DeGov Lessons From Athenian Democracy: Participation, Futarchy, Bounties and Retroacive Public Funding
If you only have two minutes…
The journey to make on-chain decentralized governance effective is dotted with several challenges that DAOs have yet to solve:
Far from defining Athenian Democracy as an ideal governance system, the goal of this piece is to “stand on the shoulders of giants”: draw inspiration from this?well documented decentralized governance journey that lasted around two centuries?(508–322 B.C.), and use its learnings for speeding up our on-chain governance evolution process.
This ingenious system, which was in continuous evolution,?achieved optimal solutions for all of the above except attention and participation.
Athenian Democracy effectively counteracted plutocracy, the tendency for power to become concentrated in the hands of a small number of players, by using?extreme participation?(everyone would serve multiple roles in their lifetime) and?permissionless?access, as in the Athenian Assembly any citizen could vote or speak.
Power was separated: legislative, executive, and judiciary, just as today. Differently from today, officials were?selected randomly?across the population, and were supervised through?bounties?(anyone who identified issues and brought them up would be compensated),?futarchy?(judges would decide not based on ideal principles or law, but based on what would provide the most successful future chances for democracy to thrive), and?retroactive public funding?(audits would be performed not by the officials in charge, but by the next government).
At last, the attention problem led to the end of democracy. It was partially solved initially: participants were compensated for attending, similarly to the use of an?attention token. However, speaking became in practice only undertaken by a small number of individuals, leading progressively to tyranny.
If you are curious to learn these concepts more in depth, read on…
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Note: in the following piece, I use classical terminology together with newer, recently coined wording to improve clarity and pattern recognition.
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Challenges of on-chain governance
Many Web3 projects are looking at how to implement distributed/decentralized governance, and if there is a vehicle that could encapsulate this vision, at least conceptually (if not idealistically), it is the Decentralized Autonomous Organization (DAO).
Like most Web3 constructs, it is the subject of frantic experimentation.
Opinions differ as to what functions should be decentralized and how autonomous each DAO should aspire to be. Some of the critical questions are:
In our search for answers, we will try to draw inspiration from a 2,400 year old experiment.
Not an invention of the 21st century
I believe in pattern recognition and?standing on the shoulders of giants .?In other words, a civilization should be able to learn from its past, or we are doomed to face the same challenges and mistakes over and over again.
In this piece, I want to explore the city-state?— a Decentralized Governance (from now on, DeGov) model that goes as far as 2,400 years in the past.
Ancient Greece consisted of around 1000 city-states (or?poleis). These were decentralized in the sense that there was no central Greek government. And nearly half of them employed a form of?distributed, direct democracy. Greeks would gravitate towards the regional?polis, which would afford them protection during times of war and to which they would pay taxes.
This map shows a selection of city-states in ancient Greece, including the places of origin for various characters familiar to us from The Iliad and the Odyssey. Credit:?Wikipedia , Creative Commons 3.0 license, Pinpin
According to?Jonathan M. Hall , the?polis?as defined by the Greeks of the classical period referred to:
Athenian democracy was just one of many types of Greek democracy, and certainly not the first — itself?just the best documented of many forms of government, including aristocracy, oligarchy, militaristic (timarchy), and tyranny.
It’s also worth noting that?the?polis?was divided into many different tribes or ‘demes’. Each deme was like a sub-DAO, with its own assemblies and courts (e.g.?forks). This implies that as DAOs grow, they could adopt a federal structure with the core DAO handling only decisions of particular significance.
And obviously?it wasn’t a static protocol?either! Just like any decentralized governance protocol,?Athenian Democracy constantly evolved throughout its existence, as one would expect of a decentralized protocol. Hundreds of epigraphic records witnessing the decisions of the Athenian Ekklesia show how the members of the Athenian DAO tinkered and tweaked the ‘code’ of their democratic constitution throughout the boom years of the Athenian empire, until its defeat by Sparta, and subsequent conquest by the Macedonians.
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Before we proceed, a disclaimer: our goal here is not to argue athenian democracy is the best governance system. We want to use it as a learning tool.
In fact, according to Samons:
The modern desire to look to Athens for lessons or encouragement for modern thought, government, or society must confront this strange paradox: the people that gave rise to and practiced ancient democracy left us almost nothing but criticism of this form of regime (on a philosophical or theoretical level). And what is more, the actual history of Athens in the period of its democratic government is marked by numerous failures, mistakes, and misdeeds — most infamously, the execution of Socrates — that would seem to discredit the ubiquitous modern idea that democracy leads to good government.
There are also various?critiques of democracy?by some of the finest minds of the age (most notably Plato in?The Republic), many of whom were skeptical of democracy as an institution. In fact, the Athenian democratic protocol was ‘hacked’ and temporarily overthrown by internal oligarchs at several points in its history.
When technology matures sufficiently, an unworkable idea may become suddenly viable. What was enabled by humans, can today be enabled by bots, or smart contracts.
Many of the ideas on how to organize human society have been around forever, but technologies make them feasible and infeasible by turns. A political ideology that requires total centralized control may seem unstoppable when technology favors this… and then may become untenable when innovation turns things in the direction of decentralization.
By examining records of this early Athenian prototype of the present and future DAO, it’s possible that we can see in more detail the inherent challenges of a distributed and direct approach to power, and so discover if, and how, we can find solutions through the tools that blockchain offers.
Athens was entirely decentralized in how it was governed
In contrast to modern-day democracies,?Athenians voted directly on issues affecting the city, with members of the executive often selected by lottery.
Like many blockchain-based institutions nowadays, it was striving to avoid the dangers of centralized, tyrannical power.
Athenian rule is a?combination of direct and delegative democracy, made of direct participation (assembly where all citizens could vote), and delegated authority (magistrates & tribunals, to which posts citizens were appointed and who handled day-to-day government).
Snapshot of the Athenian self-governance protocol in 4th century BC (Wikipedia)
And power would be separated into three?main functions, just like in modern democracies:
Extreme participation
Interestingly, unlike our modern governments,?every citizen would be expected to serve in?each of the three branches of government?at some point in their lifetime. This means not only civil service or military service as in many modern countries, but actual political, legislative, and executive power allocated to everybody at least once in their life.
If we were to draw a parallel with the (typically) flat organizational structure of a DAO, this would mean that anyone and everyone?not only?can?but?must?be chosen to undertake an important role in formalizing, judging, or executing, in addition to exercising their basic voting power.
This speaks to the goal of this power selection tool to be?radically open?to receive the highest number of possible opinions, approaches, experiences, and personal views from the participants.
Random selection by lot
Selection by lot (formally called ‘sortition’) was the most common way to elect officials.?Officials would thus be selected randomly from a larger group, instead of being voted in?on a platform.
The Athenian executive was almost all unelected?(chosen), with the exception of the Generals and Treasurers (where specific skills were required).?This in stark contrast with modern democracy, where voting for candidates is the primary way in which citizens exercise their democratic rights.
The result??50% of any government body would be made up of the poorest citizens.
Selection by lot can be seen as a DAO tool to avoid common electoral issues, such as information distortion (i.e. fake news, smearing), and wealth distortion (i.e. he who spends the most wins), which would ultimately lead to plutocracy and collusion.
Solving for collusion and plutocracy
Adjusting voting power to equalize for whales (i.e. unequal token holdings) is an interesting idea, and could solve?the famous collusion problem?that Vitalik has written about in depth ?(bold is mine):
Suppose that some wealthy user acquires some quantity N of tokens, and as a result each of the user’s k upvotes gives the recipient a reward of N?q (q here probably being a very small number, eg. think q=0.000001).?The user simply upvotes their own sockpuppet accounts, giving themselves the reward of N?k?q. Then,?the system simply collapses?into each user having an “interest rate” of k?q per period, and the mechanism?accomplishes nothing else.
The?Bihu ?mechanism seemed to anticipate this, employing a form of superlinear logic whereby articles upvoted with more KEY gain a disproportionate reward, the aim being to reward popular posts rather than self-upvoting.
It’s a common pattern among coin voting governance systems to add this kind of superlinearity to prevent self-voting from undermining the entire system. Most DPoS schemes achieve a similar effect by limiting the number of delegate slots, and giving no rewards to anyone who fails to acquire enough votes to secure a slot.
But these schemes invariably introduce?two new weaknesses:
1. They?subsidize plutocracy, as very wealthy individuals and cartels can still get enough funds to self-upvote.
2. They?can be circumvented?by users bribing other users to vote for them en masse.
So, could equalization through selection by lot contribute to being a solution to collusion in DeGov protocols?
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The main issue in this context for DAOs is obviously identity. But let’s assume we could solve this by using some form of SBTs (Soul-Bound Tokens).
Solved identity, we could still be left with an open plutocracy, where wealthy individuals (or whales) detain most of the power.?They couldn’t hide anymore by fragmenting their holdings into different wallets, but could still publicly influence decisions, and even information flow (i.e. by creating fake news or leveraging attention tokens to influence the other participants).
In this case,?embedding selection by lot into the most important functions of the DAO, could present a fair solution.
Let’s assume now that SBTs don’t exist, or can’t be used. We are stuck with the identity problem typical of Web3 today. In an identity-free scenario,?futarchy sounds like a safer solution to the collusion issue. Even within futarchy, selection by lot could lead to better power distribution and decision-making.
In conclusion, I believe?selection by lot increases openness, creativity, and the overall cultural richness of the organization. Plus, it would most definitely?increase participation, as the citizen who might be called to execute, or legislate in the next term will pay more attention to the matters of the state today, in order to be prepared. In a way, creating a form of?psychological futarchy: if this job will be mine tomorrow, I’d better take my decisions today based on that future, instead of what is more convenient in the short term but could be detrimental to my role in the longer term.
A graphical description of one form of futarchy, creating two markets representing the two “possible future worlds” and picking the one with a more favorable price. Source?this post on ethresear.ch
Going back to 4th century B.C. Athens, this neutralizing of the?Zipf effect ?made the aristocrats and oligarchs, like Thucydides, Plato, and Xenophon, very cross indeed.?Plato in?The Republic?portrays democracy as the last stop on the way to tyranny. The combination of unbridled liberty and the neutralization of the noblest elements in a society are in his view naturally unstable:
And so tyranny naturally arises out of democracy, and the most aggravated form of tyranny and slavery out of the most extreme form of liberty?
Plato,?Republic, Book VIII
At any rate, adjusting for wealth will make some powerful people upset, and lead to tensions!
Statue of?Plato ?at The Academy of?Athens ,?Greece ’s national academy and the highest research establishment in the country.
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So far, we identified two aspects of Athenian DeGov that could be applied to a DAO context to support stability and security:
Let’s now look in more detail at how the three arms of government (Assembly, Council, Jurors) worked together.
Solving for quality of contributions
The Athenian Assembly (?κκλησ?α) was an open-air meeting, and its function was to vote on critical decisions (=?PIPs?in DAO terminology) affecting the city. It was open to all citizens who wished to attend (permissionless), though only a portion (estimated 20%) would show up to a given meeting.
The total citizenry fluctuated between 20–40k individuals (depending on war/plague). Athens was one of the biggest city-states in Greece, between 10–40 times the size of the typical?polis. It was a system that therefore?worked ‘at scale’?in Ancient Greek terms.
How did this system solve for incentivising positive, constructive contributions? The Athenians also ridiculed politicians in satirical comedies (meme-shaming?) and in extreme cases would resort to?ostracism, or forcing an individual into exile. There are similar mechanics suggested by DAOs too, where bad actors would receive temporary or permanent bans from participating.
Looking at an opposite approach based on incentives rather than punishments, DAO-specific mechanisms so far also include?tokenized reputation and staking. These serve to limit interventions that are not in the public interest (assuming speakers are aware of their own limitations!). And naturally, the drawback is that participation could become even more limited.
Solving for limited participation
Technically, anyone was allowed to speak at a meeting (“isonomia”).?In practice, only a handful of people would rise to speak.?In parallel with the official system,?a?de facto?political class emerged skilled at rhetoric, as well as technocrats who worked behind the scenes.
For DAOs, this model implies that?while voting should be encouraged and certain tasks could be assigned on a rotating basis as an obligation for those holding governance tokens, participation over and above this can only be expected from a small number of highly motivated and/or competent individuals, potentially operating outside the official processes.
Over time, this would affect not only the speakers, but also the participants to such assemblies. And here we go, again,?2,400 years later, DAOs are facing the same issue: limited participation.
As the frequency of Assembly meetings increased and participation became more demanding, attendance at the Assembly meetings became compensated. This is similar to using an?attention token mechanic. But this wasn’t enough, and isn’t enough for DAOs today to ensure participation.
In the end, over 200 years the Athenians couldn’t solve for this problem. Can our technology help us do better?
DAOstack is a DAO-as-a-service tool applying ML techniques to solve the perennial issue of low participation of token-holders in voting:
A DAO using the GEN predictor network has a middle layer between proposal submission and proposal voting that filters proposals by their predicted chance of passing, with the best, most value-aligned proposals boosted to the top of the list. Boosted proposals no longer need 51% of voting power to pass; instead, they require only a relative majority, a majority of the voting power that weighs in on the proposal. DAO members can still vote on any proposal, but they now have a useful guide on where to invest their limited attention.
On the utility of the GEN token , DAO Stack
In a large DAO with GEN prediction, the GEN predictor network can help order proposals by their relevance (via their predicted chance of passing) and removes the quorum required to pass the proposals at the top of the list (“boosted” proposals), reducing the attention burden on members. Source:?On the utility of the GEN token
Meanwhile, Aragon, yet another DAO-aaS tool, is implementing an alternative system known as?optimistic governance , where
all proposals are passed by default unless challenged and resolved on Aragon Court.
With optimistic governance, all proposals are passed by default?unless challenged and resolved on Aragon Court. Source:?Optimistic Governance?for your DAO
Executive function supervision: futarchy, retroactive public funding and bounties
The Council (βουλ?) was a 500-strong body, elected every year (proportionately and randomly by lot, from the various districts). As the primary executive body, it was in session more or less permanently throughout the year, and its tasks included running the day-to-day business of government, awarding public contracts (e.g. building a new temple on the Acropolis), auditing all officials in charge of spending public funds (including former Council members). Because it was more or less a full-time job, the Council members were paid for their time.
Reconstruction drawing of a meeting -in the Bouleuterion. Drawing by Richard Anderson.?Agora Museum Archives .
A citizen was debarred from serving on the Council more than twice in their lifetime, and could not serve two consecutive terms. As a result, most citizens would sit on the Council for at least one term.
Applying this to the present day implies the?existence of a permanent team with constantly rotating staff, which executes DAO motions, runs day-to-day operations (e.g. responding to queries, preparing lists of potential vendors etc.) or contributes to building the infrastructure (e.g. engineering team). The team would be remunerated from the DAO treasury, and would be elected by lot and proportionally: so the larger the organization, the larger the exec team.
Let’s assume now we want to solve for the executive team providing fair and honest financial management?under any circumstance, and prevent the potential exploitation of their power for personal benefit.
In the decentralized governance protocol of ancient Athens,?accounts would be audited by the next set of executive members. This is a smart solution whose application is connected with a psychological form of futarchy: it forces the exec team to take delicate decisions that might be affected by personal interests based on the future, instead of present advantages. How can we replicate this in a DAO?
On-chain, we could design a smart contract that releases outstanding payments to Council members of period Y only when the accounts have been approved by the members of the next period, Y+1.
This form of post-payment increases the likelyhood that Council members in year Y design a fair set of incentives, because they know that set of incentives will be received by their successors.?This is an interesting form of dissuasion and incentive that lives at the intersection between futarchy and retroactive public funding.
An illustration of the proposed Optimism governance scheme. Optimism (and Karl Floersch, Chief Technology Officer and cofounder) are maybe the main protocol experimenting actively with the governance benefits of retroactive public funding. Vitalik defined Optimism’s project as “Possibly the biggest attempt at non-token-holder-centric DAO governance so far.” Source:?Twitter .
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What’s another way we could monitor and supervise officials? In blockchain protocols, this could be achieved with?bounties. Traditionally, bounties are awarded to teams that find bugs or weaknesses in the code. Open to anyone, just as the code, they are awareded for objective measurement of a transparent object.
What if we could extend the use bounties to also find faults or dishonesty in the executive function by humans, which is by design less transparent and less objective than code??This could be applied for example to identifying misuse of funds, or any behavior that is not in compliance with the rules of the DAO or in line with its goals.
Let’s assume we want to implement an executive function monitored by bounties to on-chain distrubted governance. This is what we would need:
In this scenario,?the bounty-hunters would look for anyting that is not transparent nor openly tracked on chain. For example corruption, collusion, or personal interests of the executive that DAO participants are not aware of. But this isn’t enough.
In case some issue is actually found, we would also need:
Randomization, bounties and proof of stake as enforcers of judicial function
The law courts in ancient Athens would be in session for most of the year. Annually, 6000 citizens would be?chosen by lot as potential jury members (δικαστα?). This is similar to how jury duty works in countries like the United States. In a DAO context, we could compare the Jurors to dispute resolution tools like?Aragon Court .
Each citizen had a bronze juror token (seriously!), which was used to select jurors at random (via a stone allotment machine), cast votes, and claim jury pay.?This de facto a governance NFT in real life.
As we can see,?randomization is the grand enforcer of equity and justice in the Athenian protocol that could be translated into on-chain governance easily and effectively, and could extend to as many of its functions as possible, in order to preserve its democratic foundations.
Ostraka are shards of pottery that were used as a voting ballot in ancient Greece. These artifacts were found at the Acropolis of Athens and date to around 482 B.C.E. They are on display at the Agora Museum, in Athens Greece. Leemage/UIG via Getty Images
In Athens,?if you prosecuted someone and won the case, you would be entitled half of the fine exacted or property confiscated as a reward. This is also another form of?bounty.
Hence, to avoid people making up law cases purely for monetary gain, it was necessary to prove that you had a personal stake in the case (i.e. you had suffered because of the crime). A?proof of stake, in other words.
Decisions were?political, in the sense that they were made not primarily on the basis of the candidate’s guilt or innocence, but on the benefit that a given verdict would bring to the city as a whole. This, again, goes in the direction of futarchy.
Those who vote unjustly against a citizen for reasons that would benefit them individually — but not the city as a whole, are made to think about the world they are creating for their future. A world they would then “buy” into, and how the decreased value of that world could be negatively affected by their decision.
It’s an?early form of futarchy?in the sense that instead of focusing on the outcome of the judgment in the present, jurors are made to vote based on a prediction of the future consequences, and not on themselves or the sufferer individually, but on the entire construct of society and democracy.
This is very interesting as I see parallel with how great organizations take decisions: not thinking about the impact of those decisions today, but about the?impact in the long term. I remember this is specifically one of?Google’s cardinal principles for decision making.
I’m wondering,?beyond implementing futarchy for voting, could there be a protocol application of futarchy for dispute resolution (i.e. judicial function)?
There’s several ways to approach dispute resolution on-chain. We could judge members actions based on:
For example: a member of DAO-A hasn’t disclosed their participation to DAO-B which has opposed goals, and has been voting and influencing decisions within DAO-A in the direction of supporting DAO-B.
Justice in this sense might mean forcing the candidate to disclose their interests in other DAOs.
In this case, and referring to the example above, the values of the DAO might imply that the member should pay a fine, or be excluded from voting. A different outcome results from applying justice vs applying values.
In this last scenario, if the DAO Jurors judge by applying futarchy, they are judging not based on justice, or the DAO values and principles, but by what action would ensure continuity and success to the DAO in the future. In this case, the answer might be that the member who didn’t disclose their “double-dipping” would be expelled and their tokens burnt.
Election when specific skills are required
For completeness, we should mention that there were two other main sub-branches of the Executive in addition to the Council: the Board of Generals (10) and the Treasurers (10).?These latter two groups were?elected?because specific skills are required to do the job, but would still be subject to scrutiny.
In DAOs, there may be roles that can’t be selected by lot, because they cannot be performed by just anyone — for example the programming of smart-contracts. Members that take on these responsibilities could be seen as closer to?the technocrat civil servants, who, by contrast, in today’s democracies, are?unelected.
In Athens, such officials were more vulnerable than non-elected officials, as they could be voted out at any point by a proposal to the Assembly, or prosecuted for malpractice (again, bounties).
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Concluding thoughts
This highly simplified, but accurate, overview of Athenian democracy shows how the Athenians traded off the need for direct democracy against representative government, through a mixture of random selection, heightened scrutiny, and means of punishment.?These tools are directly applicable to on-chain governance too, where DAOs have yet to solve many issues.
I hope that we have discovered how many of the concepts we employ today, such as bounties, tokenised attention, futarchy, are all but new. But with the help of technology, we can often make them more precise and effective.
Many other concepts, such as randomization or selection by lot?in primis, have been used successfully before but are underestimated or underemployed in modern democracies and DAOs. Their application would benefit our on-chain organizations in creativity, diversity, and distribution of power.
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Most of the tools we explored were used more effectively in the past, and, in proportion, by a much larger number of people. I hope we get to the point where Web3 can become more accessible thanks to the adoption of more effective democratic tools. Abstraction and education will help us to avoid what happened in ancient Greece (and not only there and then!), where knowledge ended up strumentalized by plutocratic governments to take away power from the people.
In the end,?it would be unfair to compare 200 years of evolution in decentralized democracy performed by some of the finest civilizations, with the few years of experimentation we, quite rigid thinkers, went through so far in the Web3 revolution.?There’s a long journey in front of us. I hope you’ll join it with optimism and much patience.
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Harness Entropy @ Noise
6 个月Great piece! Curious to get your thoughts on what other objective functions do you see a DAO/Collective should optimize for under a futarchy (other than Y/N token prices)? And do you see retroPGF resembling futarchy features?