Report by Akin Sawyerr.
- dates: 01 July 2019 - 02 July 2019 (2 days)
- location: Wharton School of Business, San Francisco, USA
- event: Wharton Cryptogovernance Workshop (description and background PDF)
- Twitter: @kwerb
- visitors: 25
- attendees: @akinsawyerr
The event was held at the Wharton School of Business' San Francisco Location at 1 Harrison Street. Its right next to the San Francisco-Oakland Bay Bridge.
The event had a diverse audience that included governance experts from crypto communities and academia. This is the full list of attendants:
- Jacob Arluck (Tocqueville Group)
- Farzaneh Badiei (Internet Governance Project)
- Brian Behlendorf (Hyperledger)
- Chris Berg (RMIT)
- Nic Carter (Castle Island Ventures)
- Thomas Cox (Strongblock)
- Meltem Demirors (CoinShares)
- Charlie Firestone (Aspen Institute)
- Andre Geest (Organizer - UCL Centre of Blockchain Technologies)
- Andreas Glarner (MME)
- Jae Kwon (Tendermint)
- Tara Lemmey (LENS Ventures)
- John Light (Aragon One)
- Zaki Manian (Tendermint / Trusted IoT Alliance / Iqlusion)
- Gina Pieters (University of Chicago)
- Jack Platts (Web3 Foundation)
- Matt Prewitt (RadicalxChange Foundation)
- Carolyne Quinn (Corda Network)
- Daniel Resas (Organizer)
- Lane Rettig (Ethereum)
- Akin Sawyerr (Decred)
- Nina Siedler (DWF)
- Christian Sillaber (Organizer)
- Kate Sills (Agoric)
- Kevin Werbach (Organizer - Wharton School of Business)
- Nils Wernerfelt (Facebook)
The event took the format of a roundtable discussion with 2 small group breakout workshops on Day 1 and Day 2 respectively.
First day's conversations centered around:
- Governance Theory
- Blockchain Governance in Practice
- Perspectives on Blockchain Governance
- Working Group Discussions
We had lively conversations that set the tone for a very interactive event. Various definitions of governance were put forth and the conversations delved into Governance theory and attempted to reach some consensus around what Governance is.
A few key questions that emerged from the day were: Can one build scalable governance? Can governance be portable? Can governance be built that is not susceptible to plutocracy or some form of capture by the wealthy or powerful?
There was general agreement that every cryptonetwork has a governance system whether it thinks so or not. Networks that do not explicitly develop and seek to adhere to a self determined governance process will have one imposed on it.
We discussed wide ranging themes on how a governance structure determines the culture that emerges in networks and sets the trajectory of the community.
It was also determined and agreed to by some that it becomes increasingly harder to impose an explicit governance structure on a community that does not outline a process at its onset, once a system is captured, its very difficult to change governance course.
We spent quite a bit of time trying to define stakeholders. There was a camp that wanted an expansive definition that included all of society and others who wanted in to be more limited to individuals with skin in the game or at least a direct interest in the network (i.e. miners, contractors, token holders etc).
Decred occupied a good portion of airtime during the conversation about governance in practice. The conversation started with a well detailed summary of how the SegWit process went down in the Bitcoin community. This provided the opportunity to contrast Bitcoin and Decred which I and a number of other participants gladly jumped on.
Phrases like: "If Bitcoin has a clear and transparent governance process like Decred...." were used to highlight the value of an explicit and transparent process (Decred) vs an opaque process (Bitcoin).
We talked about the importance of skin in the game and transparency, delegated governance vs non-delegated systems, principal-agent problems etc.
To close out the day there was a spirited conversation on public blockchains as a public utility. Issues of social responsibility, unintended consequences, unaccounted for "stakeholders" were discussed.
The second day's conversations centered around:
- Refining and finalizing outputs from working group discussions
- Attempting to pull together a blockchain governance framework by reaching consensus on key issues
- Next steps the project should take to advance the state of understanding, and practice around blockchain governance
The group was divided into 5 breakout teams to discuss and flesh out the following:
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The context of blockchain governance: The Who? What? When? and Why?; How does blockchain governance differ in permissioned vs permissionless networks? How blockchain-based contexts differ from traditional software engineering, open source, or corporate governance?
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Measurement and Quality: What are the attributes of successful blockchain governance and how can success be measured?
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Governance of Blockchain Networks versus Governance leveraging Blockchain solutions: How blockchain systems are governed from how blockchains are employed as governance solutions for the world. How does the internal governance structure of a blockchain platform or community influence its effectiveness for managing resource allocations, asset registries, commercial ecosystems, etc.?
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Behavioral and Institutional dynamics: How can the insights of economics and related fields help to design decentralized ecosystems? What role do digital assets play in incentive schemes and how can they be linked to the overall network governance? What agency conflicts can arise in multiple protocol and/or stakeholder ecosystems and how can they be identified in the design process? What patterns do projects using token incentives share?
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The Governance Stack: Compose a first high-level draft of a blockchain governance outline to serve as a discussion basis for the whole-group session on the second day. Included not only identifying the relevant layers and other components which are likely to be shared by most projects, but also frame the discussion by highlighting specific focus areas worth assessment by the whole group.
Each group gave a 10 min report out of their conclusions. These reports can be found here: https://upenn.app.box.com/s/edbfabtdvz3n2kbtm8wwxk6ynknmotk6
The overall experience was eye opening, scary at times, and extremely validating. It was clear that governance was top of mind for all participants present.
It was intresting to see how little up front thought a number of projects had put into governance. It was also scary at the same time to see how vulnerable a number of multi-million and multi-billion market-cap networks are. A number are clearly in a state where they have been captured by powerful interests, and this stands as a major threat to the longevity of these networks.
The cohort of newer projects present all seemed to have or be in the process of rolling out on and off chain governance processes. A number of them made explicit references to Decred as an example they sought to emulate in principle.
I and a few others on a number of occasions had to interrupt proceedings to state that Decred actually had working governance processes that some in the group assumed did not exist in the wild. I walked away with an even stronger sense of the pioneering role Decred has in the cryptocommunity. We still have some time to go before the market catches up to understanding just how much has already been accomplished at Decred and the growth path our governance systems are on.
