Community Call 08.15.19: Decentralized Governence

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Hey everyone,

We had a great discussion on this week’s community call around decentralized governance with Chris from Chainflow & Staking Defenders as well as Gavin and Lorien from Figment Network. Unfortunately, the audio from the video recording got messed up around 10 minutes in (sorry everyone!), so I thought I’d bullet some of my key insights from the call here for the community.

Gavin:

  • Likes the idea of Livepeer as a technocracy, a small group of tech-savvy people developing the network at the early stage of the network.
  • Posed the question: how do you move beyond a technocracy towards more decentralized governance once the tech has matured?
  • It’s important to establish a project’s core values from the onset so people can make decisions based on those values. Establishing these values too late would be like “trying to unscramble an egg”.

Doug:

  • Asked the community its thoughts on a formal constitution as an off-chain social contract to guide project decisions and proposals, referring to the Cosmos constitution and Satoshi’s whitepaper as examples of this.

Chris:

  • Likes the idea of communicated and understood values for communities to refer to when making decisions.
  • Doesn’t believe it’s too late for existing projects to establish and communicate these values because it’s still early and there’s still only a relatively small group of active participants.
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Thanks @adamsoffer! Just a few additions and some clarification on the ideas/opinions I provided in the call.

Validators tend to be vigilant, which is convenient, because attention is necessary for good governance. But that doesn’t mean that validators’ values are aligned with the values of the network and the other stakeholders.

Question the role of validators or transcoders in governance. Since token-holders tend to be passive in token-based voting, validators eg. in Cosmos run the network and by default control the decisions to change to the network, which concentrates a lot of power in their hands.

How does bundling governance with security change incentives? It could be more valuable to a validator to have voting power than income for providing security. This may dilute or drive down the value of security. An example of this is Sikka on Cosmos, in which Sunny Aggarwal has been able to use zero-fee commission (and insider status) to dominate the validator set’s voting power.

Transcoders are different than validators, in that they provide security and a transcoding service to the network. Their values may be better aligned with those that use Livepeer’s network than those who use Cosmos’ network.

Be skeptical of establishing a core set of values beyond technocratic ones, because our values tend to change as the ownership of the network evolves eg. with new stakeholders. It’s difficult to find an agreed-upon interpretation of a situation in relation to the constitution (ie. it tends to become a debate about whether one point of view better reflects reality than another point of view). Defaults weigh heavily, so it can be difficult to revise a constitution to better serve a changing network.

I think that there should be a plan to build capacity for a diverse and growing set of stakeholders to participate in governance before establishing an elaborate governance system. I think that the network should be useful ie. worthy of governance before transitioning control into the hands of the community, and I like using technocracy to drive that development.

I liked that @nryan broke governance into elements of treasury, code, and control. @dob emphasized a need for governing the execution of decisions, and with checks & balances eg. protocol pause, bug fixes that are implemented quickly to safeguard funds, but without introducing single points of failure.

I’m writing an article to describe these ideas.

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Here’s the article, which contains the audio recording of the community call: https://figment.network/resources/considerations-for-decentralized-governance-with-livepeer/

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