"Collapsing and Expanding" Governance Models

[stephen-rowan]

Bruno shared the article -

"collapsing-and-expanding"

(https://30000feet.substack.com/p/issue-13-collapsing-and-expanding)
Andrew Beal, 18th April 2021.

Which looks at how to reform/remodel decision-making hierarchies etc.

Key Quotes -

Tokenholders.

Tokenholders own the protocol’s governance token. They are the equivalent of shareholders in that owning the token entitles them to vote on changes to the protocol. It’s not a perfect analogy, but it’s close.

The key observation here is tokenholder-based governance takes the layered structure of corporate governance (diagram above) and collapses it down into a single tier. By removing the hierarchy and segregation, every decision shifts to the tokenholders.
[ ...}

As we learned during our appetizer, this is suboptimal for a few reasons:

(1) Too many decisions - Even with improved governance tools (and they are improving, a lot), tokenholders cannot and do not want to make every decision. There are just too many. As a result, very few tokenholders participate in the voting process.

(2) No specialization - often times, tokenholders are not the most informed on an issue. Asking them to approve something they have no knowledge or experience with isn’t productive.

[ ... ]

Decentralized Governance 2.0 - “Expanding”

Protocols are realizing that relying on tokenholders for all decision making is not efficient, and are beginning to re-introduce tiers. What I’m calling Decentralized Governance 2.0 is the expansion of the decision making structure back in the direction of traditional corporate governance.

[ ...]

I love this approach and proposal because it promises to provide two things decentralized governance is in desperate need of: specialization and efficiency.

Specialization. Tokenholders are comprised of founders, employees and contractors, advisors, investors and retail and institutional speculators. While a few individuals may have the bandwidth and experience to make informed decisions, the collective does not. Delegating authority over specific functions to individuals with the time and knowledge to make informed, thoughtful decisions will generally result in better outcomes.

Efficiency. Having “the crowd” vote on everything is paralyzing. The process is slow and not reasonable for tactical, day-to-day decision making. Smaller, specialized groups can coordinate and make decisions faster.

[stephen-rowan]

Summary

1. Expansion is a strategy to maximize the efficiency of a collapsed hierarchy.
2. Expansion is done to mitigate the problem of "too many decisions" and "No specialization".

Issues

1. A possible that comes to mind with the Collapsing/ Expanding approach is the return of a hierarchy by stealth via specialization.

Alternatives

1. Another strategy is to minimize decisions that require intervention.
2. A minimal decision strategy seeks to distribute decisions minimally (possibly just-in-time) to avoid saturation and apathy.
3. I was reading somewhere (possibily Singularity DAO) about a minimal decision strategy (where decision-making by humans is rationed to maintain engagement). The weight of mundane decisions is then off-loaded to AIs which guide mass participation.