to reflect and look back at 1.5 years of experimentation and research in the space. This exercise was useful to summarize and recap the progress we made and the challenges we encountered in this time. We desire to share some bits from the Scientific Report to mark this moment in time. Advancements in Blockchain Governance Research What kind of progresses we made in our research? How did our findings influenced the premises and the methodologies of our research? Unveiling Trust in Blockchain Systems:Beyond conventional trustless technology perceptions, our research exposes the persistence of trust in blockchain systems. This profound insight challenges existing notions and explores how trust can be leveraged to enhance governance structures. Understanding Challenges in Distributed Governance:Challenging assumptions in early distributed governance literature, our research delves into the challenges faced by collaborative organizations. Apathy, technical constraints, and uneven participation emerge as critical issues that require proactive addressing for effective governance. Tacit Governance Practices Revealed:Incorporating innovative ethnographic methods, including the telescope bot, our research uncovers the tacit and invisible governance practices underpinning many blockchain systems. This in-depth understanding enhances our knowledge of the intricacies involved in governing blockchain networks. Token-Bound NFT License:Addressing critical issues in the NFT space, our research introduces the Token-Bound NFT License. This novel copyright license empowers NFT owners with comprehensive rights over associated creative works, tackling the separation of NFTs from the underlying content. Pioneering New Network Sovereignties:Our project challenges traditional paradigms of Network States by proposing New Network Sovereignties. Based on commons-based principles, these non-state actors represent a new model for post-Westphalian global governance, sparking a reevaluation of international relations. Alegality Paradigms :Alegal paradigms, a key focus of our research, redefine governance in the context of blockchain systems by navigating the space beyond conventional legality. In this innovative approach, actions within decentralized networks, such as smart contracts and DAOs, exist in regulatory gray areas, neither explicitly legal nor illegal. Alegal governance recognizes the unique features of blockchain, prompting a reassessment of regulatory frameworks. It advocates for a balanced approach that preserves the trust mechanisms inherent in decentralized systems while acknowledging the need for regulatory adaptation. This concept challenges traditional legal norms, paving the way for a governance paradigm that embraces the distinctive characteristics of blockchain technologies on a global scale. Off Chain Constituzionalization:Recognizing the importance of off-chain constitutions for blockchain governance, we aim to challenge the prevailing focus on designing trustless systems and solve governance issues. Societal Impacts and Global OutreachBlockhainGov’s work aims to impact the current blockchain landscape and to shape the evolution of both the technology and the culture surrounding it. Here are some of the ways in which we try to propagate our research in the space. Timely and Impactful Regulation. The case of DAO Model Law:Our work on the DAO Model Law significantly contributes to global discussions on DAO regulation. Striking a balance between public policy concerns and the unique features of blockchain systems, our approach influences legislative developments and broader public engagement with DAOs.Token-Bound NFT License and Regulatory Innovation:The aforementioned Token-Bound NFT License introduces a novel legal framework addressing copyright and ownership concerns in the NFT space. This innovation has the potential to reshape how NFT artists license their works and navigate legal considerations.Public Awareness Initiatives:Our team actively engages in initiatives to raise public awareness about blockchain governance and New Network Sovereignties. Through op-eds, blogs, and a podcast series (Overthrowing the Network State), we provide a nuanced perspective accessible to a broad audience.Co-Design for Improved Governance:Our research outcomes extend beyond academia, offering practical solutions and recommendations for industry practitioners. By collaborating and receiving feedback from industry stakeholders, we ensure that our work contributes to improving governance practices in the broader community. [...]
Blockchain Constitutionalism / Conference Organizations / News / Polycentrism / ReportsOctober 26, 2023
Research Report – Blockchain Constitutionalism: The Role Of Legitimacy In Polycentric SystemsResearch Report - Blockchain Constitutionalism: The Role Of Legitimacy In Polycentric Systems Primavera de Filippi, Morshed Mannan, Kelsie Nabben, Jamilya Kamalova, Sofia Cossar, Tara Merk, Silke Noa, Marco Crepaldi, Joshua Dávila. Between 5 and 7 June 2023, BlockchainGov organized a conference on “Blockchain Constitutionalism: The Role of Legitimacy in Polycentric Systems” at the Robert Schuman Centre for Advanced Studies, European University Institute in Florence, Italy. Blockchain networks and Decentralized Autonomous Organizations (DAOs) have seen a surge in adoption in recent years. To fulfill their promise of widespread structural innovation and change meaningfully, they require governance that maintains legitimacy for internal and external stakeholders. As permissionless, globe-spanning technologies with significant effects on the general public, there has been a growing interest in viewing these blockchain-based systems in constitutional terms. Early analysis regarded the rules expressed through software code as a form of ‘on-chain constitution.’ At the same time, more recently, these have been supplemented with written documents that articulate additional rules and principles regarding the governance of the blockchain-based system (‘off-chain constitutions’). The common thread among the various examples of blockchain “constitutions” seems to be that they define aspects of a system’s decision-making process and make them relatively difficult to change. However, both blockchain practitioners and legal scholars do not agree on whether we should consider these as ‘constitutions’ or ‘constitutionalization’ processes in a strict sense, nor to what extent these efforts can render blockchain systems more legitimate. The EUI Conference brought together experts, academics, and practitioners to explore this intersection. You can read the full report here. [...]
Blog postsOctober 26, 2023
Blog Posts 2022-2023Blog Posts 2022-2023 Our researchers’ network is publishing its work not only in academic journals but all around the Web. Here you can find a list of the most relevant blog posts from the last two years · 2023:· Lotti, L., Houde, N., Merk, T. (2033) “Web3 Work research report: The DAO contributor’s perspective” in Other Internet Substack.· De Filippi, P., Schingler, J.K, (2023) “Coordi-nations: a new institutional structure for Global Cooperation” in the Berkman-Klein Center blog, at Harvard.· Hubbard, S., Merk, T., Douglas, T. (2023) “DAO Harvard Event Recap” in Harvard Belfer Center Blog.· Lotti, L., Houde, N., Merk, T. (2033) “Making DAOs Work” in Other Internet Substack.· Merk, T., Lotti, L., Houde, N. (2023) “Introducing Web3 Work” in Other Internet Substack.· Merk, T. (2023) “Rewards Systems Galore: a gateway drug to fundamental discussions” in The DAOist Blog.· Merk, T. (2023) “Wild, wilder, what? – a structured way to exploring your wildest ideas in DAOs” in The DAOist Blog.· 2022:· De Filippi, P. (2022) “Blockchain technology as a means to create Virtual Property in the Metaverse” in OECD Forum Network.· Balazs, Bodo, De Filippi, P. (2022) “’Trust in Context: The Impact of Regulation on Blockchain and DeFi” in Oxford Business Law Blog (OBLB)· Merk, T., & Mam, J. (2022). “Introducing the DADA Exit to Community” in Dada.art. · Merk, T., Rennie, E., Miller, L. (2022) “Introduction and Documentation of the Telescope Bot” in The Metagovernance Project [...]
Conference Organizations / Events / PolycentrismSeptember 26, 2023
DAO Harvard 2023DAO Harvard 2023 DAO Harvard took place on April 2-4, 2023 bringing together policymakers, blockchain experts and scholars to discuss and explore different aspects of Decentralized Autonomous Organizations. The conference was co-organized by Blockchain Gov alongside Harvard Kennedy School, Belfer Center, and the Safra Center for Ethics,as well as Metagov, COALA, and the DAO Research Collective. The event was organized in different tracks – Research Summit, Law Summit, and Summit on Equitable Ownership and Governance in the Online Economy.The Law SummitThe Law Summit at DAO Harvard featured multiple working groups focused on legal aspects of DAOs. They discussed topics like incorporation benefits, liability, taxation, legal pathways, and regulatory compliance standards. BlockchainGov and COALA co-organized the event, building on the COALA DAO Model Law. This model law offers guidelines for regulatory frameworks to provide legal clarity for DAOs while considering their unique characteristics. This approach has gained momentum, as seen in the passage of the Utah DAO Bill. Each group included legal experts, academics, and practitioners, and their insights will contribute to a revised COALA DAO Model Law (V2)On CostitutionalismIn the latter, Primavera De Filippi discussed the relationship between blockchains and constitutions, highlighting that decentralized technology doesn’t necessarily equate to decentralized power. Decentralization isn’t inherent; it must be intentionally designed, and it’s not always without costs. Blockchain systems incorporate both formal (on-chain protocols and smart contracts) and informal (off-chain rules) constitutions.Our friends at Belfer Center compiled a complete report at this link. [...]
Conference Organizations / EventsSeptember 11, 2023
Conference Organizations Update 2022-23Conference Organizations Update 2022-23 We organized conferences, seminars and workshops as part of our research activity all over the world. Conferences 2023: Organizer of the conference on “Blockchain Constitutionalism: the Role of Legitimacy in Polycentric Systems” at European University Institute, 6-7 June 2023 Organizer of the Conference “Overthrowing the Network States with Coordi-Nations“ organized in collaboration with Zuzalu. Lustica Bay, Montenegro. May 16-18 2023 Co-organiser of the DAO Harvard Conference, organized in collaboration with the Harvard Kennedy School, Belfer Center, and the Safra Center for Ethics, as well as Metagov, COALA, and the DAO Research Collective. Harvard University. April 2-3-4, 2023. 2022: Co-organiser of the conference “What’s Governing Web3? Advancing research on blockchain-enabled Web3 governance” organized in collaboration with RMIT at Melbourne University. 12-15 December 2022. Melbourne, Australia“ 2021: Co-organiser of the conference “La blockchain : enjeux juridiques, économiques, de sécurité et de coûts énergétiques” organised by CERSA and LITEM, in collaboration with CREIS-Terminal. 26 March 2021 (online). Promoter and co-organiser of the conference “Blockchain, Imaginaires religieux et Théologie”, organized by le Collège des Bernardins. March 17 & 31, 2021 (online) Workshops 2023: Organizer of a workshop on “Blockchain Constitutionalism: the Role of Legitimacy in Polycentric Systems” at European University Institute, 5 June 2023 Co-organizer of “The Emergence of Platform Cooperatives. Values, Governance and Design” in collaboration with Scuola Normale Superiore. Florence, 16 May 2023. Organizer of the “Overthrowing the Network State with Coordi-Nations” in collaboration with Zuzalu. Lustica Bay, Montenegro, 9-13 May 2023. Organizer of the 9th Meeting of European Research Council BlockchainGov Project, March 6th, 2023, CERSA – Paris, France 2022: Co-organiser of “What’s Governing Web3? Internal workshop” organized in collaboration with RMIT. 16-19 December. Paradise Trust, New Zealand. Organizer of the 9th Meeting of European Research Council BlockchainGov Project, Oct 14-15-16, 2022, CERSA – Paris, France Organiser of the Extitutions & Blockchain / Web3 Research Workshop. 13-16 September 2022. Berkman-Klein Center at Harvard Law School. Organizer of the ERC BlockchainGov Public Workshop. Sept 11, 2022. CERSA, Paris, France. Organizer of the 8th Meeting of European Research Council BlockchainGov Project, Sept 10, 2022, CERSA – Paris, France Co-Organizer of the Stanford DAO Workshop during the Science of Blockchain Conference. Sept 1 2022. Frances C. Arrillaga Alumni Center at Stanford University, Palo Alto, USA. Co-Organizer of the Open Questions in DAO Science Workshop during the Researching Web3 Workshop, organized in collaboration with SCRF. July 13-14 2022. Online. Organizer of the 7th Meeting of European Research Council BlockchainGov Project, July 18, 2022, CERSA – Paris, France Co-organiser of the COALA Blockchain Workshop, organized in collaboration with the European Crypto-Initiative (EUCI) and the BlockchainGov project of the European Research Council (ERC). July 17-18 2022. Paris. France. Organizer of the 6th Meeting of European Research Council BlockchainGov Project, May 31, 2022, CERSA – Paris, France Organizer of BlockchainGov Research Workshop: Legitimacy, Confidence and Trust in Blockchain Governance. European University Institute. May 17 2022. Florence, Italy Organizer of the 5th Meeting of European Research Council BlockchainGov Project, May 2, 2022, CERSA – Paris, France Co-organizer of the Open Problems in DAO Science Workshop, organized in collaboration with the Metagovernance Project, the European Crypto-Initiative (EUCI), the Smart Contracts Research Forum (SCRF) and the DAO Research Collective. April 18, at Tobacco Theater, Amsterdam, The Netherlands. Co-organiser of the COALA Blockchain Workshop, organized in collaboration with the European Crypto-Initiative (EUCI) and the BlockchainGov project of the European Research Council (ERC). April 19-20, at Creative Point, Amsterdam, The Netherlands. Organizer of the 4th Meeting of European Research Council BlockchainGov Project, March 28, 2022, CERSA – Paris, France Organizer of the 3rd Meeting of European Research Council BlockchainGov Project, February 28, 2022, CERSA – Paris, France Organizer of the 2nd Meeting of European Research Council BlockchainGov Project, January 31, 2022, CERSA – Paris, France [...]
Articles / Books / News / PublicationsSeptember 11, 2023
September 2023 Papers UpdateSeptember 2023 Papers Update Our team has been keeping busy with a variety of research projects, focus groups, and initiatives, analyzing from different perspectives the evolution of the blockchain space! It’s been a while since we last updated our website with these exciting developments, so we wanted to share some of the latest happenings with you. Here you can find the list of our most recent papers and book chapters. Papers Von Blomberg, M., Reijers, W. (2023) “Who Deserves Credit? Banks for the Virtuous in Rural China” in Journal of Contemporary China. Taylor & Francis. Bühler, M.M.; Calzada, I.; Cane, I.; Jelinek, T.; Kapoor, A.; Mannan, M.; Mehta, S.; Mookerje, V.; Nübel, K.; Pentland, A.; Scholz, T.; Siddharth, D.; Tait, J.; Vaitla, B.; Zhu, J. (2023) “Unlocking the Power of Digital Commons: Data Cooperatives as a Pathway for Data Sovereign, Innovative and Equitable Digital Communities”. Digital 2023, 3, 146–171. https://doi.org/10.3390/digital3030011 Merk, T., Tan, J., Hubbard, S., Oak, E. (2023) “Open Problems in DAOs”, website publication (and under process for submission) De Filippi, P., Santolini, M. (2023) “Extitutional Theory: Modeling Structured Social Dynamics Beyond Institutions” in Ephemera: Theory in Politics and Organisation Mannan, M., Pek, S. & Scholz, T. (2023) “Platform Cooperatives and Poverty Eradication: Building on the Legacy of Johnston Birchall”, in Journal of Entrepreneurial & Organizational Diversity (accepted, forthcoming) Mannan, M. & Pek, S. (2023) “Platform Cooperatives and the Dilemmas of Labor-Member Participation”, in New Technology, Work and Employment. https://doi.org/10.1111/ntwe.12273. De Filippi, P., Enguehard, C., Fayon, D., Gagnebien, A., Vidal, G. (2023) “Quelques enjeux de sécurité, juridiques, économiques, et énergétiques des blockchains” in Terminal. https://doi.org/10.4000/terminal.8995 Special Issues De Filippi, P., Enguehard C., Fayon D., Gagnebien A., Vidal G. (eds) (2023) special edition on “Blockchains : enjeux de sécurité, juridiques, économiques, et coûts énergétiques” for Terminal. [...]
NewsMay 8, 2023
Compliant Book-Keeping for DAOs through “Proof of Trusted Origin:” A Technical GuideCompliant Book-Keeping for DAOs through “Proof of Trusted Origin:” A Technical Guide Isaac Patka, Sofia Cossar, Eric Alston, Primavera De Filippi, Frederick Dudley, Fatemeh Fannizadeh, Jake Hartnell, Rolf Hoefer, Aaron Lane, Will Papper, Joshua Tan, & Michael Zargham The ProblemAs novel organizational and socio-technical architectures, Decentralized Autonomous Organizations (DAOs) continue proliferating. Even after a somewhat turbulent 2022 for the blockchain industry, recent reports show that DAOs have continued growing exponentially in resources and membership. DAOs treasuries hold approximately USD 25 billion, and 6.7 million token holders manage governance. While DAOs’ underlying purpose or activity vary widely, they all share at least one thing: reliance on “human contributions” for development and maintenance. Even those conducting the bulk of their operations on-chain require, from time to time, software developers to write code and deploy smart contracts and moderators to manage communication platforms for the community. In exchange for their efforts, DAOs may offer contributors token-based compensation or retroactive public goods funding. For example, they can allocate up to 50% of their treasuries to Product & Development expenses. However, transactions on permissionless and public blockchain networks are, by default, transparent. While transparency contributes to greater auditability, this technical feature can erode contributors’ right to payment privacy, recognized in most countries as a fair labor practice. It is now possible to conduct private transactions in blockchain systems by relying on privacy-preserving networks such as Z-Cash or Monero or resorting to privacy pools in tumblers such as TornadoCash. Yet, DAOs and their contributors may want to ensure that the privacy-preserving tool of their choosing exposes them only to “trusted” entities by avoiding transactions with entities involved in fraudulent or malicious activities. The QuestionHow can DAOs compensate their contributors in a privacy-preserving way while ensuring they only interact with “trusted” entities? The Solution We propose “Proof of Trusted Origin” and “Compliant Book-keeping” as mechanisms to ensure DAOs can compensate their contributors while respecting their right to payment privacy and shielding them against interactions with fraudulent or malicious entities. This technological solution relies on privacy pools and cryptographic proofs called “notes.” While Monero and Z-Cash are examples of privacy-preserving cryptocurrencies, token mixers or tumblers operate higher up in the tech stack. They are decentralized platforms designed with the intent to conceal or obfuscate users’ transaction history. They do so by mixing users’ deposited funds into a common pool and allowing users to withdraw amounts into a new wallet address. As a result, third parties cannot specifically link a deposit address with a withdrawal address. Tornado Cash, launched in 2019, is an example of a decentralized, non-custodial token tumbler running on any network compatible with the Ethereum Virtual Machine.To understand how end users would interact with Tornado Cash before the publicly hosted website was taken down in 2022, one must split the workflow described in the whitepaper into three instances: deposit, wait, and withdrawal. Deposit: To deposit funds, end users navigate the website and select Ether or an ERC-20 token and the amount they want to send from a set of pre-established possible amounts. The website also provides a random key or a random 256-bit number (a “deposit note”) that can be downloaded in .txt format as a backup. That “note” serves as proof of the “anonymity set” the end user’s transaction belonged to. An “anonymity set” is a batch of transactions waiting for withdrawal in the Tornado Cash smart contract denominated in the same token and for the same amount as the end user’s withdrawal request (e.g., 1 ETH). The end user then pays a gas fee and sends the deposit transaction to the Tornado Cash smart contract address on the Ethereum network alongside a hash of the generated “note.”Wait: After depositing, end users are recommended to wait a certain period of time before withdrawing their funds to reduce the chance that a third party might link the end users’ deposit and withdrawal transactions. While there is no fixed required waiting time, developers originally recommended waiting at least 24 hours. In practice, the waiting time is determined by the recent transaction volume in the smart contract, as well as the size of the anonymity set more generally, both of which influence the extent to which a given payment out of the smart contract can be probabilistically linked to a given original payment into the pool. Withdrawal: To withdraw funds, end users go back to the Tornado Cash website and select the same token and amount they originally deposited. They must also select between two withdrawal methods: a wallet or a relayer. When choosing a wallet, the end user adds a recipient address that is untraceable and unlinkable to any prior transaction history yet with sufficient ETH to cover the gas fee. Adding ETH to the withdrawal address creates a “chicken and egg dilemma” and can compromise anonymity; thus, end users might opt for a relayer. If so, users do not need to pre-fund the withdrawal account and instead pay a fee to the relayer to process the withdrawal on their behalf, enhancing privacy as a result. Another piece of data users must submit is linked to the original “deposit note.” In simple terms, the “deposit note” becomes split into two halves, one acting as a “secret” and the other acting as a “lock.” When the end user sends the withdrawal request to the Tornado Cash smart contract, they also provide a hash of the “lock” and a zero-knowledge proof (zkp) generated using both the “secret” and the “lock.” This zkp proves the withdrawal is linked to a valid deposit and that the deposit has not been spent yet. After verifying the proof, the smart contract sends the funds to the recipient’s address. On 7 March 2023, Privacy Pools, a fork of Tornado Cash, was launched on Optimism testnet, an Ethereum layer 2 scaling solution. Currently in development, Privacy Pools is an open-source project succeeding Tornado Cash which allows users to make privacy-preserving transactions while proving that the funds have not been connected to fraudulent or malicious entities. The workflow remains the same in the deposit and waiting instances periods. Yet, when end users send a withdrawal request to the smart contract, they not only provide a zkp to prove that the withdrawal is linked to a valid and unspent deposit. They can also provide another zkp to prove that a withdrawal is linked to a deposit that is part of a subset of good deposits (“proof of inclusion”) or not part of a subset of bad deposits (“proof of exclusion.”) In contrast to the original Tornado Cash, end users of Privacy Pools can now remove themselves from anonymity sets found to be associated with these activities. The Implementation DAOs and their contributors can utilize Privacy Pools to generate Proof of Trusted Origin, ensuring privacy-preserving compensations originating from trusted entities only. Deposit: The DAO decides to use Privacy Pools smart contract to pay for compensations to contributors. It chooses to deposit in one of the accepted tokens and for one of the pre-established amounts. The DAO downloads the generated “deposit note” in .txt format. For the deposit to be made, it pays the corresponding gas fee, and it sends the deposit transaction alongside the hash of the generated “deposit note.” Right after, the DAO securely delivers the “deposit note” to the corresponding contributor expecting the compensation. Wait: The contributor waits at least 24 hours to redeem their deposit. That waiting period is to reduce the correlation between deposits & withdrawals and may require longer in cases of low transaction volume. Withdraw: The contributor decides to withdraw the deposit made by the DAO through the Privacy Pools smart contract. When sending a withdrawal request, the contributor utilizes the “deposit note” to create a zkp to prove that the withdrawal is linked to a valid and unspent deposit and that it is linked to either a subset of good deposits (“proof of inclusion”) or does not belong to a subset of bad deposits (“proof of exclusion”). While the aforementioned process could already be executed through the Privacy Pools open-source project, a “Proof of Trusted Origin” requires an additional step whereby the contributor can obtain a .txt statement of the generated “proof of inclusion” or “proof of exclusion.” This Proof can be utilized for the purposes of accounting and compliance with regulations of specific jurisdictions where the DAO is incorporated or operating and where the contributor is based. These proofs would be subject to standard accounting practices for organizational recordkeeping. The interested organization or individual could maintain private records of contributors, payments, and proofs of trusted origin to ensure tax compliance or other regulatory objectives. Additionally, because of the nature of compensation as a particular type of transaction, some aspects merit deeper consideration: If compensation ought to be paid at a specific moment or within a certain timeframe, the DAO must consider the waiting period recommended to ensure the privacy of the transaction. DAOs and contributors may decide to denominate the compensation in stablecoins to avoid volatility risks associated with other tokens and cryptocurrencies, although this comes at the cost of accepting the counterparty risk of the stablecoin issuer. The receipt can be redeemed by anyone who holds it, including redeemed by the sender, before the intended recipient can claim it. Given this, the system outlined herein is best for ongoing and regular payments between relatively trusted parties, not trustless payments.ConclusionThe world of distributed network organizations is still rapidly developing alongside the underlying blockchain technology and smart contract affordances that form these organizations’ technical backbone. Essential to the flourishing of this novel organizational ecosystem are guarantees that traditional organizational contexts provide their employees, like privacy of payments as against third parties. While traditional organizations accord this level of privacy, they do not prevent duly authorized regulators from accessing these payment records as and where needed. This technical guide explains how decentralized autonomous organizations (DAOs) can use the technology stack provided by Privacy Pools to ensure compensation privacy while simultaneously proving that funds received did not emanate from an untrusted actor. This presents a compliant set of book-keeping practices for DAOs through using zero-knowledge proofs of trusted origin and a privacy network within the Ethereum network. Using this technology in the novel application that we describe, DAOs can obtain the same affordances available to private employers worldwide while ensuring regulatory compliance in the face of sanctioned uses of privacy pools. Thus, this technological stack will likely play an important role in fomenting legitimate and innovative employment arrangements within DAOs. However, the applications of this stack are not limited to payroll purposes. Technical Demo Appendix Privacy Pools Step 1: Visit Privacy Pools dApp https://www.privacypools.com Step 2: Connect both a Metamask wallet and a Note wallet Step 3: Deposit into the pool https://goerli-optimism.etherscan.io/tx/0x263ed21cf1019f8c7c3cf5b750c3e747fc7abed9d95fc758d9468d5d411f3d7bThis transaction shows Proof of Origin of funds going in. Step 5: Visit Withdraw pageStep 6: Optionally exclude certain deposits (e.g. if they are sanctioned) Step 7: Complete withdrawal to a new walletThis transaction shows funds being withdrawn to a different addresshttps://goerli-optimism.etherscan.io/tx/0x897e041bdf0937649cba5861d262120aaf017937afe70b77686eaf463ba6a835 ZKBobIn ZKBob, one can either publicly send the Bob token or privately send the ZKbob token. Both are USD-denominated stablecoins. ZKBob works differently, as there is no blacklist for sanctioned wallets currently. Instead, limits are imposed to reduce the tool’s utility for moving dirty money.Transaction history (only viewable to the logged-in user) Public transaction:https://polygonscan.com/tx/0x535edde6227f4405d791d1c6106a3deab46396e88b73e667f5760aed43e197d1 Private transaction (notice no ERC20 logs):https://polygonscan.com/tx/0x9f60fcc5917d5d7bcef1b25877baf982b3ca16ebc94fba0f641bdbd2d40650c4 [...]
Coordi-Nations / PodcastApril 28, 2023
OTNS: Critiques and Alternatives from a Former Professional LibertarianOTNS: Critiques and Alternatives from a Former Professional Libertarian OTNS: Critiques and Alternatives from a Former Professional LibertarianIn this episode, The Blockchain Socialist and Primavera De Filippi talked with Chris Berg a crypto economist and co-director at the RMIT Blockchain Innovation Hub. During the episode, Berg provided insightful criticisms of TNS from a libertarian angle, highlighting areas where he believes the concept falls short. He also discussed Balaji’s state envy, a concept that suggests individuals and organizations are striving to become more like nation-states, with their own territories, currencies, and governance systems.Listen to this episode and the previous ones on The Blockchain Socialist Website. [...]
Coordi-Nations / News / PodcastApril 21, 2023
OTNS: Institutional Design and Recognizing the Value of PoliticsOTNS: Institutional Design and Recognizing the Value of Politics Overthrowing the Network States: “Institutional Design and Recognizing the Value of Politics” with Jason PottsFor the first time of the series, Primavera de Filippi and The Blockchain Socialist welcome a fan of Balaji. Jason Potts is a professor of economics but also the co-director of the blockchain innovation hub of RMIT. We discussed his dissatisfaction with the book, the commons, and how productive forces are growing past market capitalism.You can listen to this episode on The Blockchain Socialist Website. [...]
NewsApril 21, 2023
The BlockchainGov Newsletter #3 | April 21st, 2023The BlockchainGov Newsletter #3 | April 21st, 2023 The latest edition of the BlockchainGov Newsletter is out!This edition covers a wide range of topics, such as the recent research papers published by BlockchainGov members, upcoming events, the various participation of all the researchers, and more. Read it here Don’t forget to subscribe not to miss the next ones. They will be published quarterly. Subscribe on LinkedIn! [...]
News / PodcastApril 4, 2023
OTNS: Maximum Freedom in Complex Social OrganizationsOTNS: Maximum Freedom in Complex Social Organizations New episode of Overthrowing The Network State (OTNS) online! This time, Primavera De Filippi and The Blockchain Socialist are joined by Eric Alston, a researcher at BlockScience and Scholar-in-Residence at the Leeds School of Business at the University of Colorado Boulder.Eric’s work focuses on the study of institutions, with particular emphasis on property, constitutions, and blockchains. During the interview, the conversation turns to the differences between formal and informal institutions, organizational complexity, and the challenges of maximum freedom. Eric’s insights provide a fresh and valuable perspective on these complex topics.If you’re interested in exploring the intricacies of institutions and organizational complexity, be sure to check out this episode of OTNS. You can find it, along with all previous episodes, on The Blockchain Socialist website!Listen to it below! [...]
Coordi-Nations / News / PodcastMarch 27, 2023
Overthrowing The Network State: How to Optimize for RealityOverthrowing The Network State: How to Optimize for Reality Overthrowing The Network State: “How to optimize for reality?” with Michael ZarghamWe are thrilled to announce the newest episode of Overthrowing The Network State (OTNS), featuring Michael Zargham, the CEO of Block Science. The Blockchain Socialist, Primavera De Filippi, and their guest continue their efforts to overthrow the ontological framework of network states from the perspective of complex systems engineering.During the discussion, they delve into the concept of how network states don’t optimize for reality and the importance of not confusing the map with the territory. Finally, they explore how an alternative to network states should handle infrastructures and the potential impact that this could have on our society.Michael Zargham brings a wealth of knowledge and experience, making for an insightful and thought-provoking conversation.Stay tuned for more episodes of OTNS!You can find the previous episodes and additional content on The Blockchain Socialist website. [...]
Coordi-Nations / News / PodcastMarch 13, 2023
Overthrowing The Network State: Dictatorship by Tech CEO with Nathan SchneiderOverthrowing The Network State: Dictatorship by Tech CEO with Nathan Schneider Overthrowing The Network State: Dictatorship by Tech CEO with Nathan SchneiderWe are excited to announce the 6th episode of Overthrowing The Network State (OTNS) featuring returning guest Nathan Schneider, who joins The Blockchain Socialist and Primavera de Filippi, to discuss his experience at ETH Denver and the limitations of using tech venture capital as a model for governance.In this episode, they explore new political possibilities and the importance of being intentional in the approach. They dive deep into the issues surrounding the use of venture capital as a governance model and the potential drawbacks that come with it.As part of our ongoing collaboration with The Blockchain Socialist, OTNS aims to critique The Network State by Balaji Srinivasan while highlighting the more significant concepts surrounding how these technologies could subvert state structures.Make sure to tune in for this insightful discussion with Nathan Schneider and stay tuned for more episodes of OTNS. You can find the previous episodes and additional content on The Blockchain Socialist website. [...]
Coordi-Nations / News / PodcastMarch 7, 2023
Overthrowing The Network State: Colonize the Memes, the Narratives, and the LandOverthrowing The Network State: Colonize the Memes, the Narratives, and the Land Overthrowing The Network State: Colonize the Memes, the Narratives, and the LandCheck out the latest episode of Overthrowing the Network State (OTNS)! In this episode, Primavera de Filippi and Morshed Mannan joined The Blockchain Socialist to speak with Raymond Craib, a historian of modern Latin America and author of Adventure Capitalism: A History of Libertarian Exit, from the Era of Decolonization to the Digital Age. They delve into the neocolonialism inherent in network states, previous attempts at utopian libertarian exits, the colonization of history, and the concept of Praxis Society.You can listen to the podcast on the player below, and find all the other episodes on The Blockchain Socialist Website! [...]
Coordi-Nations / News / PodcastFebruary 28, 2023
Overthrowing The Network State: Untangling Balaji’s Helical Theory of HistoryOverthrowing The Network State: Untangling Balaji’s Helical Theory of History Overthrowing The Network State: Untangling Balaji’s Helical Theory of HistoryBe sure not to miss the latest Overthrowing the Network State (OTNS) episode! Technology historian Quinn DuPont joins the Blockchain Socialist and Keslie Nabben to discuss his recent critiques of TNS at the Commons Stack Unconference and his article on A Progressive Web3. Together, they delve into Balaji’s misinterpretations of history and suggest the commons as an alternative framework to what is already occurring in certain aspects of web3. Check out this episode, along with previous ones, by clicking here! [...]
Coordi-Nations / NewsFebruary 13, 2023
Overthrowing The Network State: Survival of the Richest with Douglas RushkoffOverthrowing The Network State: Survival of the Richest with Douglas Rushkoff The third Episode of “Overthrowing the Network State” with Douglas Rushkoff has been published!We are excited to announce that the third episode of the “Overthrowing the Network State” podcast series is out now! In this episode, Primavera De Filippi and The Blockchain Socialist welcome Douglas Rushkoff, a renowned writer, and documentarian who studies human autonomy in the digital age. Rushkoff, named one of the “world’s ten most influential intellectuals” by MIT, joins the conversation to discuss “The Network State” by Balaji Srinivasan.Click here to listen to the podcast!Missed the previous episodes? No problem! You can find them all on The Blockchain Socialist website as well! [...]
News / PodcastFebruary 7, 2023
Overthrowing The Network State: Forming New Publics and Pluralism with Glen WeylOverthrowing The Network State: Forming New Publics and Pluralism with Glen Weyl Exploring Alternatives: The Second Episode of Overthrowing The Network State is Here!We’re thrilled to announce the release of the second episode of the podcast series “Overthrowing The Network State“. In this episode, Primavera de Filippi and The Blockchain Socialist welcome Glen Weyl, the founder of RadicalxChange and co-author of Vitalik Buterin’s article on Decentralized Society.In the first episode of #OTNS, they introduced Balaji Srinivasan’s book “The Network State” and shared our initial criticisms and alternatives. This time, they delve deeper into the oversimplifications in the book and explore Glen’s alternative vision for a networked society.If you haven’t already, check out the first episode of OTNS. Now, tune in to the second episode of ONTS and discover more about these topics! [...]
Coordi-Nations / News / PodcastJanuary 29, 2023
Overthrowing The Network State: An Initial Critique and AlternativesOverthrowing The Network State: An Initial Critique and Alternatives The first episode podcast series “Overthrowing The Network State” has finally been released. Hosted by The Blockchain Socialist and Primavera de Filippi, this series takes a deep dive into the world of Balaji Srinivasan’s latest book, “Overthrowing The Network State“. In this first episode, Primavera and The Blockchain Socialist provide a quick overview of Balaji Srinivasan and some of his book’s key concepts while sharing their initial objections and criticisms. This podcast series aims not just to offer critique but also to provide a distinct conceptual framework for understanding why some readers might find the book appealing.Listen to the first episode of « Overthrowing The Network State » by clicking here! [...]
News / researchDecember 13, 2022
Report on blockchain technology & legitimacyReport on blockchain technology & legitimacy Dr. Primavera De Filippi, Dr. Morshed Mannan, Jack Henderson, Tara Merk, Sofia Cossar, Kelsie Nabben This report synthesizes the insights explored within the ERC BlockchainGov reading group on “Legitimacy in Blockchain,” taking place bi-weekly from July 2021 until June 2022. The report investigates the role of legitimacy in blockchain systems from descriptive, conceptual, and normative perspectives. It summarizes the discussions and provides recommendations concerning the role of legitimacy in blockchain systems drawing from the talks held by the reading group. The organizers of the reading group are part of several initiatives, including a five-year-long (2021-2026), EU-funded (ERC grant of €2M) on ‘Blockchain Gov’ at the CNRS (France)/EUI (Italy), a Future Fellowship project funded by the Australian Research Council on ‘Cooperation through Code’ at RMIT (Australia) and the Coalition of Automated Legal Applications (COALA). The “Legitimacy in Blockchain” report is one of a series that includes the “Blockchain Technology, Trust, and Confidence” report (De Filippi et al., 2022) and “Blockchain Technology & Polycentric Governance” report (De Filippi et al., forthcoming). RSC_REPORT_08_12_2Download [...]
News / researchDecember 13, 2022
Blockchain Technology, Trust & ConfidenceBlockchain Technology, Trust & Confidence Primavera de Filippi, Morshed Mannan, Wessel Reijers, Paula Berman, Jack Henderson Reinterpreting Trust in a Trustless system? ABSTRACT This report provides an in-depth analysis of the theoretical foundations of the concepts of trust and confidence and their correlation to the notions of risk, agency and legitimacy. These theoretical underpinnings are thereafter applied to permissionless blockchains, in order to identify how the foundational nature of the technology lends itself to bridging traditional paradigms in generating greater trust and confidence amongst users. We first review the literature which distinguishes the concept of trustfrom confidence before turning to major scholarly contributions on interpersonal trust, system trust and trust in technology. This literature has been examined through the lens of a multi-disciplinary readinggroup, which subsequently brings to bear practical and philosophical considerations in the use of blockchain technology in the modern world. The report concludes by providing the key areas in which trust can be reinforced, identifies the limitations of traditional factors as a measure for building trust with a decentralised and pseudonymous environment and clearly defines the differing levels of trust and confidence which are required within an on-chain and off-chain governance structure and its nexus to engendering legitimacy. HIIG_DP_2022-3_DE-FILIPPI-etal-1Download [...]

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