Kaal claims by topic: governance-design, page 3

814 atomic, individually citable claims from the published work of Wulf A. Kaal tagged governance-design.

Transcendental values are more stable unifiers of a group than formal secular rules. 2021
No set of written rules can be made complete: the Folk Theorems demonstrate that however rules are written, strategies exist that follow those rules yet profit the individual at the expense of the group, so a perfect secular constitution is impossible. 2021
Because a transcendental value is by definition not rigorously formalizable, people organizing around an eternally unobtainable ideal without clear boundaries are less likely to probe the boundaries of acceptable behavior. 2021
An ideal DAO with open membership for anonymous members from any culture can maintain harmony only if its members share a transcendental value, work toward a common purpose even if that purpose is simply profit, and share fairly in the spoils of the work. 2021
The centralized hierarchy built by the Chinese Communist Revolution was extremely successful at the military goal it was designed for, but once the military threat was gone it failed completely at solving other important problems, producing catastrophic reforms such as the Cultural Revolution and the Great Leap Forward. 2021
The lesson the authors draw from Imperial China and Pharaonic Egypt is that decentralization of power and individual autonomy give long-term stability when the society also has unifying ideals it can believe in. 2021
Without a transcendental spiritual or philosophical principle to unify a society, its rules erode as exceptions to the routine are discovered that improve function temporarily yet violate the founding principles of the culture, and such violations split the population. 2021
Almost every blockchain project the authors are aware of is suffering under the centralizing force of competition for equity control and profit, and such projects predictably move toward centralization when unconscious of these forces. 2021
Good ideas will fail to be implemented unless the reward structure is balanced, because people rarely keep working idealistically toward group goals while rent seekers at the top split the rewards unfairly. 2021
Reputation permits business with any member of a network regardless of personal acquaintance, but only if the network is closed and its size is limited by the ability to police reputation with the available information technology. 2021
Democracy itself decentralizes power, but to unify a large population holding diverse values the United States relies on rigid protocol centralization from a Rule-of-Law legal system, whose statutory clarity supplies the fairness and transparency that diverse groups require. 2021
The separation of powers works because it makes each branch's power derive from the others, harnessing the natural human competitive impulse to stop any branch from usurping power not enumerated in the Constitution, which is what the checks and balances prevent. 2021
When the executive branch is given more centralizing power during a crisis, or simply takes it, the mechanism for removing that power once the threat has passed has rarely been followed. 2021
The authors stipulate that functioning democracies are decentralized autonomous organizations: the United States government is a DAO, as are Norway, Mauritius, Uruguay, and South Korea, and every functioning democracy is more akin to a DAO than to a centralized corporation. 2021
In designing governance for large global networks, protocol centralization is necessary in order to display objective fairness, yet that same protocol centralization leads to instability, which is the core design tension the chapter's historical cases are meant to resolve. 2021
The CRDAO governance model enables a community policing and audit methodology for code reviews, and those governance and policing functions ensure less duplication of code reviews. 2021
The CRDAO governance framework is the decentralized governance framework developed by Craig Calcaterra and Wulf Kaal, further enhanced and implemented by the code review DAO, and CRDAO members get paid to participate in that governance. 2021
Decentralized autonomous organizations combine feedback loops and transparency features with community governance, and that combination addresses the shortcomings of charitable organizations in centralized structures. 2021
Private foundations exercise plutocratic power because their leaders and trustees are not elected democratically, they are permitted to operate in perpetuity, and their operations lack accountability and transparency. 2021
Only applicants who demonstrate both successful fundraising and successful fulfillment of donative intent are eligible for CHARITYxDAO voting associate status. 2021
Because the CHARITYxDAO records governance on distributed ledger technology, all governance votes and endowment allocation decisions are fully publicly visible, auditable by the public at will, and immutable once on chain. 2021
The public commenting function on the forum lets the CHARITYxDAO internalize information from the edges of the charity ecosystem that would otherwise have no agency in any charitable organization, and that new information further increases the accountability of the DAO. 2021
On chain governance takes the donation out of the hands of the individual donor, who may one sidedly or mistakenly allocate assets, and puts the asset allocation and policing decisions into the hands of the community of voting associates. 2021
By giving the power of the endowment to the DAO the donor relinquishes control over the assets in exchange for community governance, and that relinquishment builds trust and community buy in, which in turn secures growth and legacy for the donor's purpose. 2021
Decentralized evolutionary and dynamic governance forms the foundation of the CHARITYxDAO community values and core beliefs, and decentralized governance is what provides cohesion and longevity in the DAO. 2021
Any exercise of the multisig endowment wallet keys ultimately depends on a vote in the assembly of the DAO association that serves as legal wrapper, so a donor holding one key among many is involved in endowment payment decisions without controlling them. 2021
The CHARITYxDAO's long term success depends on maintaining dynamic decentralized fluidity and order; without it the values that initially united the voting associates are at risk of morphing into ever tighter, more complex, and hierarchical structures. 2021
Merit in the CHARITYxDAO is expressed by a non fungible reputation token that cannot be bought or sold, and voting is designed around staking those non fungible reputation tokens. 2021
Every CHARITYxDAO decision runs through a two vote model: a loosely coupled sentiment vote with no reputation at stake, followed by a tightly coupled final vote with reputation at stake. 2021
Because voting associates can see the sentiment vote outcomes and who staked what reputation before the binding vote, it is reasonable to expect that the overwhelming majority of final tightly coupled votes will end in unanimity on the issue at hand. 2021
Reputation staking overcomes the polarizing effects and suboptimal vote outcomes produced by one token one vote voting mechanisms. 2021
The design decreases the likelihood of individual and, in turn, community liveness fault, because non use of existing reputation at the individual level leads to inflationary devaluation of that reputation. 2021
Delegating one's vote to a third party whose ethics and belief system the voter does not truly know produces suboptimal outcomes, and delegated voting on issues that cannot be foreseen is corrupting. 2021
Elected representatives are incentivized to maintain their own power of office rather than to vote for outcomes reflecting the presumptive wishes and needs of their constituents. 2021
Microdemocratic vote allocation improves voting outcomes because the proportion of votes a voter allocates to an issue evidences that voter's higher level of knowledge on the issue, and voters are unlikely to give top priority to issues they know little about. 2021
Microdemocratic systems must solve the tragedy of the commons, because without controls self interested voters acting independently of the totality of voters may deplete or spoil shared resources such as the environment and public goods. 2021
Majority rule in microdemocratic systems can produce discrimination against minorities, because a majority that is itself unaffected by a rule it instantiates can impose a discriminatory impact on a minority that is disproportionately affected. 2021
Microdemocracy's key advantage is the speed of change it can initiate: because technology permits incorruptible instantaneous counting and tallying of votes, voting becomes dynamic and incremental and political will is exercised more directly. 2021
Unlike their centralized predecessors, decentralized technologies enable, for the first time in history, improved incentive designs that help overcome the insufficiencies in the voting outcomes of representative democracies. 2021
Upgrading existing representative democracies with decentralized supplemental voting systems may require constitutional or democratic support, and the availability of that support is dubious at best. 2021
Decentralized voting solutions require political will as well as technology, and governments in existing representative democracies may refuse to surrender control over the voting process, preferring private blockchains to facilitate voting outcomes. 2021
The conveniences and benefits of centralized algorithmic automation carry risks to humanity that cannot be fully quantified, and decentralized systems can counteract those downsides and threats. 2021
As algorithmic analytics and predictions of human preferences become increasingly accepted, exercising human political will by proxy through algorithmic interpretations may become the new normal in the foreseeable future. 2021
Blockchain based guarantees remove agency costs because principals are less required to institute oversight and monitoring of agents, which addresses inherent agency problems in modern finance and corporate governance. 2021
Platform centralization is especially damaging in developer communities because developers are the channel through which information from the edges of the system and society enters, and through which consensus on emerging technologies is formed. 2021
The initial Casper testnet was subject to inevitable centralization, illustrated by a small group of core developers setting validator performance numbers and other rules without broader community input. 2021
Any testnet environment depends on proper governance to allocate power fairly and equitably at equilibrium in a sustainable fashion. 2021
Shasper governance is funded in a hardcoded way: each validator that succeeds in propagating a block allocates a fixed percentage of its block reward, denominated in SHAS, into a separate SDAO wallet, in addition to the ordinary Casper PoS allocation. 2021
Tokens accumulated in the SDAO wallet are distributed to voting associates in proportion to their SDAO reputation score, so payout tracks reputation rather than stake. 2021
A voting associate's SDAO reputation score is determined by that associate's merit, level of activity, and engagement in the SDAO. 2021
Using the SDAO, the Shasper Network lets its developer community determine by community consensus which technology upgrades to the testnet should be created. 2021
Peer governance substitutes for platform gatekeeping: rather than convincing legacy technology leaders and their platforms, developer teams engage their own peers in the Shasper DAO to discuss and vote on proposed upgrades and testnet projects. 2021
Changes to the Shasper Network codebase require Shasper Network governance votes. 2021
Nodes accumulate reputation in two ways: by being onboarded into the SDAO and performing well as node validators, and by participating regularly in SDAO governance votes. 2021
By balancing validator stakes against reputation, HSPoS reaches an equilibrium of incentives in which validators are motivated both to succeed economically as validators and to participate actively in decentralized governance. 2021
Governance decisions such as network upgrades follow a simple vote that mints no reputation, yet reputation in the SDAO can still be lost through a governance vote because each vote follows the DEVxDAO MVPR logic moving from loosely coupled to tightly coupled voting. 2021
Corruption is defined as a minority subgroup collecting the power or wealth of an organization for its own benefit at the expense of the larger group. 2021
When the letter of the law becomes more important than the spirit of the law, internal competition for power makes the winning strategy to push behavior to the limit of what is acceptable. 2021
No static set of logical rules can ever succeed in preventing corruption, which is the ultimate problem with relying on letter of the law governance instead of spirit of the law governance. 2021
Long-term organizational stability requires a dynamic governance system that can adapt the rules to changing circumstances, a requirement that holds for any organization but especially for decentralized ones. 2021
The second necessity for long-term stability is that the organization hold to its ideals and transcendental values, so that the spirit of the law overrides the letter of the law. 2021
Governing by transcendental values, ideals that everyone understands but no one can concretely attain, reduces members' motivation to probe the limits of acceptable behavior and therefore reduces the policing the organization must pay for. 2021
The Maghribi traders built a sophisticated decentralized trade network using the information technology of their era plus reputation, and later farmers used dynamic governance designs to create the most powerful decentralized organization in history. 2021
Western democracies still run on structures developed decades or centuries ago and have no formal interaction with the new data stream produced by modern information technology. 2021
Before blockchain technology and cryptographic security, a dictatorship was necessary for governing a large network because more sophisticated governance architectures such as democracies could not govern efficiently at that scale. 2021
The autonomous element of a DAO comes from its governance system being programmed through smart contracts, which makes a DAO ultimately democratic rather than relying on a benevolent dictator to correct course during black swan events. 2021
Decentralization is not merely delegation, deconcentration, devolution, or the redistribution of centrally organized authority or centrally collected revenue; equating it with those terms misstates what decentralization is. 2021
The degree of decentralization can be delineated by distinguishing logical decentralization, architectural or hardware decentralization, and political or governance decentralization, though some overlap among these concepts is unavoidable. 2021
Because information in decentralized systems is continuously outdated by a changing environment, decentralized governance must be autonomous and automated, able to evolve, mutate, and create new information precedent, in the way mitosis replaces worn out cells. 2021
The delayed voting outcomes and feedback effects created by the transition from loosely coupled to tightly coupled voting let DAOIC members triangulate their own internal liquidity position against deal feasibility. 2021
In the theoretical model, the incentive design of decentralized reputation staking governance aligns the individual with the group so tightly that the agent cannot gain personally at the expense of the principal. 2021
Against the view that firm commitment underwriting is antithetical to decentralization, Kaal argues it in fact further enhances the level of decentralization. 2021
Once its market position is solidified, the DAOIC could mandate that each token opportunity adopt decentralized governance mechanisms before the DAOIC begins reputation staking on it, using its market power to force governance reform. 2021
The decentralized reputation staking governance mechanisms provide a higher form of decentralized governance than most legal standards in any given jurisdiction. 2021
Conflicts of interest from DAOIC members participating on the public side of a deal are minimized because the loosely coupled reputation staking vote and its transition to a tightly coupled vote are transparent to the public. 2021
Ratio adjustments are the DAOIC's key tool for strategic increases in profitability and overall policy, and they should be subject to a member vote conducted through the decentralized reputation staking governance mechanisms. 2021
Decentralized reputation governance models in venture capital have the potential to upgrade the venture capital market. 2021
A VC's proportional holdings of reputation tokens are likely to increase over time if the VC follows sound and successful practices by staking reputation tokens on investment proposals and succeeding in the selection of portfolio companies. 2021
Through the decentralized governance precedent system, projects upvoted by the whale validation pool that have the highest comparative ROI get more citations in the reputation system and continually enhance the reputation of the whale who sourced and proposed them. 2021
The collective wisdom of DAO investment club members helps hedge against purchase risk, and because decentralized governance with loosely and tightly coupled votes will very likely make all tightly coupled votes unanimous, no member loses reputation NFTs. 2021
Governance in a decentralized organization depends on meaningful reputation, and the meaning of any reputation is determined by its history and by how that history is analyzed and presented, which makes historiography a governance variable rather than a neutral record. 2021
The choice of historiography is a design choice about the architecture of higher order information storage, and because deciding what is true is the judicial function, historiography is effectively the architecture of judicial governance. 2021
Condorcet's Jury Theorem cuts both ways: larger groups of slightly stupid people, defined as being wrong slightly more than half the time, are worse than smaller groups of stupid people, so the idiocy of the mob is the counterbalance to the wisdom of the crowd. 2021
The protocols governing how a particular oracle question is answered should be set by the subject matter experts themselves rather than by a static centralized hierarchy, because the experts know best how their own system can be gamed and how to prevent that gaming to protect their hard earned reputation. 2021
Robust decentralized oracles do not yet exist despite well funded proposals, because decentralized oracles are themselves DAOs and therefore inherit the same missing incentive structure, governance processes, and history that all DAOs suffer from. 2021
If transparent democratic institutions are not built to replace the corrupt ones, new opaque centralized institutions will take their place, as Facebook, YouTube, and Twitter already do with secret algorithms that control what stories spread with no democratic oversight. 2021
Reviewing through references enables punishment and reward in DAOs, which shifts members' motivation away from immediate rewards toward the future and encourages delayed gratification and sacrifice for the good of the group. 2021
Review creates a decentralized history for a DAO, and that history gives the organization momentum, gives meaning and focus to perception, and is the basis for making governance, understood as steering, more effective. 2021
The failure of many DAOs to date is traceable to their reliance on the good will of network members rather than on engineered incentives. 2021
Because eternally perfect protocols are impossible, as illustrated by Arrow's Impossibility Theorem and the Folk Theorems of Game Theory, the remedy is not a better static ruleset but a system that continually improves its protocols and smart contracts in reaction to market change. 2021
Concentration of power is the greatest threat to any decentralized organization, because a single member or sub-coalition that gains a majority of power in an inherently democratic organization will eventually control it no matter what safeguards are in place, at which point the organization is no longer decentralized. 2021
One-person-one-vote governance fails on technical questions because half the members have less than average expertise yet equal power, which incentivizes experts to gain power by catering to less expert prejudices instead of pursuing the most effective decisions. 2021
Contemporary blockchains cannot support the proposed architecture because the technology is too slow and expensive to poll members on every transaction, and the messages required for all nodes to register all votes on every action multiply into an unmanageable number. 2021
Reputation-based governance faces a chicken and egg problem: voting becomes more efficient once reputation is valuable, but reputation cannot become valuable without meaningful voting. 2021
A meaningful reputational system with the potential for retrospective review would let a network rely on fewer nodes, since randomly selected nodes staking their reputation can do the polling work and be reviewed and punished later, which is one reason proof of stake is more efficient than proof of work. 2021
Members should not stake reputation tokens to register an opinion on a contentious topic; strict validation pools should be used only after debate has settled, to verify consensus. 2021
A revolutionary new system of decentralized governance is a precondition for the Web3 vision succeeding, and because efficiency requires stability, the steering mechanisms must be subtle. 2021
Strong unifying values are the institution most essential to the long-term stability of a decentralized organization, and they demand continual reevaluation rather than one-time specification. 2021
Because a single global society is emerging in which everyone is densely interconnected, the more efficient and stable arrangement is power decentralization giving individuals and subgroup DAOs autonomous power, not a single power-centralized hierarchy controlling the whole. 2021
Building secure walls with well-designed doors is the proper way to embody conservative and liberal values together in an economic system: walls protect the group from the Tragedy of the Commons and malicious threats, while doors admit fresh input from anyone willing and able to help. 2021
Overhead institutions that protect or promote essentials should be governed and borne by the group, while those protecting nonessentials should be governed and borne privately, with each DAO deciding for itself what is essential to its function. 2021
Because what counts as essential shifts with the market, a network must not only identify its values but also maintain a dynamic governance process for constantly reinterpreting those values as circumstances change. 2021
Where the line between public and private information falls is a function of a society's values, as the divergence between American, German, and Chinese practice shows. 2021
Drawing a clear formal line between where individual rights stop and social responsibilities start makes the system brittle and unstable by turning that line into a focal point for competition, so the line between the two values must remain vague. 2021
Identifying a network's values is not an academic exercise: values determine goals, goals determine how rewards and punishments are set up, and that reward structure determines the network's future and whether it survives. 2021
Governance design choices must be matched to the network's values, because otherwise the reward structure will dictate the true goals and thereby determine what the network actually values. 2021
A long-term successful network requires a dynamic and responsive governance system that keeps the organization in the decentralized democratic realm and prevents it from moving to the next natural stage of centralized governance with a static hierarchy. 2021
The drift into static power relationships is a universal temptation because centralization is efficient, yet centralized governance is provably flawed. 2021
Poorly executed DAOs exhibit a recognizable cluster of pathologies, including siphoned coins, distracted and robo voters, centralization, DAO washing by founders, and absent decentralized governance, and these pathologies drive mid-term and long-term DAO failure. 2022
Governance by fungible tokens lets whales control a fundraiser DAO, which is antithetical to decentralized governance, and selling purchasable voting power via fungible tokens creates the risk of hostile takeover or looting. 2022
The author contests the myth that DAOs are generally run by scammers: many DAOs and users have indeed fallen victim to rug pulls, but most of those rug pulls trace to the absence of decentralized governance in fundraiser DAOs rather than to DAOs as such. 2022
Most DAOs that suffer unethical behavior and rug pulls are abused by insiders, and this is possible because insiders are not properly governed and hold too much control over the DAO; true decentralized community governance removes insider and council control over keys and code. 2022
Insider rug pulls are not the only exploit path: a DAO can also be attacked from the outside whenever its governance grants voting power through fungible tokens. 2022
The absence of proper decentralized governance built on non-fungible tokens is a key common denominator across DAO failures and rug pulls. 2022
Dispersed, passive token holders cannot defend a DAO: because power in Build Finance DAO was not decentralized, the silent majority of token holders lacked the voting power to block the takeover, after which the attacker minted and sold tokens by draining liquidity pools. 2022
Defending a DAO against attackers and looters, and punishing self-dealing, requires sustainable decentralized governance built on non-fungible tokens rather than tradable voting power. 2022
Governance in most DAOs is severely underdeveloped, which leaves a minority of stakeholders defining governance, and that minority control in turn produces mediocre and poorly developed proposals. 2022
The author rejects the claim that DAOs are ungovernable: the shortcomings are real, but ongoing experimentation with DAO governance designs is gradually identifying workable decentralized governance solutions. 2022
Workable DAO governance should account for reputation with non-fungible tokens or weighted keys rather than fungible tokens, so that voting weight tracks reputation instead of purchasing power. 2022
DAO governance should use a two vote model that distinguishes a loosely coupled vote, where no reputation is at stake, from a tightly coupled vote, where the voter's reputation is at stake. 2022
Reputation in a DAO should be generated only for long term valuable work and for the policing of work, and never for business development work. 2022
Effective human-centric DAO governance is the remedy for rigid smart contract rules that undermine business activities requiring more flexibility in web3 and the metaverse. 2022
The friction generated by anonymous trolling can be mitigated through incentivized reputational architecture governed by protocols the community itself decides on, so anonymity does not have to corrupt DAO governance. 2022
Properly implemented anonymity strengthens decentralized governance because it lets individuals relate without the inherited biases of predecessor generations and a lifetime inside centralized power structures. 2022
True anonymity remains eternally difficult to attain with existing web3 technology, yet anonymity in DAO governance is the holy grail of decentralized web3 business and society. 2022
Braintrust demonstrates that innovation in work structure does not cure governance design: despite redefining work outcomes, it uses a suboptimal one token, one vote model that grants proportional control over network governance. 2022
Microdemocracy combined with proper incentive design can reverse the decreasing voter participation that undermines representative democracies. 2022
The foundation model for token issuance is a core form of centralized top-down governance, and most ICO projects were governed by a small group of individuals rather than by the community at large or a DAO. 2022
The larger the market capitalization controlled by the DAO, the less likely it becomes that whales and insiders can purchase inexpensive tokens on the market. 2022
The more decentralized the governance of a fair launch protocol, the less likely the project will be seen as treating public users unfairly, which makes a decentralized autonomous organization design advisable for fair launch projects. 2022
If the DAO governing a fair launch is controlled by a handful of people in a foundation setting, decentralized governance metrics are less likely to take hold and the public is correspondingly less likely to benefit from decentralized community governance over the launch. 2022
DAO governance built on fungible governance tokens is disfavored and dangerous because governance rights can be bought on open exchanges, whereas non-fungible reputation governance assures the highest levels of decentralization. 2022
Community DAO governance makes any form of rug pull much less likely, because rug pulls typically benefit only a few select individuals who retained control over the project code or liquidity. 2022
DAO governance over token launch wallets can assure that no single individual exercises rights over the token launch wallet and becomes a single point of failure or abuse. 2022
Founders may hold significant influence over DAO votes initially depending on the DAO design, but higher levels of governance decentralization mitigate these centralization effects quickly through the onboarding of new DAO members. 2022
Rug pull practices can take the form of a whale guaranteeing an inside developer or business head a percentage participation if that insider changes the code governing the project to produce an outcome that benefits only the whale and its associates. 2022
Each DAO in the dataset was given a score between zero and ten by the analyzing teams on each of six factors: Decentralization, Work to Earn, Attack Resistance, Regulatory Compliance, Governance, and Organizational Communication. 2023
DAOs in the dataset score well below average on implementing true decentralization, averaging 3.78 out of 10, with the highest score being CRDAO at 8 out of 10 and several DAOs scoring 1 out of 10. 2023
The decentralized power structure is supposed to encourage cooperation, free information flow, and decision-making that escapes top-down hierarchy, but with few exceptions the current state of DAOs does not deliver this. 2023
Governance scores across the studied DAOs average 3.81 out of 10, with only a couple of DAOs scoring 7 or higher and the vast majority scoring 5 or less. 2023
There is no consistent standard for DAO governance, which pushes each DAO to invent its own structure, and because decentralized governance is complex many of those structures fail to become truly decentralized, autonomous, or organized. 2023
Unlike corporate founders, who inherit a known governance template, DAO founders must build a new form of governance from nothing alongside their technology, mission, and values. 2023
Some DAO governance platforms create more risk than they mitigate, and DAOs that are not well governed are doomed to fail. 2023
The most significant risk of bad DAO governance is centralization, in which a small group holds a disproportionate share of power or influence and thereby undermines the decentralized nature of the organization. 2023
Without clear and effective governance mechanisms, DAO decision-making becomes slow and inefficient, delaying important changes and the resolution of internal issues. 2023
DAOs without effective governance structures and policies risk violating local laws and regulations, exposing themselves to legal and regulatory consequences. 2023
One person one vote governance carries the risk of majority tyranny, in which the majority imposes its will on minority groups, and it is unsuited to decisions requiring specialized knowledge. 2023
Quadratic voting remains open to manipulation and strategic voting, and it depends on a robust and transparent voting system to count votes accurately. 2023
Fungible governance tokens expose a DAO to vote buying and other forms of manipulation. 2023
The full potential of DAOs can be realized only if the challenges of standardized governance mechanisms, scalability, and legal frameworks are resolved. 2023
Many DAO platforms accept the idea that they must first build a centralized organization and decentralize later once proper protocols are in place, but this mindset undermines the power and accessibility to ownership that is the foundation of a DAO. 2023
Meaningful accessibility in a DAO is impossible if voting rights and ownership are merely passive purchasable assets, no different from traditional stock. 2023
A reputation system that rewards voting with the majority, as Bridge Mutual uses, can be manipulated by users who create multiple wallets and always vote with the majority. 2023
Locking voted tokens for a period after a vote, as Nexus Mutual does for three days, prevents an attacker from using a flashloan to borrow a large amount of wrapped tokens and swing a vote with significant voting weight. 2023
Requiring governance tokens to be earned through contribution rather than purchased, as GDN DAO does, leaves only minimal risk of 51 percent and sock puppet attacks even under a one token one vote structure. 2023
A DAO built on reputation rather than a fungible token, as CRDAO is, makes the 51 percent attack nearly impossible and renders sock puppet attacks technically possible but of little influence. 2023
Big Green DAO's committee unanimity and closed membership make attacks unlikely, but these same protections come at the expense of the decentralized organization the founders were trying to create. 2023
When only a minority of members, such as Audius node operators, can stake or earn weighted votes, the majority of token holders occupy the same powerless position as an ordinary shareholder in a corporation. 2023
Traditional AI governance frameworks fail because they rely on static, predefined rules that cannot adapt quickly enough to the pace of AI development or to the nuanced challenges AI presents. 2024
Conventional governance methods that are reactive or fixed to ex-post solutions are insufficient for governing technologies whose behavior changes continuously after deployment. 2024
At the time of publication no legacy governance system exists that can supply the dynamic governance toolsets required to govern evolving AI models ex-ante and manage deployed solutions ex-post. 2024
Ex-post governance, which applies regulation only after AI systems are developed and deployed or after large language models have been pretrained on existing proprietary datasets, fails to address risks and biases preemptively. 2024
Recentralization is the central obstacle to using blockchain and distributed ledger technology to govern AI: the recentralizing tendency of these networks interferes with their capacity to deliver effective AI governance. 2024
Blockchain can only deliver decentralized AI governance if the blockchain trilemma is first overcome, since decentralization, security, and scalability cannot readily be achieved simultaneously within one network. 2024
Proof of Stake consensus centralizes control in proportion to the quantity of tokens held, so governance built on such chains is skewed in favor of the wealthy rather than distributed. 2024
When decentralization at the Layer 1 level is compromised, the autonomy of the smart contracts deployed on that chain is compromised by affiliation, so smart contracts are corruptible in the current design and cannot reliably serve as neutral instruments of ethical AI governance. 2024
Decentralized governance structures impose their own costs: with no central authority to coordinate diverse stakeholders, consensus is difficult to reach, negotiations are prolonged, and enforcement of agreements is weak because no single entity is responsible for compliance. 2024
Until the known attack vectors on decentralized autonomous organizations are solved, DAO based AI governance solutions remain suboptimal; these include Sybil attacks, tyranny of the majority, Arrow's impossibility theorem, sockpuppet attacks, and tragedy of the commons. 2024
AI powered DAOs that autonomously generate revenue are especially hard to regulate or dismantle, because the same blockchain security features that protect the organization also make it difficult to intervene once it is operational. 2024
Ex-ante regulation is preferable in principle but is neither practical nor sufficient inside legacy systems, precisely because legacy systems, unlike the web3 system proposed here, are not equipped to create dynamic feedback effects. 2024
Post-deployment monitoring, the standard fallback when ex-ante rules prove inadequate, is typically woefully outdated by the time it is applied because the AI models continue to evolve. 2024
A unified governance framework is hard to establish in the federated model because each participating entity maintains its own AI systems and datasets, producing variation in standards, protocols, and formats. 2024
Transparency and accountability cannot be assured across all participants in a federated governance model because there is no centralized control, and the author declines to advocate centralized control as the remedy; the consequences are biased or unfair AI systems, inadequate privacy protection, and unequal access to AI benefits. 2024
Managing machine learning assets and complying with laws such as GDPR and CCPA becomes significantly harder under decentralized governance, because distributed data and operations complicate tracking data flows, enforcing privacy controls, and demonstrating compliance during audits. 2024
In the proposed system the DAO's forum is an on-chain collection of uniquely identified posts that may cite earlier contributions, and this citation structure is what forms the Weighted Directed Acyclic Graph on which the governance model rests. 2024
Routing proposals through the Forum and then through Validation Pool review is what allows the input parameters and learning data of AI systems to be governed by expert community consensus, because only vetted and consensus backed data and parameters reach AI development. 2024
A decentralized data validation layer applied to pretrained models is efficient but structurally limited: because it cannot drive significant changes to the model's core design or training approach, it leaves the model more attack prone. 2024
Broad community governance of AI training identifies and mitigates bias more effectively than data validation alone, because validation focused approaches can overlook systemic biases already embedded in the pretrained model. 2024
Model 3, web3 community governance combined with decentralized data and the AI model, is the superior of the three governance models compared, because it addresses shortcomings the other two leave in place. 2024
The hybrid model falls short of full community co-governance because it relies on a select group of experts for data validation and therefore may not capture the diverse perspectives and expertise of the broader community. 2024
Ex-post AI governance, in which regulation is applied only after AI systems have been developed and deployed or after large language models have already been pretrained on existing proprietary datasets, falls short of preemptively addressing the risks and biases those systems carry. 2024
Governing AI requires toolsets that simultaneously handle ex-ante governance of models still evolving and ex-post management of deployed solutions, and Kaal asserts that as of publication no legacy system supplies such dynamic governance toolsets. 2024
Kaal advocates an ex-ante governance approach within Web3 frameworks in which community coordinated regulatory measures and oversight mechanisms are set during the development phase of AI technologies rather than imposed after deployment. 2024
Integrating feedback directly into governance processes allows stakeholders to iteratively adjust AI models as new information, operational experience, and changed environments arrive, which mitigates risks and biases more effectively than static ex-post regulatory frameworks. 2024
Although the move toward more explainable, private, and transparent AI is desirable, Kaal argues these regulations paradoxically consolidate power within large technology companies, because only they hold the data resources and infrastructure needed to comply and still ship effective AI. 2024
A critical unsolved challenge for AI governance is bias mitigation, because biases enter inadvertently when algorithms incorporate discriminatory practices carried in the data used for training. 2024
As AI systems come to depend on vast data, personal information is converted from a resource the individual could control and deploy at discretion into a fundamental operational input for AI systems, which increases the potential for misuse and makes it harder for individuals to manage how their data is used. 2024
An immutable blockchain log of transactions and modifications inside AI systems lets stakeholders trace the lineage of an AI decision back to its original data inputs, which makes errors easier to identify and correct. 2024
Smart contracts can automate compliance with regulatory requirements and ethical guidelines: for example, a smart contract can enforce privacy law directly by controlling an AI system's access to personal data according to predefined rules. 2024
In the federated model of AI governance many challenges cannot easily be decentralized, because distinct entities maintain their own AI systems and datasets, producing variation in standards, protocols, and formats that obstructs a unified governance framework. 2024
When decision making power is distributed across multiple entities in a federated model, consensus and cooperation become harder to reach, which makes cohesive AI governance mechanisms difficult to establish. 2024
In a federated model transparency and accountability across all participating entities are hard to ensure precisely because there is no centralized control, and Kaal notes that he does not otherwise advocate such centralized control. 2024
Enforcing AI regulation in a federated model is complex because different entities may interpret the same regulations differently and may show differing levels of commitment to compliance. 2024
Kaal proposes that a more decentralized Web3 model of AI governance can address the failures of the federated model by distributing governance more equitably across network participants, so that no single entity dominates decision making. 2024
Decentralized governance makes privacy compliance harder to demonstrate, because the distributed nature of these systems complicates tracking data flows and enforcing privacy controls, which in turn makes it difficult to prove compliance during audits. 2024
Kaal's proposed answer to the decentralized governance needs of AI is to implement Decentralized Autonomous Organizations that govern AI through expert community consensus. 2024
In the proposed system the DAO forum is an on chain collection of uniquely identified posts that may cite prior contributions, and because citation is directional and non circular the forum itself forms a Weighted Directed Acyclic Graph. 2024
Membership in the proposed DAO is constituted by holding REP tokens, which carry voting rights and a share of DAO revenue, and because validation pools revalue REP dynamically the governance model adapts to the collective decisions of members. 2024
Under the proposed model the input parameters and learning data of AI systems are themselves governed by expert community consensus, through submission of proposals to the Forum and review by Validation Pool, so that only vetted and consensus backed data and parameters enter AI development. 2024
A Weighted Directed Acyclic Graph whose vertices are legal precedents or governance rules and whose directed edges are citations or logical dependencies is the appropriate structure for organizing and navigating the many governance considerations that bear on AI. 2024