Welcome to Easter. [Music] Hello. Amazing. Up next we have Costanza with why Dows will never be truly decentralized. Thank you very much.
Thank you. Um so hi everyone. My name is Costansa and we will see why Dows are not decentralized and that's okay. So what are Dows? Everybody will say the centralized autonomous organizations but a few years ago at a conference um a friend gave me this amazing definition of Dows that is douchebags arguing online.
So we will see that why and if that's the case. Thank you. And how that happens. So before we start a little bit about me. Um I studied anthropology and law.
So basically um governance systems across cultures and times and that of course influences my research. I've been in crypto not full-time since 2018 full-time since 2020 and I made out proposals. I work with Dow. I consulted on Dow. I set up governance systems for Dow.
And all this time when people were talking like oh DA decentralized they are the future. I was like no because we have human beings and so this is what we will see now. So first of all are our feelings because a few years ago everybody was talking about Dows as the promise of the future and now like this is getting a little bit more slower. Um Dows are losing traction. So what's happening?
The main problem is that we put too many expectations on those and when you put too much expectations on something um that will inevitably disappoint you. So my goal here is to highlight why the current models are failing and what we can do to save them so that we can have better dows and more dows and most of all we can also have better experimentations. So why do we have dows? Um what is that a DAO can deliver? Well, first of all, today is democracies and institutions are dying.
Um they're in crisis. You can ask anyone, oh, do you believe in democracy? I'm pretty sure that the answer is going to be no. Um and this is because the incumbent institutions like democracies are prone to corruptions, inefficiencies and bureaucracies. So, I want to use a real example that happened to me um long before Dows were a thing.
It was 2013. I was in Egypt in Cairo. Um it was a very alive moment. It was right after the Arab Spring and my vis expired. My passport got stolen.
So, I had to spend a few days in the bureaucratic nightmare trying to understand how can I go back home? I want to go back home. Um, so I went to my vis extension appointment and I left all the paperwork to an officer and he told me to wait. So I waited. I waited.
I waited and then at the end of the day he was shutting everything down and I went to him and I asked him like, "Hey, what about my paperwork? Like I have a flight in two days and he was like, "I can't find your paperwork. I'm sorry. You appear not to be in the system. There's nothing I can do for you."
So I did the only reasonable thing I could do. So I started crying and thankfully um a senior officer saw me crying and had pity for me. So he brought me in the office, told someone, "Go find our paperwork, check every room, check every every corner." Um so they did it. 30 minutes later they came back with my paperwork.
They just fell off from the desk and I was out of the office with all my travel documents. So the only way I had to navigate this nightmare was to leave the bureaucratic system and enter the human system. And this is the same lessons that we had to do for Dallas. Um this is because those are the promise of democracy done right. A democratic process that can be owned by citizen that is not complex and obscure like you know like bureaucracy.
Um and in the cryptopia the algorith algorithmic authority is supposed to be better than the bureaucratic one. is supposed to have less corruption, less bottlenecks, less inefficiencies. So was not to like but is that the case? So the thing is that we often forget that Dows are made by human beings for human beings with human beings and we are messy. Human beings are messy and you can automate voting.
Yes. But you cannot automate I'm going to say a blasphemy here. You cannot automate trust and you cannot automate motivation and incentives up to some point. So the problem is not that Dows are not decentralized enough because the code or the repo. They are not the central decentralized enough because human beings will be human beings.
And so here is two key points I want to make here. Um first of all we have people and you cannot put people on smart contract and culture is not code. So when people say that Dows can replace governments the questions are can Dows really enable more participation? Can Dows distribute power more fairly? Can DAO get more democratic governance?
So when looking at Dows, there is three steps that we need to analyze to see if they're decentralized or not. Making a proposal, discussing the proposal, and voting on the proposal. Now, step one and three can be done on chain. Step two should be transparent. But the reality is a bit different because there are bureaucracies, there are inner circles, there are complex voting mechanism.
So that's not really the case. So first of all, making a D proposal um you go on a forum and you write it down. That's it, right? But there is so much bureaucracy that sometimes it feels like it's worse than the European Union. Um some protocols have such complex system.
So you need to make the proposal here to reference that other proposal over there. But then it was amended with the subsection of the proposal over there. And it's almost impossible to navigate it if you don't have someone on the inside. So what do you do? You pick up the phone, you call a friend that is a core member and they will help you because yes, you can put the bureaucracy of the process on chain but you cannot abstract the bureaucracy of a process.
And the second issue with making a D proposal is that so often what you read online um is very much the result of a discussion that happened in the back channels. So before step one publishing the proposal there is a step zero and we don't talk enough about it that very often those are discussed behind closed doors. This is not a bad thing because it means that by the time it gets to the community it is mature enough for the community to discuss about it. So it saves time and resources but it is important to be straightforward about it especially when talking to newcomers. And then there is inner circles.
Humans would be humans and not all opinions are equal. Um there is reputations there is credentials. Um, of course, the opinion of a founder of a DAO or someone that is well respected in the community carries more weight and that makes sense, but also it brings problems because there is unconscious bias and the fact that they are an expert in a topic doesn't mean that they know everything about anything. That's actually a bit unrealistic. So the second issue is that then how do you become someone well respected in a D community?
There can be formal campaigns to become a delegate or you just like become an informally listened voice but the louder voices are not the one that are the most competent, the most expert. So very often we have type A personality people that are very loud, very outspoken, um, charismatic leaders and they get a following. Um, so we don't have even we're supposed to have flaties. That's not often the case. And that once again that's not necessarily bad because humans are human beings and in every culture across the time there has been some level whether formal or not of hierarchy of leadership and we need that.
So you can write a perfect smart contract but you cannot codify the human interactions and human behaviors. Finally, when discussing it out, there is inertia. Um, there is the momentum. People get excited and talk about it and then at some point your proposal dies out. There are sexier proposal coming up.
There is a new Twitter debate and you fight and so your proposal get lost and unless someone will rescue back, it's done. So just very much like in a governmental office and finally voting itself and that is a kind of worms um because you have many different stakeholders groups you have whales you have early adopters you have developers you have investors you have VCs you have the core members and you cannot accommodate everyone. So, and this is funny because the average uh snapshot proposal has a turnover of 3%. This is so low and according to another research um Dows like compound and unis swap they only were being the average turnout was 10%. So, this is super low and is by no means the centralized.
So this is also because voting requires expertise and time to get educated and very few people are here. They have both time and expertise. Most of us are here and once again that's normal. So how do we solve it? We have delegates.
So congratulations because we invented parliament. It took Europe 2,000 years. It took us what? Five years. But still um we got that.
But there's the thing um again I think it was a compound ENS or unis swap. Only 7.5% of circulating tokens were enough to pass a D proposal. So is that a centralized? Imagine like going to a country where only 7.
5% of people actually voted for the government. Will you call that a democracy or a dictatorship? So what's the solution then? Um first of all we need to touch and remember that we are human beings and that human relationship cannot be codified. Culture is not code.
So we need to accept that we cannot use dows as the solution to everything. And if we move the macro saying that's great but that's not enough. And this is because Dows have a single point of failure which is human beings me you everybody else. So we need to once again leave the smart contract system and enter the human system and the signs that are taking that into consideration. So thank you and are there any questions?
Yes. Thank you. Um do you think that uh futarchy uh does anything for Dows like will it be the breakout feature of a DAO and break voter apathy? It is to see but it's like once again you cannot expect human relationship to be solved. So it's like every system needs to get back of the code and put human beings at the center and realize that it's never going to be perfect.
If you expect something to be perfect, no matter what, you will be disappointed because it is impossible for human relationship to be perfect. What what could they be used for? If not, if they if they can't replace a government, what could a Dow be used for in your opinion? Can you repeat the question? What what could they be used for?
A Dow. If it can't replace a government, what utility does it have, do you think? I mean, they can replace a government. I'm not saying they can, but they're not going to be perfect. The main thing is that when people are talking about Dows replacing governments, they think that then everything is going to be perfect.
um society is going to be amazing. We're going to have flying cars. Um that's not the case. So they can replace governments but we cannot expect them to be perfect. I don't remember whom say that democracy was the worst system of all but was also the best.
So you need to accept that it's never going to be like completely fine or automated and it's never going to be perfect. It can replace governments as in it can prevent for example uh Baldos fraud. You know when you go to vote and you write Vitalics or Satashi and you write something else and then there is people fighting. Oh, she wrote Vitalic. No, she wrote Satashi.
Like that, for example, can be put on chain. Um, counting votes, passing proposals, but the human elements, especially in step two, the discussions, it's always going to be interpersonal and human behavior. utility though. No, there's but no I'm not saying there's that utility but as an example is like can you imagine like voting on uh on the country on the um installing a new energy system. I'm not expert in um energy.
I have I know nothing about energy. Um, I know that renewables are cool. That's it. So, I'm not supposed to like if I vote and if I contribute to that, it's not really like something that is supposed to make anything better. Amazing.
Thank you very much. [Applause]
Automatic transcript — names and jargon may be misspelled.
