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Right now is an incredibly exciting time for blockchain dispute res. We’re beginning to see real utility for dispute res tools, and these point the way for even more powerful models
I’ve had great convos about this recently, so capturing some thoughts in a thread:
I’ve had great convos about this recently, so capturing some thoughts in a thread:
1. The @Kleros/ @Omen_eth dispute res is the most visible example of useful dispute res to date, but only the beginning
As background, Kleros is being used to resolve an interpretation dispute on Omen, a prediction market platform
As background, Kleros is being used to resolve an interpretation dispute on Omen, a prediction market platform
The dispute was over what sources should be used to calculate daily deaths from COVID (grim, but very 2020). The list of permissible sources was not specified in the terms of the prediction market https://twitter.com/koeppelmann/status/1284247136784322571
Kleros’s dispute res process is working. Users from both sides of the dispute engaged in written and oral arguments, lobbied key project members, and the dispute has been successfully resolved pending appeal https://twitter.com/koeppelmann/status/1285734796552011776
This is validation of the underlying need for blockchain dispute res - it’s impossible to specify every outcome in transactional scripts - and points to a solution with product-market fit.
But...
But...
2. Blockchain dispute res is not “blockchain court”
It’s easy to characterize the Kleros dispute as a kind of blockchain court, but I think this is a simplistic model and misses what’s really going on https://twitter.com/jbrukh/status/1262767594920165377
It’s easy to characterize the Kleros dispute as a kind of blockchain court, but I think this is a simplistic model and misses what’s really going on https://twitter.com/jbrukh/status/1262767594920165377
Blockchain dispute res expand the kinds of decision-making available to DAOs, while taking advantage of what makes DAOs powerful in the first place. Let’s look at how this plays out in three types of DAOs:
A. Investment DAOs
$$ committed to and invested by projects like @TheLAOOfficial & @VENTURE_DAO is growing. Investing in speculative tech is always a demanding exercise in transaction and governance design, now add pseudonymous participation and novel code deference mechanisms
$$ committed to and invested by projects like @TheLAOOfficial & @VENTURE_DAO is growing. Investing in speculative tech is always a demanding exercise in transaction and governance design, now add pseudonymous participation and novel code deference mechanisms
The result is a real need for sophisticated dispute res tools - tools that incentivize cooperation, rather than just majority rules plus an exit right https://twitter.com/pet3rpan_/status/1264667281784635394
This is not a hypothetical need. Yesterday MetaCartel announced an investment in @joinrepublic NOTE, which is a security token designed by a very centralized non-DAO issuer, potentially being offered under Reg A
This raises fascinating governance questions, particularly from MetaCartel’s perspective, given and the complexities in connecting off-chain and on-chain orgs and that that this investment could create a centralizing influence https://twitter.com/VENTURE_DAO/status/1288540421413466112
B. DeFi DAOs
As DeFi continues insane growth, the largest projects are constructing DAOs to take over management of the core value or risk-transfer tools they provide
As DeFi continues insane growth, the largest projects are constructing DAOs to take over management of the core value or risk-transfer tools they provide
Yesterday @synthetix announced it’s replacing its governance foundation with 3 DAOs to manage protocol upgrades, ecosystem growth and dev grants. @Aaveaave announced a major initiative to transfer governance to token holders https://medium.com/aave/aavenomics-eeab650cccc2
These will need dispute res tools that allow participants to engage in long term planning - things like allocating budget and balancing competitions ecosystem needs - rather than the more limited tools that exist now
C. Creator Communities
Projects like @OurZora, @withFND & @tryrollhq are simplifying the relationship btwn creators and consumers. They’re enabling creators to participate in markets for their work, a process that currently faces lots of intermediation & conflicting incentives
Projects like @OurZora, @withFND & @tryrollhq are simplifying the relationship btwn creators and consumers. They’re enabling creators to participate in markets for their work, a process that currently faces lots of intermediation & conflicting incentives
As creators and consumers grow closer, they’ll form communities that generate significant value for both sides of the market. These communities will become a huge part of a creator’s worth, and consumers will benefit by being able to own parts of that community
This suggests a need for creators and consumers to both participate in governance over the community - moving from the old “creator sells to consumer” model to a new model where creators and consumers generate value side by side
4. I think @AragonProject Agreements and Aragon Court will be especially promising for all 3 of these governance models. These tools permit subjective agreements (relationships btwn members, or btwn members and the org) & enforcement of those agreements if they become contentious
Plus, they integrate directly into the infrastructure for creating and managing DAOs. Flexible governance with teeth
5. All of these governance activities are obviously possible using off-chain tools. But to capture the benefits of DAOs - automation, anonymity, decentralization - these tools need to be on-chain processes. This is where blockchain dispute res is headed
