the governance edition -- summer roundup part 2
The software movement around blockchains often called crypto or web3 has evolved models for democratic governance, interweaving civic and corporate governance traditions in a way that was previously impossible: Public goods and private incentives are entwined. Projects can be open source and for-profit. Customers are also owners.
web3 governance also has radically open participation and rapid execution. Not only is a new form of digital participation emerging — but it also features widespread experimentation and continuous, fast cycles of iteration. In other words: web3 is a new laboratory for governance. So what can we all learn from it?
Feature: What we can learn from the history and evolution of governance
Direct democracy sometimes leads to low participation and concerns about weak oversight, interest-group capture, and group decision-making. However, there’s room for borrowing best practices from the history of governance systems here. While web3 may be new, governance isn’t; these are the same governance challenges societies and organizations have experienced for millennia — spanning the cradles of the Athenian Ecclesia to the rise of the Dutch East India Company to the modern United States.
Tensions between competing imperatives — such as empowering experts vs. encouraging broad participation, creating open systems vs. capture of those systems by non-aligned actors — have always loomed large. What can we learn from this history, applying hard-learned lessons from democracy and corporate governance to build more effective political systems? In this piece, Andrew Hall (Stanford professor and our frequent collaborator) + Porter Smith (a16z crypto partner focused on governance) explore key challenges in decentralized governance… and offer a path to decentralized governance systems of the future.
📜📃 read more
▶️ 🖥 The Evolution of Governance, with Andy Hall
Resources & views: on designing governance, best practices, lessons learned
Massive, centralized web2 organizations have become the internet’s “accidental monarchs”, ruling our online lives with iron fists, argue Andy Hall and Porter Smith. But web3 governance — if built thoughtfully and in a way that reflects lessons from the history of governance — offers an embedded foundation of credible trust for building the next generation of platforms.
📝 📖 read more
Tracing innovations in governance through time, Porter Smith tracks the recent emergence of web3 governance through NFT communities, DAOs, and more in this recent talk on Designing Effective Governance from a16z Crypto Startup School 2023.
▶️🖥 watch here
How to encourage more participation in governance? Game theory has a lot to say about what’s possible and what’s not. In this contributed article, Ethan Bueno de Mesquita (University of Chicago) and Andy Hall observe that slashing or rewarding participants for voting with the majority can be prohibitively expensive. But there may be a way to actually pay voters for reporting how costly they find it to vote — and then pay the subset that finds it the least costly — to encourage more informed participation in decentralized governance.
📝 📖 read more
Applications: for decentralization in crypto, and beyond
Bringing decentralized governance to tech platforms
One of the main promises of web3 is helping platforms create governance systems in ways that people believe are fair and legitimate — while also getting more (and better) output from developers, creators, sellers, and other producers on a given platform. So in this talk originally delivered in our a16z crypto research seminar series, Stanford professor Andy Hall offers a political-economy perspective on the governance failures inherent in web2 platform structures. Hall also proposes ideas for how web2 platforms can use techniques from web3/ decentralized governance to address such problems, drawing on his experience working in social media.
▶️🖥 watch here
How the U.S. can rewire the Pentagon for a new era
Defense innovation has always sparked a helix of action and reaction — where faster evolution means greater success — but we are in an accelerated such moment today: As general computing platforms become applicable to a host of defense applications, sweeping advances in software and other technologies not originally designed for defense have unintentionally compounded computing’s impact on war. We are in the early stages of a generational defense cycle that requires unconventional thinking, new tools, and emerging tech. Responding to such a paradigm shift requires re-engineering U.S. defense DNA for a new era, observes Porter Smith (also former U.S. military).
The winner of the next big war will more closely resemble a distributed computer operating at scale: programmatically collecting, sharing, and acting upon data from relatively inexpensive and configurable endpoints (like drones). But computing design and organizational principles honed in the tech industry — particularly decentralized systems — can help provide guidance to meet the challenge.
📝 📖 read more
*July 4th special edition*
-- Sonal Chokshi, Tim Sullivan, and a16z crypto teams
You’re receiving this newsletter because you signed up for it on our websites, at an event, or elsewhere (you can opt out any time using the ‘unsubscribe’ link below). This newsletter is provided for informational purposes only, and should NOT be relied upon as legal, business, investment, or tax advice. Furthermore, the content is not directed at nor intended for use by any investors or prospective investors in any a16z funds. Please see a16z.com/disclosures for additional important details, including link to list of investments.