Peeling the layers of Decentralized Governance in the Era of the Blockchain. Presentation at the Blockstack Decentralizing the World Event in Hong Kong, Jan 10 2018.

1. Peeling the Layers of Decentralized Governance
William Mougayar
Investor, Advisor, Board Member
Author, The Business Blockchain
Founder, The Token Summit and WMX
@wmougayar
wmougayar@gmail.com
January 10 2019

2. Disclosures and Market Activities
• Book (10 languages)
• Token Summit
• Blogging
• WMX Blockchain Index
• Strategic Advisory
• Boards & Foundations
• Startups Investments
• ICOs participation &
Advisory
• Regulatory interactions

3. Decentralization is the
blockchain’s raison d’être.
© 2018 William Mougayar @wmougayar

4. The stone age didn’t end for a
lack of stones.
© 2018 William Mougayar @wmougayar

5. Nothing wrong with Central Systems, as long
as they are NOT:
© 2018 William Mougayar @wmougayar
1. Unfair
2. Corrupt
3. Untrustworthy
4. Evil
5. Abusive
6. Inefficient
7. Expensive
8. Useless
Reality:
Few centrally-run organizations
don’t have these flaws!

6. The Incentives to Move to
Decentralization Must Be Strong.
© 2018 William Mougayar @wmougayar
➔ Loss vs. Gain Risk Appetite

7. Decentralization is
an unusual beast.
© 2018 William Mougayar @wmougayar

8. Decentralization
On-Chain
0%
100%
100% IDEAL
?
?
© 2018 William Mougayar
@wmougayar
Reality

9. Decentralization Projects Are
Communities.
© 2018 William Mougayar @wmougayar

10. Communities Toolbox
© 2018 William Mougayar @wmougayar
✓ Strong mission
✓ Free entry
✓ Transparency
✓ Free contributors
✓ Full re-mixability
✓ Strong protocols
✓ Fair authority
✓ Non-tribalism
✓ Self-organization
✓ Tolerance
✓ Measurable success
✓ High scoring
✓ Decentralization
✓ Free workspace
✓ Smooth learning
✓ Regular structure
✓ Positivity
✓ Sense of humor
✓ Minimalism
✓ Sane funding
Source: Social Architecture by Pieter Hintjens

11. © 2018 William Mougayar @wmougayar
BLOCKCHAIN
Technical
Business
Legal
Social
• Implementation
• Motivation
Simultaneous
Impact is
Necessary

12. Decentralization is a
Defense Mechanism.
© 2018 William Mougayar @wmougayar

13. © 2018 William Mougayar @wmougayar
Blockchains
P2P Networks
Protocols
Dapps, Apps &
Platforms
Socio-Political
Change
Lots here
Blockchain-Based Governance Segments
Key Drivers:
• Financial Efficiencies
• Rewiring the Web
• Fixing Unfair Societies

14. Different Priorities … Different Governance
© 2018 William Mougayar @wmougayar
Blockchains
P2P Networks
Protocols
Dapps/Apps/Platforms
Socio-Political Change
Sybil attacks, Consensus process.
Installation, Self-incentivization, Economics.
Adoption, Ecosystem, Value.
Network Effects, Development, Support.
Inclusiveness, Fairness, Wealth Distribution.
Segment Key Considerations

15. Diverse Governance Stakeholders
© 2018 William Mougayar @wmougayar
• End-users
• Developers
Users
• Core
• Community
Developers
• Token holders
• Equity owners
Investors
• Active
• Passive
Regulators
• Miners
• Stakers
Nodes
• Foundations
• Founders
Organizations
• Internal
• External
Influencers

16. © 2018 William Mougayar @wmougayar
Blockchains
P2P Networks
Protocols
Dapps/Apps
Platforms
Socio-Political
Orders
Users
Developers
Investors
Nodes
Organizations
Influencers
Regulators
Mapping Segments to Stakeholders

17. Some Experimentations in
Decentralized Governance
© 2018 William Mougayar @wmougayar
❑ Liquid Democracy
❑ Quadratic Voting
❑ Futarchy
❑ Token Curated Registries
❑ Foundations
❑ Councils
❑ Associations

18. © 2018 William Mougayar @wmougayar
➢ Token Curated Registry
➢ Community Veto
➢ Liquid Democracy
➢ Cryptoeconomic Modeling
➢ Off-chain Voting
➢ Cross-blockchain Governance

19. © 2018 William Mougayar @wmougayar
➢Board
➢Community
Governance Panel
➢Helios Voting
(private,
verifiable)

20. © 2018 William Mougayar @wmougayar
➢ Smart contracts for on-chain governance
➢ Aragon Governance Proposal process:
➢ Community proposals
➢ Aragon Association reviews
➢ Token vote
➢ Digital jurisdiction

21. © 2018 William Mougayar @wmougayar
➢ Melonport AG handover to Melon Council
(Swiss Verein non-profit association)
➢ Melon Council to oversee protocol evolution
➢ Melon Technical Council appointed by MAG
(MTC)
➢ Developers apply for funding via Melon
Improvement Proposals (MIP)
➢Melon Exposed Business (MEB)

22. © 2018 William Mougayar @wmougayar
➢ Blockstack PBC decentralizing itself
➢ App Mining payouts based on decentralized
rankings
➢ Non-profit Foundation
➢ Independent regional entities
➢ Signature Fund
➢ Milestone-based fund unlocking
➢ Advisory Board for Token Fund

23. © 2018 William Mougayar @wmougayar
Are We Decentralized Yet?

24. © 2018 William Mougayar @wmougayar
Decentralization
Appliance

25. Dilemma: We are still defining
Decentralization
© 2018 William Mougayar @wmougayar
In Blockchains:
❑ How transactions are validated (double spend problem)
❑ How attacks are mitigated or eliminated (security)
❑ How rules/protocols change (evolution)

26. Use Governance as a Tool,
not a Weapon.
© 2018 William Mougayar @wmougayar

27. Governance
vs.
Governing
(not the same)
© 2018 William Mougayar @wmougayar

28. 12 Issues and Challenges
© 2018 William Mougayar @wmougayar
❖ Token isn’t always needed
❖ In decentralization, economic incentives matter
❖ It is not just about voting
❖ Decision-making by consensus is not ideal
❖ Communities alone shouldn’t govern
❖ Beware of premature decentralization of governance
❖ When will Code = Governance?
❖ Transparency / Openness in Self-governance
❖ One size doesn’t fit all
❖ Large gap in governance UI’s (still very technical)
❖ Legal and moral aspects of unstoppable P2P networks
❖ Obsession with self-governance (DAO was not a standard)

29. “In decentralized systems,
problems can be solved early
and when they are small.”
-- Nassim Taleb
© 2018 William Mougayar @wmougayar
Let’s remember…

30. © 2018 William Mougayar @wmougayar
Computation
Protocols
Data
Content
Storage Work
Rewards
EarningSpending
Sharing
Industry
Trade
Law
Finance
Nations
Big Picture: The Blockchain Economy

31. Can the blockchain lead us to a
new world that is better than the
current one?
© 2018 William Mougayar @wmougayar

32. THANK YOU
William Mougayar
Investor, Advisor, Board Member
Author, The Business Blockchain
Founder, The Token Summit and WMX
@wmougayar
wmougayar@gmail.com
http://startupmanagement.org/blog