{ "failure_mode": "recentralization-drift", "specific_names": [ "Adaptive lag of centralized hierarchy", "Algorithmic autocracy from data control", "Asset-induced centralization", "Blockchain governance centralization", "Brittleness of rigid hierarchy", "Centennial collapse of centralized hierarchy", "Centralization S Curve Decline", "Centralized Decentralization Market", "Centralized Design Inheritance", "Centralized Substrate Ceiling", "Centralized foundation governance", "Centralized market for decentralization services", "Centralizing use of new information technology", "Coherence Bias Toward Centralized Features", "Decentralization cancellation", "Decision-making bottleneck", "Digital Feudalism", "Distorted Decentralization Baseline Lock In", "Donor centralization of problem definition", "Emergency power ratchet", "Fairness versus stability tradeoff", "First Reviewer Anchoring", "First reviewer dominance", "Foreclosed Clarification Loop", "Foundation controlled DAO", "Governance centralization", "Governance model decay in new firms", "Hierarchical filtering drift", "Hierarchy Degrades Review Quality", "Hierarchy degrades review quality", "Inevitable corruption in hierarchies", "Intermediary capture of bounty programs", "Legacy Optimization Trap", "Loss of grassroots autonomy", "Loss of moderating ideal", "Master Node Recentralization of DAOs", "Matthew principle immiseration", "Mining pool recentralization", "Mining power concentration", "Power Migration to Next Constraint", "Profit motive centralization", "Profit-driven recentralization", "Re-centralization drift in DAO governance", "Recentralization of proof of work networks", "Rent seeking intermediation", "Rent-seeking accumulation in inefficiency pockets", "Representation as centralization point", "Representation-induced legal centralization", "Reward Driven Mining Pool Centralization", "Terminal power concentration provoking revolt", "Viewpoint homogenization under centralized power", "architectural recentralization of DEX", "authoritative trust model vulnerability", "benevolent dictator instability", "blockchain recentralization", "brittle-corporate-hierarchy", "centralization-tradeoff", "centralized annotation shortcomings", "centralized single point of failure", "centralized-dependency-nullifies-decentralization", "core developer rule capture", "creeping recentralization of open communities", "creeping-centralization", "curator-bottleneck", "dao-governance-decentralization-tension", "decentralization cancellation", "decentralization-in-name-only", "decentralization-theater", "decentralize-later-fallacy", "delegation floodgate", "developer path dependency", "drift into static power relationships", "enforcer capture of the hierarchy", "fatal-centralization-of-earlier-daos", "final collapse of global hierarchy", "fixed token supply centralization drift", "founder-key-retention", "fungible stake centralization", "hierarchical drift to centralization", "hierarchical path dependency", "hierarchical-ossification", "incomplete FinTech disintermediation", "incomplete decentralization", "incumbent co-option of decentralized technology", "infancy-centralization", "institutional ossification", "institutional-ossification", "internal external mismatch", "leader-single-point-of-failure", "legacy custody rules recentralize decentralized systems", "legacy suboptimality seepage", "legal-wrapper-centralization", "limits-of-centralized-society", "local-coverage-collapse", "misplaced trust in a hierarchical architecture", "monopoly capture of internet infrastructure", "monopoly induced information silos", "nominal decentralization", "p2p-latency-and-incentive-disadvantage", "platform centralization suppressing edge information", "pos-cartel-formation", "proprietary agent enclosure", "proprietary-code-recentralization", "recentralization-through-mining-economies-of-scale", "representation as centralization point", "representation-induced centralization", "residual central aggregator", "residual central client dependency", "residual developer control over DEX code", "security-by-recentralization", "single platform dependence in DeFi", "single-point-of-failure", "smart contract corruptibility by affiliation", "storage-growth-centralization", "store-of-value-recentralization", "unelected council veto", "unfulfilled decentralized internet vision", "unrealized-decentralization-benefit", "value transferability drives centralization", "value-driven-recentralization", "wasted-decentralization" ], "count": 123, "claims": [ { "id": "kaal:claim:2992962-031", "url": "https://wulfkaal.github.io/claims/2992962-031", "claim": "As blockchain use grows, node operation will eventually require special equipment affordable only by large corporations in the existing legal infrastructure, creating the possibility of dangerous centralization and a threat to anonymity.", "specific_name": "storage-growth-centralization", "conditions": [ "blockchains with eternal storage and rapidly growing size" ], "source": "Crypto Transaction Dispute Resolution", "year": "2017", "quote": "which will eventually require special equipment that can only be afforded by large corporations in the existing legal infrastructure. With such power for large corporations comes the possibility of dangerous centralization and a threat to undermining anonymity.", "citation": "Wulf A. Kaal, Craig Calcaterra, Crypto Transaction Dispute Resolution (2017). SSRN: https://ssrn.com/abstract=2992962" }, { "id": "kaal:claim:3128900-035", "url": "https://wulfkaal.github.io/claims/3128900-035", "claim": "Centralized mechanical turk marketplace leaders operate as rent seeking intermediaries that generate numerous inefficiencies in the market and deprive freelance workers of a share in the profits the platforms capture.", "specific_name": "Rent seeking intermediation", "conditions": [ "centralized micro task marketplaces including MTurk and Crowdflower" ], "source": "Decentralized Mechanical Turk Through Verified Reputation", "year": "2018", "quote": "Similarly, centralized mechanical turk marketplace leaders act as rent seeking intermediaries that create numerous inefficiencies in the market.", "citation": "Wulf A. Kaal, Decentralized Mechanical Turk Through Verified Reputation (2018). SSRN: https://ssrn.com/abstract=3128900" }, { "id": "kaal:claim:3227967-017", "url": "https://wulfkaal.github.io/claims/3227967-017", "claim": "Many new innovation driven firms that replaced hierarchy with a best-idea-wins culture have struggled to maintain that governance model and to fulfill their initial promise.", "specific_name": "Governance model decay in new firms", "conditions": [ "fast growth technology companies with few assets and employees" ], "source": "Legal Education in a Digital Age Why 'Coding for Lawyers' Matters", "year": "2018", "quote": "Significantly, however, many such \"new\" firms have often struggled to maintain this new governance model and fulfill their initial promise.", "citation": "Mark Fenwick, Wulf A. Kaal, Erik P.M. Vermeulen, Legal Education in a Digital Age Why 'Coding for Lawyers' Matters (2018). SSRN: https://ssrn.com/abstract=3227967" }, { "id": "kaal:claim:3227967-032", "url": "https://wulfkaal.github.io/claims/3227967-032", "claim": "Existing blockchains and DAOs still lack genuine decentralization, and there are currently no true DAOs: Bitcoin's proof of work protocol has produced mining pools because of economies of scale and unbalanced reward structures.", "specific_name": "Recentralization of proof of work networks", "conditions": [ "proof of work blockchains as of 2018" ], "source": "Legal Education in a Digital Age Why 'Coding for Lawyers' Matters", "year": "2018", "quote": "In our discussion, the following weaknesses were highlighted. There is still a lack of decentralization (there are currently no \"true\" DAOs). For instance, Bitcoin's proof of work protocol has led to \"mining pools\" because of economies of scale and unbalanced reward structures.", "citation": "Mark Fenwick, Wulf A. Kaal, Erik P.M. Vermeulen, Legal Education in a Digital Age Why 'Coding for Lawyers' Matters (2018). SSRN: https://ssrn.com/abstract=3227967" }, { "id": "kaal:claim:3266953-005", "url": "https://wulfkaal.github.io/claims/3266953-005", "claim": "Today's internet is designed for hierarchical societal structures on an underlying authoritative trust model, and that traditional hierarchical trust model carries many inefficiencies including serious cyber security vulnerabilities.", "specific_name": "authoritative trust model vulnerability", "conditions": [], "source": "Reputation Protocol for the Internet of Trust - Conceptual Whitepaper", "year": "2018", "quote": "Worse yet, today's internet is designed for hierarchical societal structures and with an underlying authoritative trust model. Many inefficiencies are associated with the traditional hierarchical trust model including serious cyber security vulnerabilities.", "citation": "Craig Calcaterra, Wulf A. Kaal, Gopinath Sivalingam, Reputation Protocol for the Internet of Trust - Conceptual Whitepaper (2018). SSRN: https://ssrn.com/abstract=3266953" }, { "id": "kaal:claim:3266953-012", "url": "https://wulfkaal.github.io/claims/3266953-012", "claim": "Because power exercised over a store of value inevitably produces economies of scale, cryptocurrencies and any other transferable store of value drive networks toward centralization.", "specific_name": "value transferability drives centralization", "conditions": [ "any fungible store of value, not only cryptocurrencies" ], "source": "Reputation Protocol for the Internet of Trust - Conceptual Whitepaper", "year": "2018", "quote": "Because of the store of value entailed in cryptocurrencies (and really any currencies or store of value), exercise of power over such value inevitably leads to centralization due to economies of scale.", "citation": "Craig Calcaterra, Wulf A. Kaal, Gopinath Sivalingam, Reputation Protocol for the Internet of Trust - Conceptual Whitepaper (2018). SSRN: https://ssrn.com/abstract=3266953" }, { "id": "kaal:claim:3266953-020", "url": "https://wulfkaal.github.io/claims/3266953-020", "claim": "The fungibility of the staked currency is the main point of attack against proof of stake and leads inevitably to centralization.", "specific_name": "fungible stake centralization", "conditions": [ "proof of stake consensus using fungible currency" ], "source": "Reputation Protocol for the Internet of Trust - Conceptual Whitepaper", "year": "2018", "quote": "The fungibility of currency is the main point of attacks on PoS and leads inevitably to centralization.", "citation": "Craig Calcaterra, Wulf A. Kaal, Gopinath Sivalingam, Reputation Protocol for the Internet of Trust - Conceptual Whitepaper (2018). SSRN: https://ssrn.com/abstract=3266953" }, { "id": "kaal:claim:3125827-009", "url": "https://wulfkaal.github.io/claims/3125827-009", "claim": "Even though proof of stake mitigates the economy of scale advantage, block production cartels can still arise in PoS systems through lotteries, through built in voting delegations, or because the stakes required to be a block producer can simply be bought.", "specific_name": "pos-cartel-formation", "conditions": [ "PoS systems that use lotteries, delegation, or purchasable stakes" ], "source": "Secure Proof of Stake Protocol", "year": "2018", "quote": "However, block production cartels may still arise due to lotteries, or the fact that voting delegations are built into the system, or the fact that the stakes needed to be a block producer may be bought", "citation": "Craig Calcaterra, Wulf A. Kaal, Secure Proof of Stake Protocol (2018). SSRN: https://ssrn.com/abstract=3125827" }, { "id": "kaal:claim:3227933-003", "url": "https://wulfkaal.github.io/claims/3227933-003", "claim": "Centralized, hierarchical organizations fail on two fronts in a fast changing environment: they adapt too slowly to changing reality and they are losing public trust.", "specific_name": "Adaptive lag of centralized hierarchy", "conditions": [ "fast-changing reality" ], "source": "Why 'Blockchain' Will Disrupt Corporate Organizations", "year": "2018", "quote": "Most obviously, such organizations are slow to adapt to a fast-changing reality and are losing public trust.", "citation": "Mark Fenwick, Wulf A. Kaal, Erik P.M. Vermeulen, Why 'Blockchain' Will Disrupt Corporate Organizations (2018). SSRN: https://ssrn.com/abstract=3227933" }, { "id": "kaal:claim:3227933-019", "url": "https://wulfkaal.github.io/claims/3227933-019", "claim": "Most current blockchain applications lack complete decentralization: proof of work style validation has produced mining pools because of economies of scale and unbalanced reward structures.", "specific_name": "Mining pool recentralization", "conditions": [ "proof of work validation mechanisms" ], "source": "Why 'Blockchain' Will Disrupt Corporate Organizations", "year": "2018", "quote": "For instance, the traditional mechanism for validating and verifying a new block of transactions – e.g., Bitcoin's proof of work protocol - has led to \"mining pools\" as a result of economies of scale and unbalanced reward structures.", "citation": "Mark Fenwick, Wulf A. Kaal, Erik P.M. Vermeulen, Why 'Blockchain' Will Disrupt Corporate Organizations (2018). SSRN: https://ssrn.com/abstract=3227933" }, { "id": "kaal:claim:3441904-015", "url": "https://wulfkaal.github.io/claims/3441904-015", "claim": "Curators were the core point of centralization in the original 2016 DAO because the smart contract could not on its own distinguish real from fake proposals, leaving curators with approval and vote prioritization power before any community vote.", "specific_name": "curator-bottleneck", "conditions": [ "the original 2016 DAO curator whitelist design" ], "source": "Blockchain-Based Corporate Governance", "year": "2019", "quote": "Because the smart contract on its own could not distinguish real from fake proposals, the curators had approval power and vote prioritization power over contractor proposals before the proposals were put up to a DAO community vote.", "citation": "Wulf A. Kaal, Blockchain-Based Corporate Governance (2019). SSRN: https://ssrn.com/abstract=3441904" }, { "id": "kaal:claim:3406323-023", "url": "https://wulfkaal.github.io/claims/3406323-023", "claim": "Because cryptocurrencies embody a transferable store of value, the exercise of power over that value inevitably leads back to centralization through economies of scale, creating core points of attack that undermine the very nature of decentralization.", "specific_name": "store-of-value-recentralization", "conditions": [ "any currency or transferable store of value, not only cryptocurrencies" ], "source": "Decentralization - A Primer on the New Economy", "year": "2019", "quote": "Because of the store of value entailed in cryptocurrencies (and really any currencies or store of value), exercise of power over such value inevitably leads to centralization due to economies of scale.", "citation": "Wulf A. Kaal, Decentralization - A Primer on the New Economy (2019). SSRN: https://ssrn.com/abstract=3406323" }, { "id": "kaal:claim:3411897-022", "url": "https://wulfkaal.github.io/claims/3411897-022", "claim": "DAOs are in their infancy and cannot currently overcome core governance problems while maintaining a decentralized structure; the two objectives are, as of 2019, in tension.", "specific_name": "dao-governance-decentralization-tension", "conditions": [ "state of DAO technology as of 2019" ], "source": "Decentralization - Past, Present, and Future", "year": "2019", "quote": "DAOs are in their infancy and cannot currently overcome core governance problems while maintaining a decentralized structure.", "citation": "Wulf A. Kaal, Decentralization - Past, Present, and Future (2019). SSRN: https://ssrn.com/abstract=3411897" }, { "id": "kaal:claim:3411897-028", "url": "https://wulfkaal.github.io/claims/3411897-028", "claim": "Because cryptocurrencies embody a transferable store of value, the exercise of power over that value inevitably leads to centralization through economies of scale, which creates core points of attack and undermines the very nature of decentralization.", "specific_name": "store-of-value-recentralization", "conditions": [ "applies to any currency or transferable store of value, not only cryptocurrencies" ], "source": "Decentralization - Past, Present, and Future", "year": "2019", "quote": "Because of the store of value entailed in cryptocurrencies (and really any currencies or store of value), exercise of power over such value inevitably leads to centralization due to economies of scale.", "citation": "Wulf A. Kaal, Decentralization - Past, Present, and Future (2019). SSRN: https://ssrn.com/abstract=3411897" }, { "id": "kaal:claim:3405401-023", "url": "https://wulfkaal.github.io/claims/3405401-023", "claim": "Because cryptocurrencies, like any currency or store of value, entail transferable value, the exercise of power over that value inevitably leads to centralization through economies of scale.", "specific_name": "value-driven-recentralization", "conditions": [ "any transferable store of value, including fiat currencies" ], "source": "Decentralized Commerce – A Primer on Why Decentralized Reputation Verification Systems Are Needed", "year": "2019", "quote": "Because of the store of value entailed in cryptocurrencies (and really any currencies or store of value), exercise of power over such value inevitably leads to centralization due to economies of scale.", "citation": "Wulf A. Kaal, Decentralized Commerce – A Primer on Why Decentralized Reputation Verification Systems Are Needed (2019). SSRN: https://ssrn.com/abstract=3405401" }, { "id": "kaal:claim:3652481-001", "url": "https://wulfkaal.github.io/claims/3652481-001", "claim": "Tying a DAO's legal existence to an existing legal and jurisdictional framework typically forces the DAO to appoint a representative in that jurisdiction, and that representative centralizes the DAO, which causes the DAO concept itself to fail.", "specific_name": "representation-induced centralization", "conditions": [ "the chosen jurisdiction requires local legal representation" ], "source": "Decentralized Autonomous Organizations – Internal Governance and External Legal Design", "year": "2020", "quote": "Tying the legal existence of a DAO to any forms of existing legal and jurisdictional frameworks typically results in the need for a representative in the chosen legal framework and jurisdiction, which, in turn, centralizes the DAO and results in the failure of the DAO concept.", "citation": "Wulf A. Kaal, Decentralized Autonomous Organizations – Internal Governance and External Legal Design (2020). SSRN: https://ssrn.com/abstract=3652481" }, { "id": "kaal:claim:3652481-008", "url": "https://wulfkaal.github.io/claims/3652481-008", "claim": "Absent continual effort to maintain decentralized order, the very values that initially unite DAO members tend to produce ever tighter and more complex hierarchical structures inside the DAO, ending in a fully centralized tree structure.", "specific_name": "hierarchical drift to centralization", "conditions": [ "no ongoing effort is made to preserve decentralized order" ], "source": "Decentralized Autonomous Organizations – Internal Governance and External Legal Design", "year": "2020", "quote": "Without continual efforts to maintain decentralized order, values that initially unite DAO members have a tendency to result in ever tighter and complex hierarchical structures in the DAO.", "citation": "Wulf A. Kaal, Decentralized Autonomous Organizations – Internal Governance and External Legal Design (2020). SSRN: https://ssrn.com/abstract=3652481" }, { "id": "kaal:claim:3652481-011", "url": "https://wulfkaal.github.io/claims/3652481-011", "claim": "DAO developers are themselves subject to path dependencies that undermine the evolution of decentralized DAO designs, because the communication structures of the developing organization invariably shape future designs.", "specific_name": "developer path dependency", "conditions": [], "source": "Decentralized Autonomous Organizations – Internal Governance and External Legal Design", "year": "2020", "quote": "DAO developers are also subject to path dependencies which undermines the evolution of decentralized DAO designs. The communication structures in organizations will invariably influence future designs.", "citation": "Wulf A. Kaal, Decentralized Autonomous Organizations – Internal Governance and External Legal Design (2020). SSRN: https://ssrn.com/abstract=3652481" }, { "id": "kaal:claim:3652481-023", "url": "https://wulfkaal.github.io/claims/3652481-023", "claim": "Existing legal solutions for DAOs typically require some form of legal representation in the relevant jurisdiction, and jurisdictional requirements pertaining to legal representation are always a point of centralization.", "specific_name": "representation as centralization point", "conditions": [], "source": "Decentralized Autonomous Organizations – Internal Governance and External Legal Design", "year": "2020", "quote": "Existing legal solutions for DAOs typically require forms of legal representation in the respective jurisdiction. Jurisdictional requirements pertaining to legal representation are always a point of centralization.", "citation": "Wulf A. Kaal, Decentralized Autonomous Organizations – Internal Governance and External Legal Design (2020). SSRN: https://ssrn.com/abstract=3652481" }, { "id": "kaal:claim:3652481-034", "url": "https://wulfkaal.github.io/claims/3652481-034", "claim": "Where a DAO's internal voting mechanism is centralized and burdened with legacy voting problems, any higher degree of decentralization achieved in its external legal design will typically be cancelled out over the long run.", "specific_name": "decentralization cancellation", "conditions": [ "the internal voting mechanism is centralized or uses legacy voting designs" ], "source": "Decentralized Autonomous Organizations – Internal Governance and External Legal Design", "year": "2020", "quote": "For many attempts to create legal solutions, if the internal voting mechanism of a DAO is more centralized and afflicted with existing legacy voting issues, a higher degree of decentralization in the external legal design will typically be cancelled out in the long run.", "citation": "Wulf A. Kaal, Decentralized Autonomous Organizations – Internal Governance and External Legal Design (2020). SSRN: https://ssrn.com/abstract=3652481" }, { "id": "kaal:claim:3652481-035", "url": "https://wulfkaal.github.io/claims/3652481-035", "claim": "When the degrees of internal and external governance decentralization cancel each other out, the DAO is less likely to succeed in its decentralization attempt and correspondingly more likely to fail.", "specific_name": "internal external mismatch", "conditions": [], "source": "Decentralized Autonomous Organizations – Internal Governance and External Legal Design", "year": "2020", "quote": "If the degrees of internal and external governance decentralization cancel each other out, the respective DAO is less likely to succeed in its decentralization attempt, which in turn makes it more likely for the DAO to fail.", "citation": "Wulf A. Kaal, Decentralized Autonomous Organizations – Internal Governance and External Legal Design (2020). SSRN: https://ssrn.com/abstract=3652481" }, { "id": "kaal:claim:3606663-026", "url": "https://wulfkaal.github.io/claims/3606663-026", "claim": "Centralized financial technology does not complete the disintermediation it promises, because users still deal with a technology company as intermediary instead of a financial institution, which leaves room for the decentralized solutions DeFi attempts to provide.", "specific_name": "incomplete FinTech disintermediation", "conditions": [ "centralized FinTech platforms", "peer to peer transaction settings" ], "source": "Digital Asset Market Evolution", "year": "2020", "quote": "In existing centralized forms of financial technology disintermediation users are still dealing with a technology company as intermediary instead of a financial institution.286 Accordingly, centralized financial technology disintermediation is incomplete and allows for further improvements.", "citation": "Kaal, Digital Asset Market Evolution (2020). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3606663" }, { "id": "kaal:claim:3606663-028", "url": "https://wulfkaal.github.io/claims/3606663-028", "claim": "DeFi's decentralization remains theoretical in one important respect: as of the early 2020s DeFi is still largely relegated to one dominant platform, with 87 percent of all publicly funded DeFi projects built on Ethereum.", "specific_name": "single platform dependence in DeFi", "conditions": [ "publicly funded DeFi projects", "beginning of the 2020s" ], "source": "Digital Asset Market Evolution", "year": "2020", "quote": "At the beginning of the 2020s, DeFi is still largely relegated to the use of one dominant platform. 87% of all publicly funded DeFi projects have been built on Ethereum.", "citation": "Kaal, Digital Asset Market Evolution (2020). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3606663" }, { "id": "kaal:claim:3799320-001", "url": "https://wulfkaal.github.io/claims/3799320-001", "claim": "The concept of a DAO fails if it becomes centralized, and centralization in governance is the largest single threat to a DAO.", "specific_name": "Governance centralization", "conditions": [], "source": "A Decentralized Autonomous Organization (DAO) of DAOs", "year": "2021", "quote": "The concept of a DAO fails if it becomes centralized. Centralization is omnipresent in computing systems, economics, and society at large. Yet centralization in governance is perhaps the largest threat to a DAO.", "citation": "Wulf A. Kaal, A Decentralized Autonomous Organization (DAO) of DAOs (2021). SSRN: https://ssrn.com/abstract=3799320" }, { "id": "kaal:claim:3799320-003", "url": "https://wulfkaal.github.io/claims/3799320-003", "claim": "Tying a DAO's legal existence to existing legal and jurisdictional frameworks typically requires a representative in the chosen jurisdiction, which centralizes the DAO and results in the failure of the DAO concept.", "specific_name": "Representation-induced legal centralization", "conditions": [ "DAO anchored in an existing jurisdiction", "frameworks that require local representation" ], "source": "A Decentralized Autonomous Organization (DAO) of DAOs", "year": "2021", "quote": "Tying the legal existence of a DAO to any forms of existing legal and jurisdictional frameworks typically results in the need for a representative in the chosen legal framework and jurisdiction, which, in turn, centralizes the DAO and results in the failure of the DAO concept.", "citation": "Wulf A. Kaal, A Decentralized Autonomous Organization (DAO) of DAOs (2021). SSRN: https://ssrn.com/abstract=3799320" }, { "id": "kaal:claim:3799320-017", "url": "https://wulfkaal.github.io/claims/3799320-017", "claim": "Existing legal solutions for DAOs typically require some form of legal representation in the relevant jurisdiction, and such representation is always a point of centralization.", "specific_name": "Representation as centralization point", "conditions": [ "current legal wrappers available to DAOs" ], "source": "A Decentralized Autonomous Organization (DAO) of DAOs", "year": "2021", "quote": "Existing legal solutions for DAOs typically require forms of legal representation in the respective jurisdiction, which are always a point of centralization.", "citation": "Wulf A. Kaal, A Decentralized Autonomous Organization (DAO) of DAOs (2021). SSRN: https://ssrn.com/abstract=3799320" }, { "id": "kaal:claim:3799320-022", "url": "https://wulfkaal.github.io/claims/3799320-022", "claim": "Without continual effort to maintain decentralized order, the values that initially unite DAO members tend to produce ever tighter and more complex hierarchical structures inside the DAO.", "specific_name": "Hierarchical filtering drift", "conditions": [ "absence of continual decentralization maintenance" ], "source": "A Decentralized Autonomous Organization (DAO) of DAOs", "year": "2021", "quote": "Without continual efforts to maintain decentralized order, values that initially unite DAO members have a tendency to result in ever tighter and complex hierarchical structures in the DAO.", "citation": "Wulf A. Kaal, A Decentralized Autonomous Organization (DAO) of DAOs (2021). SSRN: https://ssrn.com/abstract=3799320" }, { "id": "kaal:claim:3799320-023", "url": "https://wulfkaal.github.io/claims/3799320-023", "claim": "If a DAO's internal voting mechanism is more centralized and carries legacy voting problems, a higher degree of decentralization in its external legal design will typically be canceled out in the long run.", "specific_name": "Decentralization cancellation", "conditions": [ "DAOs pairing centralized internal voting with a decentralized legal design" ], "source": "A Decentralized Autonomous Organization (DAO) of DAOs", "year": "2021", "quote": "if the internal voting mechanism of a DAO is more centralized and afflicted with existing legacy voting issues, a higher degree of decentralization in the external legal design will typically be canceled out in the long run.", "citation": "Wulf A. Kaal, A Decentralized Autonomous Organization (DAO) of DAOs (2021). SSRN: https://ssrn.com/abstract=3799320" }, { "id": "kaal:claim:3782198-015", "url": "https://wulfkaal.github.io/claims/3782198-015", "claim": "If any single person could own the copyright to software that a decentralized organization uses, that person would hold de facto power over the organization, re establishing hierarchies of power inside it.", "specific_name": "proprietary-code-recentralization", "conditions": [ "applies where proprietary code is embedded in a decentralized organization's stack" ], "source": "Contemporary Decentralization", "year": "2021", "quote": "If one person could own the copyright to some of the software a decentralized organization uses, then they would have de facto power over the organization, again establishing hierarchies of power within the organization.", "citation": "Craig Calcaterra, Wulf A. Kaal, Contemporary Decentralization (2021). SSRN: https://ssrn.com/abstract=3782198" }, { "id": "kaal:claim:3782198-021", "url": "https://wulfkaal.github.io/claims/3782198-021", "claim": "Earlier centralized companies defeated more decentralized peer to peer platforms because of the technology of the time and the incentive design built into capitalist civilization: consumer devices could not match industrial upload speeds, centralized firms had the incentive to polish user interfaces, and economies of scale made central bureaucracy worth negotiating.", "specific_name": "p2p-latency-and-incentive-disadvantage", "conditions": [ "describes the competitive conditions of the early internet era" ], "source": "Contemporary Decentralization", "year": "2021", "quote": "The reason earlier centralized companies succeeded against more decentralized P)P platforms is due to the existing technology of the time and the natural incentive design that is built into our capitalist civilization.", "citation": "Craig Calcaterra, Wulf A. Kaal, Contemporary Decentralization (2021). SSRN: https://ssrn.com/abstract=3782198" }, { "id": "kaal:claim:3782198-024", "url": "https://wulfkaal.github.io/claims/3782198-024", "claim": "Bitcoin proved that a decentralized peer to peer network can manage valuable assets without a central authority, but the centralizing force of competition concentrated power anyway, as economies of scale produced large mining farms in place of millions of individual members maintaining the ledger.", "specific_name": "recentralization-through-mining-economies-of-scale", "conditions": [ "applies to proof of work networks where mining rewards create economies of scale" ], "source": "Contemporary Decentralization", "year": "2021", "quote": "But the centralizing forces of competition led to concentration of power in the Bitcoin network, as econo- mies of scale led to large computer farms devoted to mining for bitcoins, instead of millions of individual network members maintaining the ledger on their laptops.", "citation": "Craig Calcaterra, Wulf A. Kaal, Contemporary Decentralization (2021). SSRN: https://ssrn.com/abstract=3782198" }, { "id": "kaal:claim:3936876-038", "url": "https://wulfkaal.github.io/claims/3936876-038", "claim": "Applying current legacy custody rules developed for traditional assets to digital assets is inconsistent with the foundations of decentralization, because the very nature of a decentralized system mandates the avoidance and eradication of intermediaries for business transactions.", "specific_name": "legacy custody rules recentralize decentralized systems", "conditions": [ "viewed from the perspective of decentralization" ], "source": "Custody of Digital Assets", "year": "2021", "quote": "From the perspective of decentralization, the application of current legacy rules around custody of traditional assets is inconsistent with decentralization foundations.", "citation": "Wulf A. Kaal, Hayley Howe, Custody of Digital Assets (2021). SSRN: https://ssrn.com/abstract=3936876" }, { "id": "kaal:claim:3936876-039", "url": "https://wulfkaal.github.io/claims/3936876-039", "claim": "Where owners do not rely on the cryptography of the wallet and of each transaction to avoid trusted third parties, single points of failure, rent seeking behaviors and other suboptimal outcomes of legacy systems inevitably seep back into decentralized solutions.", "specific_name": "legacy suboptimality seepage", "conditions": [ "decentralized systems that reintroduce trusted third parties" ], "source": "Custody of Digital Assets", "year": "2021", "quote": "Without it, single points of failure, rent- seeking behaviors and other suboptimal outcomes of legacy systems are inevitably seeping back into decentralized solutions.", "citation": "Wulf A. Kaal, Hayley Howe, Custody of Digital Assets (2021). SSRN: https://ssrn.com/abstract=3936876" }, { "id": "kaal:claim:3936876-040", "url": "https://wulfkaal.github.io/claims/3936876-040", "claim": "Delegation of rights to custody providers is only an incremental step toward centralization via delegation to third party investment managers, and it opens a floodgate because each additional level of investment discretion over digital assets exacerbates centralization concerns and compounds rent seeking suboptimalities.", "specific_name": "delegation floodgate", "conditions": [ "delegation chains that begin with custody and extend to discretionary management" ], "source": "Custody of Digital Assets", "year": "2021", "quote": "This becomes a floodgate issue, as each level of investment discretion over digital assets exacerbates the centralization concerns and compounds the rent seeking suboptimalities.", "citation": "Wulf A. Kaal, Hayley Howe, Custody of Digital Assets (2021). SSRN: https://ssrn.com/abstract=3936876" }, { "id": "kaal:claim:3808852-011", "url": "https://wulfkaal.github.io/claims/3808852-011", "claim": "Societal path dependencies toward hierarchy and top-down command and control impose significant obstacles on organizational decentralization, hindering the transition of power from governments and large hierarchical organizations to the edges.", "specific_name": "hierarchical path dependency", "conditions": [], "source": "Decentralization and Feedback Effects", "year": "2021", "quote": "Because of these societal path dependencies, organizational decentralization is subject to significant obstacles that hinder the transition of power from governments and large hierarchical organizations to the edges.", "citation": "Wulf A. Kaal, Decentralization and Feedback Effects (2021). SSRN: https://ssrn.com/abstract=3808852" }, { "id": "kaal:claim:3808852-017", "url": "https://wulfkaal.github.io/claims/3808852-017", "claim": "DAO developers are subject to path dependencies that undermine the evolution of decentralized DAO designs, because the communication structures of the organizations that design systems invariably shape future designs.", "specific_name": "developer path dependency", "conditions": [], "source": "Decentralization and Feedback Effects", "year": "2021", "quote": "DAO developers are also subject to path dependencies which undermine the evolution of decentralized DAO designs. The communication structures in organizations will invariably influence future designs.11", "citation": "Wulf A. Kaal, Decentralization and Feedback Effects (2021). SSRN: https://ssrn.com/abstract=3808852" }, { "id": "kaal:claim:3808852-026", "url": "https://wulfkaal.github.io/claims/3808852-026", "claim": "A decentralized exchange can be seen as architecturally centralized, because the DEX code and its operational rules in effect create the exchange and provide a central order exchange and price discovery function rather than a peer-to-peer exchange.", "specific_name": "architectural recentralization of DEX", "conditions": [ "applies to DEX whose operational rules are set by code" ], "source": "Decentralization and Feedback Effects", "year": "2021", "quote": "Architecturally, DEX can be seen as centralized because the DEX code and the operational rules of the DEX code in effect create the exchange and facilitate a central order exchange function and price discovery, not a peer-to-peer exchange.", "citation": "Wulf A. Kaal, Decentralization and Feedback Effects (2021). SSRN: https://ssrn.com/abstract=3808852" }, { "id": "kaal:claim:3808852-027", "url": "https://wulfkaal.github.io/claims/3808852-027", "claim": "Even though the creator of a DEX plays a limited role in its evolution, the code that provides the exchange's operational rules may still be subject to the centralized control of certain developers, and a completely open source DEX with no ongoing developer involvement remains untested.", "specific_name": "residual developer control over DEX code", "conditions": [], "source": "Decentralization and Feedback Effects", "year": "2021", "quote": "the code that provides the operational rules of the exchange may still be subject to the centralized control of certain developers. The idea of a completely open source DEX without any ongoing developer involvement remains untested.", "citation": "Wulf A. Kaal, Decentralization and Feedback Effects (2021). SSRN: https://ssrn.com/abstract=3808852" }, { "id": "kaal:claim:3808852-043", "url": "https://wulfkaal.github.io/claims/3808852-043", "claim": "The founders' initial vision of a truly decentralized internet without central points of failure could not be fulfilled, which is why internet idealists continue to seek technological ways to re-decentralize the internet.", "specific_name": "unfulfilled decentralized internet vision", "conditions": [], "source": "Decentralization and Feedback Effects", "year": "2021", "quote": "Because the initial vision of the founders of the internet, to create a truly decentralized network without central points of failure, could not be fulfilled, the community of internet idealists has been seeking technological ways to decentralize the internet.", "citation": "Wulf A. Kaal, Decentralization and Feedback Effects (2021). SSRN: https://ssrn.com/abstract=3808852" }, { "id": "kaal:claim:3808873-008", "url": "https://wulfkaal.github.io/claims/3808873-008", "claim": "Proof of Work block rewards structurally reintroduce centralization: the economic nature of mining rewards incentivizes degrees of centralization through collective action of nodes that share rewards as a group, that is, mining pools.", "specific_name": "Reward Driven Mining Pool Centralization", "conditions": [ "Proof of Work consensus with block rewards", "Bitcoin in the early 2020s" ], "source": "Decentralization Neutralizers", "year": "2021", "quote": "The economic nature of these rewards incentivizes degrees of centralization in collective action of nodes that share in the mining rewards as a group, so called mining pools.", "citation": "Wulf A. Kaal, Decentralization Neutralizers (2021). SSRN: https://ssrn.com/abstract=3808873" }, { "id": "kaal:claim:3808873-009", "url": "https://wulfkaal.github.io/claims/3808873-009", "claim": "Early stage consensus designs such as PoW, PoS and DPoS create a community belief system in certain foundational technology features that in effect inhibits higher degrees of decentralization, so suboptimal early decentralization becomes self perpetuating.", "specific_name": "Distorted Decentralization Baseline Lock In", "conditions": [ "early stage decentralized technologies such as PoW, PoS and DPoS" ], "source": "Decentralization Neutralizers", "year": "2021", "quote": "For example, PoW, PoS, and DPoS, among others, create a community believe system in certain foundational technology features that in effect inhibit higher degrees of decentralization in technology.", "citation": "Wulf A. Kaal, Decentralization Neutralizers (2021). SSRN: https://ssrn.com/abstract=3808873" }, { "id": "kaal:claim:3808873-010", "url": "https://wulfkaal.github.io/claims/3808873-010", "claim": "The decentralization of network technology is capped by its host environment: decentralized systems are built on and confined by the internet, which is decentralized in its foundation but has a centralized order structure.", "specific_name": "Centralized Substrate Ceiling", "conditions": [ "decentralized systems built on existing internet infrastructure" ], "source": "Decentralization Neutralizers", "year": "2021", "quote": "The decentralization of network technology is limited because it operates in an environment of centralized technology. The internet, while in its foundation decentralized, has a centralized order structure.", "citation": "Wulf A. Kaal, Decentralization Neutralizers (2021). SSRN: https://ssrn.com/abstract=3808873" }, { "id": "kaal:claim:3808873-011", "url": "https://wulfkaal.github.io/claims/3808873-011", "claim": "Centralization follows an S curve: in the expansion phase the benefits of centralizing power, capital and control rise faster than its costs, but in the decline phase the rising costs of centralization, including corruption, diseconomies of scale and cronyism, can no longer be offset, so centralized systems function less optimally and less efficiently.", "specific_name": "Centralization S Curve Decline", "conditions": [ "centralized systems in business and society over their life cycle" ], "source": "Decentralization Neutralizers", "year": "2021", "quote": "Because of the increase in the cost of centralization, the benefits of centralization can no longer offset and outweigh the cost. As a result, centralized systems function less optimally and less efficiently.", "citation": "Wulf A. Kaal, Decentralization Neutralizers (2021). SSRN: https://ssrn.com/abstract=3808873" }, { "id": "kaal:claim:3808873-013", "url": "https://wulfkaal.github.io/claims/3808873-013", "claim": "Applying decentralized technology to optimize a legacy system, for example using blockchain to improve the malfunctioning shareholder proxy voting process, perpetuates the outdated and malfunctioning centralized system rather than replacing it with a better performing decentralized one.", "specific_name": "Legacy Optimization Trap", "conditions": [ "decentralized technology deployed as an optimization layer on centralized legacy processes" ], "source": "Decentralization Neutralizers", "year": "2021", "quote": "In the process, the outdated and malfunctioning centralized legacy systems are being perpetuated rather than being replaced with better performing decentralized systems.", "citation": "Wulf A. Kaal, Decentralization Neutralizers (2021). SSRN: https://ssrn.com/abstract=3808873" }, { "id": "kaal:claim:3808873-014", "url": "https://wulfkaal.github.io/claims/3808873-014", "claim": "Decentralized system design is itself path dependent on the centralized past: designers' prior experience in centralized structures infiltrates and undermines attempts to create more decentralized systems, through subconscious processes the designer cannot change or influence.", "specific_name": "Centralized Design Inheritance", "conditions": [ "human designers socialized and educated in centralized cultures" ], "source": "Decentralization Neutralizers", "year": "2021", "quote": "The design of decentralized systems is subject to path dependencies that originate from the centralized past. Humans' past experience in centralized structures infiltrate and undermine attempts to create more decentralized system.", "citation": "Wulf A. Kaal, Decentralization Neutralizers (2021). SSRN: https://ssrn.com/abstract=3808873" }, { "id": "kaal:claim:3808873-015", "url": "https://wulfkaal.github.io/claims/3808873-015", "claim": "Unintentional methodologically centralized design features in complex decentralized systems are inevitable, because human brains naturally simplify complex systems for the sake of coherence and designers therefore reach for centralized features that increase coherence.", "specific_name": "Coherence Bias Toward Centralized Features", "conditions": [ "complex adaptive decentralized systems designed by humans" ], "source": "Decentralization Neutralizers", "year": "2021", "quote": "Unintentional methodologically centralized design features in complex decentralized systems are inevitable.", "citation": "Wulf A. Kaal, Decentralization Neutralizers (2021). SSRN: https://ssrn.com/abstract=3808873" }, { "id": "kaal:claim:3808873-035", "url": "https://wulfkaal.github.io/claims/3808873-035", "claim": "DAO governance designs of the early 2020s failed to take account of the historical precedent on governance, and most DAOs used centralized master nodes to institute blockchain protocol and DAO upgrades.", "specific_name": "Master Node Recentralization of DAOs", "conditions": [ "decentralized autonomous organizations at the beginning of the 2020s" ], "source": "Decentralization Neutralizers", "year": "2021", "quote": "At the beginning of the 2020s, the then existing DAO governance design structures failed to take into account the historical precedent on governance. Most DAOs utilized centralized forms of master nodes to institute blockchain protocol and DAO upgrades.", "citation": "Wulf A. Kaal, Decentralization Neutralizers (2021). SSRN: https://ssrn.com/abstract=3808873" }, { "id": "kaal:claim:3808859-026", "url": "https://wulfkaal.github.io/claims/3808859-026", "claim": "Open source communities are not immune to centralization, because humans have a natural inclination to convert knowledge and resources into power over others, which is why projects such as Apache developed multiple ranked developer tiers with unequal voting rights.", "specific_name": "creeping recentralization of open communities", "conditions": [], "source": "Decentralization – Why We Need Technology Infrastructure Upgrades", "year": "2021", "quote": "The open source development community is not immune to centralization. Humans have a natural inclination to use knowledge and resources to exert power over others.", "citation": "Wulf A. Kaal, Decentralization – Why We Need Technology Infrastructure Upgrades (2021). SSRN: https://ssrn.com/abstract=3808859" }, { "id": "kaal:claim:3808859-029", "url": "https://wulfkaal.github.io/claims/3808859-029", "claim": "DeFi's disruptive potential may be blunted by incumbents: existing financial institutions can adopt decentralized technologies inside a controlled environment, capturing benefits such as transparency and interoperability while preserving centralized oversight.", "specific_name": "incumbent co-option of decentralized technology", "conditions": [], "source": "Decentralization – Why We Need Technology Infrastructure Upgrades", "year": "2021", "quote": "The disruption through DeFi may be mitigated by existing financial institutions' attempts to leverage decentralized technologies in a controlled environment that allows the utilization of its benefits, such as transparency and interoperability, while also facilitating centralized oversight.", "citation": "Wulf A. Kaal, Decentralization – Why We Need Technology Infrastructure Upgrades (2021). SSRN: https://ssrn.com/abstract=3808859" }, { "id": "kaal:claim:3808859-033", "url": "https://wulfkaal.github.io/claims/3808859-033", "claim": "The internet has become a network of vertically and horizontally integrated monopolies whose information silos constrain knowledge exchange, and the resulting lack of competition impedes innovation including at the protocol level while diminishing consumer protection and rights.", "specific_name": "monopoly capture of internet infrastructure", "conditions": [], "source": "Decentralization – Why We Need Technology Infrastructure Upgrades", "year": "2021", "quote": "These monopolies create information silos and constrain knowledge exchange. The resulting lack of competition impedes innovation, including at the protocol level and diminished consumer protection and rights.", "citation": "Wulf A. Kaal, Decentralization – Why We Need Technology Infrastructure Upgrades (2021). SSRN: https://ssrn.com/abstract=3808859" }, { "id": "kaal:claim:3808859-034", "url": "https://wulfkaal.github.io/claims/3808859-034", "claim": "People increasingly substitute trust in machines, algorithms, and code for trust in organizations and procedures, but that reliance may be misplaced because the existing internet was designed for hierarchical societal structures on an authoritative hierarchical trust model carrying serious cyber security vulnerabilities.", "specific_name": "misplaced trust in a hierarchical architecture", "conditions": [], "source": "Decentralization – Why We Need Technology Infrastructure Upgrades", "year": "2021", "quote": "Peoples' increasing reliance on digitized, coded, and automated replacements of traditional cohesion mechanisms may be misplaced. The existing internet is designed for hierarchical societal structures and with an underlying authoritative and hierarchical trust model.", "citation": "Wulf A. Kaal, Decentralization – Why We Need Technology Infrastructure Upgrades (2021). SSRN: https://ssrn.com/abstract=3808859" }, { "id": "kaal:claim:3782214-004", "url": "https://wulfkaal.github.io/claims/3782214-004", "claim": "Benevolent dictatorship is more efficient and effective than messy democracy in the short run, but centralized governance of that kind threatens the long term stability of a powerful public peer to peer network.", "specific_name": "benevolent dictator instability", "conditions": [ "large public peer to peer networks", "long time horizons" ], "source": "Decentralized Governance", "year": "2021", "quote": "Benevolent dictators are much more efficient and effective than messy democracies, but the long-term stability of a powerful public PCP network is threatened by such centralized governance.", "citation": "Craig Calcaterra, Wulf A. Kaal, Decentralized Governance (2021). SSRN: https://ssrn.com/abstract=3782214" }, { "id": "kaal:claim:3782214-005", "url": "https://wulfkaal.github.io/claims/3782214-005", "claim": "No major blockchain is entirely decentralized, because all of them lack binding, coded, anonymous peer to peer governance; on chain and off chain governance experiments to date fall short of that standard.", "specific_name": "incomplete decentralization", "conditions": [ "as of the time of writing" ], "source": "Decentralized Governance", "year": "2021", "quote": "At the moment, however, no major blockchain is entirely decentral- ized, because they all lack pure binding coded PCP anonymous governance.", "citation": "Craig Calcaterra, Wulf A. Kaal, Decentralized Governance (2021). SSRN: https://ssrn.com/abstract=3782214" }, { "id": "kaal:claim:3782205-012", "url": "https://wulfkaal.github.io/claims/3782205-012", "claim": "Historically, whenever a healthy decentralized organization began to earn money it quickly devolved into a centralized institution, because its uniting ideals shifted from transcendental value to a desire for money.", "specific_name": "Profit-driven recentralization", "conditions": [ "historical decentralized organizations that became profitable" ], "source": "Eight Institutions for the Evolution of Decentralization", "year": "2021", "quote": "Whenever a healthy decentralized organization in the past began to earn money, it quickly devolved to a centralized institution. Their ideals shifted from the transcen- dental value which originally united them to a desire for money.", "citation": "Craig Calcaterra, Wulf A. Kaal, Eight Institutions for the Evolution of Decentralization (2021). SSRN: https://ssrn.com/abstract=3782205" }, { "id": "kaal:claim:3782205-013", "url": "https://wulfkaal.github.io/claims/3782205-013", "claim": "Once the equalizing ideal that moderates a decentralized organization is lost, competition generated by the profit motive leads inevitably to centralization with rigid rules about who holds power and wealth.", "specific_name": "Loss of moderating ideal", "conditions": [ "organizations lacking a moderating shared ideal" ], "source": "Eight Institutions for the Evolution of Decentralization", "year": "2021", "quote": "Without the previous equalizing ideal to moderate, the competition generated by the profit motive led in- evitably to the organization centralizing with rigid rules for who has power and wealth.", "citation": "Craig Calcaterra, Wulf A. Kaal, Eight Institutions for the Evolution of Decentralization (2021). SSRN: https://ssrn.com/abstract=3782205" }, { "id": "kaal:claim:3782205-016", "url": "https://wulfkaal.github.io/claims/3782205-016", "claim": "If an organization's goal is to maintain decentralization, its tools must be used deliberately to prevent the natural concentration of power that occurs when economic inefficiencies create pockets of corruption where rent-seeking actors accumulate.", "specific_name": "Rent-seeking accumulation in inefficiency pockets", "conditions": [ "assumes maintaining decentralization is the organization's goal" ], "source": "Eight Institutions for the Evolution of Decentralization", "year": "2021", "quote": "If, however, the goal of the organization is to maintain decentralization (assuming that is preferable), then these tools must be used wisely to prevent the natural concentration of power that occurs when inefficiencies in the economy allow pockets of corruption to accumulate rent-seeking actors.", "citation": "Craig Calcaterra, Wulf A. Kaal, Eight Institutions for the Evolution of Decentralization (2021). SSRN: https://ssrn.com/abstract=3782205" }, { "id": "kaal:claim:3782201-014", "url": "https://wulfkaal.github.io/claims/3782201-014", "claim": "The democracy and transparency achieved by the founders of current institutions has been subverted by the natural concentration of power that evolves under competition, leaving hierarchies ossified and likely too brittle to adopt processes derived from radically different information technologies.", "specific_name": "institutional ossification", "conditions": [ "legacy institutions whose legal constitutions predate modern information processing" ], "source": "Future of Decentralization", "year": "2021", "quote": "The hierarchies have ossified. They are likely too brittle now, to adopt processes that come from such radically different in- formation technologies. Changes are likely to be seen as a threat to power and re- sisted.", "citation": "Craig Calcaterra, Wulf A. Kaal, Future of Decentralization (2021). SSRN: https://ssrn.com/abstract=3782201" }, { "id": "kaal:claim:3782201-032", "url": "https://wulfkaal.github.io/claims/3782201-032", "claim": "Geographical monopolies over traffic control create information silos and constrain knowledge exchange, and the resulting lack of competition and cooperation impedes innovation, including at the protocol level, while diminishing consumer protection and rights.", "specific_name": "monopoly induced information silos", "conditions": [], "source": "Future of Decentralization", "year": "2021", "quote": "These monopolies cre- ate information silos and constrain knowledge exchange. The resulting lack of compe- tition and cooperation impedes innovation, including at the protocol level and dimin- ished consumer protection and rights.", "citation": "Craig Calcaterra, Wulf A. Kaal, Future of Decentralization (2021). SSRN: https://ssrn.com/abstract=3782201" }, { "id": "kaal:claim:3782193-001", "url": "https://wulfkaal.github.io/claims/3782193-001", "claim": "Because more powerful members of a hierarchy are better positioned to capture whatever power becomes available, power distribution in an entrenched hierarchy becomes exponential, leaving the majority with minimal power and wealth. That discontent of the majority is the first destabilizing force acting on a centralized organization.", "specific_name": "Matthew principle immiseration", "conditions": [ "hierarchies that organize through competition", "as the hierarchy becomes entrenched over time" ], "source": "Historical Sketches of Centralization vs. Decentralization", "year": "2021", "quote": "As the hierarchy becomes more entrenched, this exponentially distributed power structure crushes those at the bottom, leaving minimal power and wealth for the vast majority of people. The discontent of the majority is the first destabilizing force of a centralized organization.", "citation": "Craig Calcaterra, Wulf A. Kaal, Historical Sketches of Centralization vs. Decentralization (2021). SSRN: https://ssrn.com/abstract=3782193" }, { "id": "kaal:claim:3782193-002", "url": "https://wulfkaal.github.io/claims/3782193-002", "claim": "Rigid hierarchies are unstable and inevitably fall, eroded either by internal corruption or by novel external challenges that the hierarchy is not flexible enough to adapt to. These are the second and third destabilizing factors, alongside majority discontent.", "specific_name": "Brittleness of rigid hierarchy", "conditions": [ "hierarchies whose power relations have become entrenched in secular, codified law" ], "source": "Historical Sketches of Centralization vs. Decentralization", "year": "2021", "quote": "Rigid hierarchies are unstable and inevitably fall, eroded from internal corruption or novel external challenges that the hierarchy is not flexible enough to adapt to. These are the second and third factors that explain why centralized organizations are unstable.", "citation": "Craig Calcaterra, Wulf A. Kaal, Historical Sketches of Centralization vs. Decentralization (2021). SSRN: https://ssrn.com/abstract=3782193" }, { "id": "kaal:claim:3782193-005", "url": "https://wulfkaal.github.io/claims/3782193-005", "claim": "Imperial China invented the printing press and applied it to centralize power through uniform edicts and the first printed money; the resulting bureaucratic rigidity left the hierarchy unable to respond to internal corruption and to external invaders.", "specific_name": "Centralizing use of new information technology", "conditions": [ "Imperial China's use of printing for political and economic centralization" ], "source": "Historical Sketches of Centralization vs. Decentralization", "year": "2021", "quote": "China invented the printing press and used it to centralize power—politically with uniform edicts and economically with the first printed money. Eventually, the hierarchy couldn't re- spond to internal corruption and external threats such as Mongolian, Manchurian, and Western imperial invaders.", "citation": "Craig Calcaterra, Wulf A. Kaal, Historical Sketches of Centralization vs. Decentralization (2021). SSRN: https://ssrn.com/abstract=3782193" }, { "id": "kaal:claim:3782193-015", "url": "https://wulfkaal.github.io/claims/3782193-015", "claim": "Centralized hierarchies have at best always failed after a few centuries and usually much sooner, and the resulting chaos leaves fertile ground for reorganizing the old order, which is what the cyclical word revolution names.", "specific_name": "Centennial collapse of centralized hierarchy", "conditions": [ "rigid centralized hierarchies viewed on a historical timescale" ], "source": "Historical Sketches of Centralization vs. Decentralization", "year": "2021", "quote": "At best, however, the hierar- chy has always failed after a few centuries, usually much sooner, and the resulting chaos leaves fertile ground for reorganizing the old order.", "citation": "Craig Calcaterra, Wulf A. Kaal, Historical Sketches of Centralization vs. Decentralization (2021). SSRN: https://ssrn.com/abstract=3782193" }, { "id": "kaal:claim:3782193-025", "url": "https://wulfkaal.github.io/claims/3782193-025", "claim": "Giving the Apaches cattle in 1917 succeeded where military force had failed because the valuable assets created a zero-sum battle over resources between lineages, generating the internal competition necessary to produce a hierarchy of power over the disbursement of resources and property.", "specific_name": "Asset-induced centralization", "conditions": [ "introduction of divisible valuable assets into a decentralized group" ], "source": "Historical Sketches of Centralization vs. Decentralization", "year": "2021", "quote": "As Nevins explained, the introduction of the cattle created \"a zero-sum battle over resources between lineages\".26 The valuable assets created the internal competition necessary to generate a hierarchy of power over disbursement of resources and property.", "citation": "Craig Calcaterra, Wulf A. Kaal, Historical Sketches of Centralization vs. Decentralization (2021). SSRN: https://ssrn.com/abstract=3782193" }, { "id": "kaal:claim:3782193-026", "url": "https://wulfkaal.github.io/claims/3782193-026", "claim": "The authors accept Brafman and Beckstrom's thesis that the best way to convert a decentralized organization into a centralized one is to introduce the profit motive, since money supplies a focal point for internal competition.", "specific_name": "Profit motive centralization", "conditions": [ "decentralized organizations in which profits become available to members" ], "source": "Historical Sketches of Centralization vs. Decentralization", "year": "2021", "quote": "The thesis of The Starfish and the Spider is that the best way to convert a decentral- ized organization to a centralized organization is to introduce the profit motive.", "citation": "Craig Calcaterra, Wulf A. Kaal, Historical Sketches of Centralization vs. Decentralization (2021). SSRN: https://ssrn.com/abstract=3782193" }, { "id": "kaal:claim:3782193-027", "url": "https://wulfkaal.github.io/claims/3782193-027", "claim": "Bitcoin does not refute the thesis that money centralizes decentralized projects: hashing power has slowly become concentrated in mining pools until the majority of that power resides in the single country of China.", "specific_name": "Mining power concentration", "conditions": [ "Bitcoin after roughly ten years of operation, as of the authors' writing" ], "source": "Historical Sketches of Centralization vs. Decentralization", "year": "2021", "quote": "Slowly, Bitcoin hashing power has become more concentrated in mining pools, until today the ma- jority of power resides in the single country of China.", "citation": "Craig Calcaterra, Wulf A. Kaal, Historical Sketches of Centralization vs. Decentralization (2021). SSRN: https://ssrn.com/abstract=3782193" }, { "id": "kaal:claim:3782193-028", "url": "https://wulfkaal.github.io/claims/3782193-028", "claim": "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.", "specific_name": "Blockchain governance centralization", "conditions": [ "contemporary for-profit blockchain and Web3 projects" ], "source": "Historical Sketches of Centralization vs. Decentralization", "year": "2021", "quote": "In fact, almost every blockchain project we're aware of is suffering under the central- izing force of competition for equity control and profit.", "citation": "Craig Calcaterra, Wulf A. Kaal, Historical Sketches of Centralization vs. Decentralization (2021). SSRN: https://ssrn.com/abstract=3782193" }, { "id": "kaal:claim:3782193-038", "url": "https://wulfkaal.github.io/claims/3782193-038", "claim": "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.", "specific_name": "Emergency power ratchet", "conditions": [ "crisis conditions such as war", "U.S. constitutional practice" ], "source": "Historical Sketches of Centralization vs. Decentralization", "year": "2021", "quote": "When the executive branch is given more centralizing power during a crisis, or simply takes it, the mechanism for removing that power when the threat is over has rarely been followed.", "citation": "Craig Calcaterra, Wulf A. Kaal, Historical Sketches of Centralization vs. Decentralization (2021). SSRN: https://ssrn.com/abstract=3782193" }, { "id": "kaal:claim:3782193-040", "url": "https://wulfkaal.github.io/claims/3782193-040", "claim": "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.", "specific_name": "Fairness versus stability tradeoff", "conditions": [ "large global networks open to members with diverse values" ], "source": "Historical Sketches of Centralization vs. Decentralization", "year": "2021", "quote": "Protocol centralization is necessary to display objective fairness, but this leads to instability.", "citation": "Craig Calcaterra, Wulf A. Kaal, Historical Sketches of Centralization vs. Decentralization (2021). SSRN: https://ssrn.com/abstract=3782193" }, { "id": "kaal:claim:3981021-005", "url": "https://wulfkaal.github.io/claims/3981021-005", "claim": "Modern philanthropic strategies entrust donors with identifying which problems need to be solved and with providing the solutions, rather than trusting the solutions proposed by the nonprofits themselves, which makes the approach more centralized and less grassroots.", "specific_name": "Donor centralization of problem definition", "conditions": [ "modern donor driven philanthropic strategies" ], "source": "How Decentralized Autonomous Organizations Optimize Charitable Giving", "year": "2021", "quote": "strategies that entrust donors with identifying which problems need to be solved and then provide the perceived appropriate solutions; rather than trusting the solutions proposed by the non-profits themselves.38 This approach is more centralized and less grassroots39 for solving societal issues.", "citation": "Wulf A. Kaal, How Decentralized Autonomous Organizations Optimize Charitable Giving (2021). SSRN: https://ssrn.com/abstract=3981021" }, { "id": "kaal:claim:3981021-006", "url": "https://wulfkaal.github.io/claims/3981021-006", "claim": "Modern philanthropy limits the autonomy of grassroots charitable organizations and substitutes a leveraged and exploitive relationship in which the goals of the donor are served above all.", "specific_name": "Loss of grassroots autonomy", "conditions": [ "grassroots charitable organizations receiving major private philanthropic funding" ], "source": "How Decentralized Autonomous Organizations Optimize Charitable Giving", "year": "2021", "quote": "there is a growing concern amongst commentators that modern philanthropy limits the autonomy of grassroots charitable organizations and replaces it with a leveraged and exploitive relationship where the goals of the donor are served above all.", "citation": "Wulf A. Kaal, How Decentralized Autonomous Organizations Optimize Charitable Giving (2021). SSRN: https://ssrn.com/abstract=3981021" }, { "id": "kaal:claim:3981021-023", "url": "https://wulfkaal.github.io/claims/3981021-023", "claim": "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.", "specific_name": "Re-centralization drift in DAO governance", "conditions": [ "DAOs holding fungible assets over long time horizons" ], "source": "How Decentralized Autonomous Organizations Optimize Charitable Giving", "year": "2021", "quote": "long-term success depends on its ability to maintain the dynamic decentralized fluidity and dynamic decentralized order. Without it, the CHARITYxDAO's values that initially united and reinforced the CHARITYxDAO VAs are at risk of morphing into ever tighter, complex, and hierarchical structures.", "citation": "Wulf A. Kaal, How Decentralized Autonomous Organizations Optimize Charitable Giving (2021). SSRN: https://ssrn.com/abstract=3981021" }, { "id": "kaal:claim:3808867-031", "url": "https://wulfkaal.github.io/claims/3808867-031", "claim": "Those few entities and individuals who control the data flow and the associated algorithms can use centralized algorithmic human predictors to build autocratic algorithmic systems and structures, and the implied loss of democratic principles in society is perhaps an inevitable side effect.", "specific_name": "Algorithmic autocracy from data control", "conditions": [ "concentrated control over data flows and algorithms" ], "source": "How Decentralized Systems Can Upgrade AI", "year": "2021", "quote": "Centralized algorithmic human predictors can be used by those few entities and individuals who control the data flow and the associated algorithms to create autocratic algorithmic systems and structures. The implied loss of democratic principles in society is perhaps an inevitable side effect.", "citation": "Wulf A. Kaal, How Decentralized Systems Can Upgrade AI (2021). SSRN: https://ssrn.com/abstract=3808867" }, { "id": "kaal:claim:3931933-006", "url": "https://wulfkaal.github.io/claims/3931933-006", "claim": "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.", "specific_name": "platform centralization suppressing edge information", "conditions": [ "technology platforms whose direction is controlled centrally" ], "source": "Hybrid Secure Proof of Stake", "year": "2021", "quote": "Platform centralization is particularly detrimental in the developer community because it is the developer community that brings information in from the edges of the system/society and helps form a consensus on emerging technologies for society.", "citation": "Wulf A. Kaal, Hybrid Secure Proof of Stake (2021). SSRN: https://ssrn.com/abstract=3931933" }, { "id": "kaal:claim:3931933-013", "url": "https://wulfkaal.github.io/claims/3931933-013", "claim": "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.", "specific_name": "core developer rule capture", "conditions": [ "initial Casper testnet governance" ], "source": "Hybrid Secure Proof of Stake", "year": "2021", "quote": "The initial Casper testnet was subject to inevitable forms of centralization. For example, a small group of core developers determined the testnet validator performance numbers and other rules without broader community input. Moreover, only a rather small group of developers managed", "citation": "Wulf A. Kaal, Hybrid Secure Proof of Stake (2021). SSRN: https://ssrn.com/abstract=3931933" }, { "id": "kaal:claim:3782192-006", "url": "https://wulfkaal.github.io/claims/3782192-006", "claim": "Concentrating too much power in any single office of a hierarchy creates a decision making bottleneck that can cripple the organization, so the tree structure that is optimal for transmitting orders downward is also its point of paralysis.", "specific_name": "Decision-making bottleneck", "conditions": [ "centralized tree structures with concentrated decision rights" ], "source": "Introduction to Decentralization", "year": "2021", "quote": "However, if too much power is held in any single office in the hierarchy, de- cision making finds a bottleneck that can cripple the organization.", "citation": "Craig Calcaterra, Wulf A. Kaal, Introduction to Decentralization (2021). SSRN: https://ssrn.com/abstract=3782192" }, { "id": "kaal:claim:3782192-010", "url": "https://wulfkaal.github.io/claims/3782192-010", "claim": "Unchecked concentration of power drives the distribution toward one member holding nearly all resources, which is clearly inefficient for the goals of the group, and the resulting discontent is the main historical reason for revolt.", "specific_name": "Terminal power concentration provoking revolt", "conditions": [ "hierarchies where the concentration of power is left unchecked" ], "source": "Introduction to Decentralization", "year": "2021", "quote": "In the limit, if left unchecked, the most powerful member would have WXX% of the resources and the others would have X%. Clearly, getting anywhere close to this distribution is inefficient for the goals of the group. The resulting discontent is the main historical reason for revolt.", "citation": "Craig Calcaterra, Wulf A. Kaal, Introduction to Decentralization (2021). SSRN: https://ssrn.com/abstract=3782192" }, { "id": "kaal:claim:3782192-013", "url": "https://wulfkaal.github.io/claims/3782192-013", "claim": "Corruption is technically inevitable in any hierarchy, because it is impossible to create a perfectly efficient organization in practice and there is friction in every real system.", "specific_name": "Inevitable corruption in hierarchies", "conditions": [ "any real hierarchy" ], "source": "Introduction to Decentralization", "year": "2021", "quote": "Corruption is technically inevitable in any hierarchy, since it is impossible to create a perfectly efficient organization in practice—there is friction in every real system.", "citation": "Craig Calcaterra, Wulf A. Kaal, Introduction to Decentralization (2021). SSRN: https://ssrn.com/abstract=3782192" }, { "id": "kaal:claim:3782191-002", "url": "https://wulfkaal.github.io/claims/3782191-002", "claim": "Centralized organization of society has reached its limitations, evidenced by weakening public sector legitimacy, economic decline, disillusionment with existing institutions, inadequate response to geopolitical problems, and pressure on overly centralized systems.", "specific_name": "limits-of-centralized-society", "conditions": [ "contemporary global economic and political systems" ], "source": "Preface to", "year": "2021", "quote": "Other indicators suggest that centralized organization of society has in many ways reached limitations: the general weakening legitimacy of the public sector; increas- ing economic decline; disillusionment with existing business, political, and social in- stitutions", "citation": "Craig Calcaterra, Wulf A. Kaal, Preface to (2021). SSRN: https://ssrn.com/abstract=3782191" }, { "id": "kaal:claim:3782191-022", "url": "https://wulfkaal.github.io/claims/3782191-022", "claim": "Centralized coordination enables attack coordination because the hierarchical structure allows attackers to identify a single point of failure, whereas the constantly morphing information flow of decentralized systems increases their attack resistance.", "specific_name": "single-point-of-failure", "conditions": [ "comparison of centralized and decentralized system security" ], "source": "Preface to", "year": "2021", "quote": "Centralized coordination enables attack coordination because the hierarchical struc- ture allows the identification of a single point of failure.", "citation": "Craig Calcaterra, Wulf A. Kaal, Preface to (2021). SSRN: https://ssrn.com/abstract=3782191" }, { "id": "kaal:claim:3782191-026", "url": "https://wulfkaal.github.io/claims/3782191-026", "claim": "Centralization has two major flaws that inevitably lead to its downfall; the first is that every centralized organization has a single point of failure, binding the organization to a leader's poor decisions when that leader lacks information, skill, wisdom, or charisma.", "specific_name": "leader-single-point-of-failure", "conditions": [ "all centralized organizations", "aggravated when circumstances change faster than a leader can decide" ], "source": "Preface to", "year": "2021", "quote": "Centralization comes with two major flaws that inevi- tably lead to its downfall. First, every centralized organization has a single point of failure.", "citation": "Craig Calcaterra, Wulf A. Kaal, Preface to (2021). SSRN: https://ssrn.com/abstract=3782191" }, { "id": "kaal:claim:3782191-027", "url": "https://wulfkaal.github.io/claims/3782191-027", "claim": "The second flaw of centralization is that a hierarchy's own success and efficiency makes members dependent on it until the structure ossifies and becomes too inflexible to reorganize and respond effectively to a novel crisis.", "specific_name": "hierarchical-ossification", "conditions": [ "successful hierarchies facing novel crises rather than predictable tasks" ], "source": "Preface to", "year": "2021", "quote": "Secondly, the very success and efficiency of a hierarchy leads its members to become dependent on it, relying unquestioningly on the institution's design.", "citation": "Craig Calcaterra, Wulf A. Kaal, Preface to (2021). SSRN: https://ssrn.com/abstract=3782191" }, { "id": "kaal:claim:3782191-037", "url": "https://wulfkaal.github.io/claims/3782191-037", "claim": "Corporations centralize power in order to pursue a singular strategy that efficiently exploits market circumstances, but this produces instability when the market swings, because a brittle hierarchy may crash before it can reorganize to handle a new challenge.", "specific_name": "brittle-corporate-hierarchy", "conditions": [ "corporations with centralized power facing market swings" ], "source": "Preface to", "year": "2021", "quote": "Corporations tend to have centralized power, because they wish to employ a singu- lar strategy to efficiently exploit the circumstances of the market. However, this leads to instability whenever the market swings.", "citation": "Craig Calcaterra, Wulf A. Kaal, Preface to (2021). SSRN: https://ssrn.com/abstract=3782191" }, { "id": "kaal:claim:3782217-004", "url": "https://wulfkaal.github.io/claims/3782217-004", "claim": "Any reliance by a DAO on a centralized feature creates a centralized point of failure that threatens the survival of the organization and renders the system technically centralized despite its decentralized appearance.", "specific_name": "centralized-dependency-nullifies-decentralization", "conditions": [ "DAOs with any centralized dependency, including oracles" ], "source": "The Importance of History In Decentralization", "year": "2021", "quote": "Any time your DAO relies on a centralized feature, that is a centralized point of failure that is a threat to the survival of the organization. That means the system is technically centralized.", "citation": "Craig Calcaterra, Wulf A. Kaal, The Importance of History In Decentralization (2021). SSRN: https://ssrn.com/abstract=3782217" }, { "id": "kaal:claim:3782217-005", "url": "https://wulfkaal.github.io/claims/3782217-005", "claim": "Where a DAO is automated around a single centralized point of failure, the work of decentralizing and giving members redundant power is wasted, because the point of failure functions as a supreme leader and full centralization would be more efficient.", "specific_name": "wasted-decentralization", "conditions": [ "DAO automated around one centralized component" ], "source": "The Importance of History In Decentralization", "year": "2021", "quote": "In that case it would be more efficient to completely centralize around the single point of failure the DAO is automated around. The effort you're making to decentralize and give each member redundant power is wasted, because the point of failure might as well be the supreme leader.", "citation": "Craig Calcaterra, Wulf A. Kaal, The Importance of History In Decentralization (2021). SSRN: https://ssrn.com/abstract=3782217" }, { "id": "kaal:claim:3782217-017", "url": "https://wulfkaal.github.io/claims/3782217-017", "claim": "Centralized civic institutions always become corrupt over time, and that corruption becomes obvious only once a new technology disrupts their operation and reveals their weaknesses.", "specific_name": "institutional-ossification", "conditions": [ "centralized civic institutions over long time horizons" ], "source": "The Importance of History In Decentralization", "year": "2021", "quote": "Centralized civic institutions always become corrupt in time. Then this corruption becomes obvious once a new technology disrupts their operation, revealing their weaknesses.", "citation": "Craig Calcaterra, Wulf A. Kaal, The Importance of History In Decentralization (2021). SSRN: https://ssrn.com/abstract=3782217" }, { "id": "kaal:claim:3782217-023", "url": "https://wulfkaal.github.io/claims/3782217-023", "claim": "The most obvious harm from news consolidation is that national and international centralized corporations do not devote the same degree of focus to the interests of the local communities they serve, because love does not scale.", "specific_name": "local-coverage-collapse", "conditions": [ "consolidated national or international news corporations" ], "source": "The Importance of History In Decentralization", "year": "2021", "quote": "The most obvious problem with news consolidation is that national or interna- tional centralized corporations do not devote the same degree of focus to the inter- ests of the local communities they serve.", "citation": "Craig Calcaterra, Wulf A. Kaal, The Importance of History In Decentralization (2021). SSRN: https://ssrn.com/abstract=3782217" }, { "id": "kaal:claim:3782220-028", "url": "https://wulfkaal.github.io/claims/3782220-028", "claim": "The drift into static power relationships is a universal temptation because centralization is efficient, yet centralized governance is provably flawed.", "specific_name": "drift into static power relationships", "conditions": [ "organizations facing the choice between centralized and decentralized governance" ], "source": "The Importance of Transcendental Unifying Values for Decentralization", "year": "2021", "quote": "we must protect the group from falling into static power rela- tionships. The temptation is universal, because of the efficiency of centralization, but it is provably flawed.", "citation": "Craig Calcaterra, Wulf A. Kaal, The Importance of Transcendental Unifying Values for Decentralization (2021). SSRN: https://ssrn.com/abstract=3782220" }, { "id": "kaal:claim:3782220-029", "url": "https://wulfkaal.github.io/claims/3782220-029", "claim": "Committing too completely to a global centralized manmade hierarchy, and letting its bureaucracy become too rigid and impersonal, risks a predictable fall that could be the final collapse, because for the first time the structure encompasses the entire planet.", "specific_name": "final collapse of global hierarchy", "conditions": [ "planet-spanning centralized organization" ], "source": "The Importance of Transcendental Unifying Values for Decentralization", "year": "2021", "quote": "If we commit too completely to this global, centralized, manmade hierarchy, if we allow our bureaucracy to become too rigid and impersonal, the predictable fall could be the final collapse.", "citation": "Craig Calcaterra, Wulf A. Kaal, The Importance of Transcendental Unifying Values for Decentralization (2021). SSRN: https://ssrn.com/abstract=3782220" }, { "id": "kaal:claim:3782220-030", "url": "https://wulfkaal.github.io/claims/3782220-030", "claim": "A centralized hierarchy becomes too rigid when those policing the rules gain more power than the members who honor the transcendental value that originally founded the organization, and the spirit of the law should always reign above the letter of the law.", "specific_name": "enforcer capture of the hierarchy", "conditions": [ "centralized hierarchies with rule enforcement roles" ], "source": "The Importance of Transcendental Unifying Values for Decentralization", "year": "2021", "quote": "A centralized hierarchy becomes too rigid when those policing the rules gain more power than the members who are honoring the transcendental value that originally founded the organization. The spirit of the law should always reign above the letter of the law.", "citation": "Craig Calcaterra, Wulf A. Kaal, The Importance of Transcendental Unifying Values for Decentralization (2021). SSRN: https://ssrn.com/abstract=3782220" }, { "id": "kaal:claim:4067783-039", "url": "https://wulfkaal.github.io/claims/4067783-039", "claim": "Diversity of viewpoints is severely diminished when power is centralized, whereas information technology allows a global network open to members of diverse values and backgrounds to form.", "specific_name": "Viewpoint homogenization under centralized power", "conditions": [], "source": "DAO Fallacies", "year": "2022", "quote": "Diversity of viewpoints is severely diminished when power is centralized. Information technology allows a global network of people to form, open to members of diverse values and backgrounds.", "citation": "Wulf A. Kaal, DAO Fallacies (2022). SSRN: https://ssrn.com/abstract=4067783" }, { "id": "kaal:claim:4015908-003", "url": "https://wulfkaal.github.io/claims/4015908-003", "claim": "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.", "specific_name": "Centralized foundation governance", "conditions": [ "ICO era token issuance" ], "source": "Fair Token Launch", "year": "2022", "quote": "The foundation model for token issuance is a core form of centralized top-down governance in the context of token offerings.", "citation": "Wulf A. Kaal, Fair Token Launch (2022). SSRN: https://ssrn.com/abstract=4015908" }, { "id": "kaal:claim:4015908-023", "url": "https://wulfkaal.github.io/claims/4015908-023", "claim": "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.", "specific_name": "Foundation controlled DAO", "conditions": [ "DAO controlled by a small group in a foundation setting" ], "source": "Fair Token Launch", "year": "2022", "quote": "controlled by a handful of people in a foundation setting, it is less likely that decentralized governance metrics take hold in the DAO. Accordingly, it is less likely that the public can benefit from the decentralized community governance over the fair launch.", "citation": "Wulf A. Kaal, Fair Token Launch (2022). SSRN: https://ssrn.com/abstract=4015908" }, { "id": "kaal:claim:4529715-003", "url": "https://wulfkaal.github.io/claims/4529715-003", "claim": "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.", "specific_name": "decentralization-in-name-only", "conditions": [ "dataset of DAOs scored by the authors' teams" ], "source": "Decentralized Autonomous Organizations (DAO) – A Market Meta Analysis", "year": "2023", "quote": "Based on our observations of the data, the maximum score was CRDAO at 8/10 while there were a few DAOs that scored 1/10. Across the board, DAOs are well below average at implementing true decentralization practices in their organizations with a 3.78 out of 10.", "citation": "Wulf A. Kaal, Josh Bykowski, Decentralized Autonomous Organizations (DAO) – A Market Meta Analysis (2023). SSRN: https://ssrn.com/abstract=4529715" }, { "id": "kaal:claim:4529715-004", "url": "https://wulfkaal.github.io/claims/4529715-004", "claim": "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.", "specific_name": "unrealized-decentralization-benefit", "conditions": [ "current state of the DAO market at time of study" ], "source": "Decentralized Autonomous Organizations (DAO) – A Market Meta Analysis", "year": "2023", "quote": "efficiency to organizations. The current state of DAOs, with a few exceptions, doesn't seem to do this.", "citation": "Wulf A. Kaal, Josh Bykowski, Decentralized Autonomous Organizations (DAO) – A Market Meta Analysis (2023). SSRN: https://ssrn.com/abstract=4529715" }, { "id": "kaal:claim:4529715-015", "url": "https://wulfkaal.github.io/claims/4529715-015", "claim": "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.", "specific_name": "creeping-centralization", "conditions": [], "source": "Decentralized Autonomous Organizations (DAO) – A Market Meta Analysis", "year": "2023", "quote": "centralization, where a small group of individuals or entities hold a disproportionate amount of power or influence within the DAO, which can undermine the decentralized nature of the organization.", "citation": "Wulf A. Kaal, Josh Bykowski, Decentralized Autonomous Organizations (DAO) – A Market Meta Analysis (2023). SSRN: https://ssrn.com/abstract=4529715" }, { "id": "kaal:claim:4529715-021", "url": "https://wulfkaal.github.io/claims/4529715-021", "claim": "True decentralization requires the absence of a primary decision-maker, which is very difficult for a decentralized insurance organization to achieve while it is still in its infancy.", "specific_name": "infancy-centralization", "conditions": [ "early stage decentralized insurance organizations" ], "source": "Decentralized Autonomous Organizations (DAO) – A Market Meta Analysis", "year": "2023", "quote": "Despite the potential benefits, decentralized insurance organizations face several challenges. First, true decentralization requires the absence of a primary decision-maker, which is difficult to achieve in an organization's infancy.", "citation": "Wulf A. Kaal, Josh Bykowski, Decentralized Autonomous Organizations (DAO) – A Market Meta Analysis (2023). SSRN: https://ssrn.com/abstract=4529715" }, { "id": "kaal:claim:4529715-025", "url": "https://wulfkaal.github.io/claims/4529715-025", "claim": "Web3 may not yet be ready for a truly decentralized organization: across platforms there is always a promise of decentralization, yet tangible measures prevent that promise from becoming true.", "specific_name": "decentralization-theater", "conditions": [ "DAO platforms reviewed in the study" ], "source": "Decentralized Autonomous Organizations (DAO) – A Market Meta Analysis", "year": "2023", "quote": "Despite that ideation, it seems Web3 may not be ready for a truly decentralized organization just yet. There is an overarching theme between platforms in which there is always a promise of decentralization, yet tangible measures prevent that from becoming true.", "citation": "Wulf A. Kaal, Josh Bykowski, Decentralized Autonomous Organizations (DAO) – A Market Meta Analysis (2023). SSRN: https://ssrn.com/abstract=4529715" }, { "id": "kaal:claim:4529715-026", "url": "https://wulfkaal.github.io/claims/4529715-026", "claim": "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.", "specific_name": "decentralize-later-fallacy", "conditions": [ "platforms that plan phased decentralization" ], "source": "Decentralized Autonomous Organizations (DAO) – A Market Meta Analysis", "year": "2023", "quote": "Many platforms seem to agree with the idea that they must first create a centralized organization that will later become decentralized once they implement proper protocols and procedures. This mindset, however, undermines the power and ultimate accessibility to ownership", "citation": "Wulf A. Kaal, Josh Bykowski, Decentralized Autonomous Organizations (DAO) – A Market Meta Analysis (2023). SSRN: https://ssrn.com/abstract=4529715" }, { "id": "kaal:claim:4529715-028", "url": "https://wulfkaal.github.io/claims/4529715-028", "claim": "Where a founder retains access to the smart contract behind the governance token, as with 3OH DAO, an internal attack by that founder would be remarkably easy.", "specific_name": "founder-key-retention", "conditions": [ "founder has not renounced ownership of the token smart contract" ], "source": "Decentralized Autonomous Organizations (DAO) – A Market Meta Analysis", "year": "2023", "quote": "If a DAO could have negative attack resistance, 3OH would be the DAO. With the founder having access to the smart contract, an internal attack by the founder would be remarkably easy.", "citation": "Wulf A. Kaal, Josh Bykowski, Decentralized Autonomous Organizations (DAO) – A Market Meta Analysis (2023). SSRN: https://ssrn.com/abstract=4529715" }, { "id": "kaal:claim:4529715-039", "url": "https://wulfkaal.github.io/claims/4529715-039", "claim": "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.", "specific_name": "security-by-recentralization", "conditions": [ "vetted membership and unanimous committee approval" ], "source": "Decentralized Autonomous Organizations (DAO) – A Market Meta Analysis", "year": "2023", "quote": "However, these principles really limit what a DAO is supposed to be so in a way it is secure, but also at the expense of the organization they were trying to create.", "citation": "Wulf A. Kaal, Josh Bykowski, Decentralized Autonomous Organizations (DAO) – A Market Meta Analysis (2023). SSRN: https://ssrn.com/abstract=4529715" }, { "id": "kaal:claim:4796714-012", "url": "https://wulfkaal.github.io/claims/4796714-012", "claim": "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.", "specific_name": "blockchain recentralization", "conditions": [ "applies to blockchain and DLT based AI governance proposals", "observed in Layer 1 networks as of 2024" ], "source": "AI Governance", "year": "2024", "quote": "Alas, recentralization may interfere with blockchain and DLT technologies' ability to effectively govern AI.", "citation": "Wulf A. Kaal, AI Governance (2024). SSRN: https://ssrn.com/abstract=4796714" }, { "id": "kaal:claim:4796714-015", "url": "https://wulfkaal.github.io/claims/4796714-015", "claim": "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.", "specific_name": "smart contract corruptibility by affiliation", "conditions": [ "applies where a few dominant parties influence the underlying Layer 1", "holds under current blockchain design as of 2024" ], "source": "AI Governance", "year": "2024", "quote": "When the decentralization of Layer 1 blockchains is compromised, the autonomy of smart contracts is inherently jeopardized, undermining their effectiveness as tools for ethical AI governance.", "citation": "Wulf A. Kaal, AI Governance (2024). SSRN: https://ssrn.com/abstract=4796714" }, { "id": "kaal:claim:4796714-028", "url": "https://wulfkaal.github.io/claims/4796714-028", "claim": "Privacy preserving frameworks such as federated learning do not fully remove centralization, because they still typically depend on a central client to collect and distribute model information, which reintroduces high communication loads and centralized vulnerabilities.", "specific_name": "residual central aggregator", "conditions": [ "applies to standard federated learning architectures with a central aggregator" ], "source": "AI Governance", "year": "2024", "quote": "In response, privacy-preserving frameworks like federated learning have been developed, yet these often still depend on a central client to collect and distribute model information, resulting in high communication loads and centralized vulnerabilities.", "citation": "Wulf A. Kaal, AI Governance (2024). SSRN: https://ssrn.com/abstract=4796714" }, { "id": "kaal:claim:4941807-014", "url": "https://wulfkaal.github.io/claims/4941807-014", "claim": "Centralizing data in a single repository, while it permits powerful computation and advanced algorithms, poses significant privacy risks and creates a single point of failure.", "specific_name": "centralized single point of failure", "conditions": [ "in centralized AI architectures that pool data into one repository" ], "source": "AI Governance Via Web3 Reputation System", "year": "2024", "quote": "However, this centralization can pose significant privacy risks and create a single point of failure.", "citation": "Wulf A. Kaal, AI Governance Via Web3 Reputation System (2024). SSRN: https://ssrn.com/abstract=4941807" }, { "id": "kaal:claim:4941807-020", "url": "https://wulfkaal.github.io/claims/4941807-020", "claim": "Privacy preserving frameworks such as federated learning do not fully solve centralization, because they typically still depend on a central client to collect and distribute model information, which produces high communication loads and reintroduces centralized vulnerabilities.", "specific_name": "residual central client dependency", "conditions": [ "in federated learning designs that retain a central aggregating client" ], "source": "AI Governance Via Web3 Reputation System", "year": "2024", "quote": "In response, privacy-preserving frameworks like federated learning have been developed, yet these often still depend on a central client to collect and distribute model information, resulting in high communication loads and centralized vulnerabilities.", "citation": "Wulf A. Kaal, AI Governance Via Web3 Reputation System (2024). SSRN: https://ssrn.com/abstract=4941807" }, { "id": "kaal:claim:4755632-017", "url": "https://wulfkaal.github.io/claims/4755632-017", "claim": "The more hierarchical the code review process, the lower the quality of the reviewed code, and the same holds for barriers to entry: hierarchy and entry barriers together degrade code quality.", "specific_name": "Hierarchy Degrades Review Quality", "conditions": [ "applies to legacy code review firms with hierarchical review structures" ], "source": "AI Learning - Decentralized Governance to Optimize Human Output Datasets for AI Learning", "year": "2024", "quote": "The more hierarchical the code review process is, the lower is the quality of the reviewed code.", "citation": "Wulf A. Kaal, AI Learning - Decentralized Governance to Optimize Human Output Datasets for AI Learning (2024). SSRN: https://ssrn.com/abstract=4755632" }, { "id": "kaal:claim:4755632-018", "url": "https://wulfkaal.github.io/claims/4755632-018", "claim": "Hierarchical review produces an anchoring failure: the first reviewer in the hierarchy gets the highest priority and follow-on reviewers merely add minor upgrades, so adding reviewers does not add the independent scrutiny that would raise code quality.", "specific_name": "First Reviewer Anchoring", "conditions": [ "applies to legacy hierarchical code review processes" ], "source": "AI Learning - Decentralized Governance to Optimize Human Output Datasets for AI Learning", "year": "2024", "quote": "in the legacy review process, the first reviewer within the hierarchical structure of the code review process often gets the highest priority and is often merely followed with minor upgrades by follow-on reviewers.", "citation": "Wulf A. Kaal, AI Learning - Decentralized Governance to Optimize Human Output Datasets for AI Learning (2024). SSRN: https://ssrn.com/abstract=4755632" }, { "id": "kaal:claim:4755632-020", "url": "https://wulfkaal.github.io/claims/4755632-020", "claim": "More reviewers asking clarifying questions makes code simpler and clearer, which typically increases code quality, but hierarchical review processes foreclose this mechanism and also exclude opinions from the edges of the reviewer spectrum.", "specific_name": "Foreclosed Clarification Loop", "conditions": [ "applies to hierarchical code review processes" ], "source": "AI Learning - Decentralized Governance to Optimize Human Output Datasets for AI Learning", "year": "2024", "quote": "the more people review the code with comments that ask for clarification, the more likely it becomes that the code becomes simpler and clearer, which in turn typically increases code quality. However, that is not possible in hierarchical review processes.", "citation": "Wulf A. Kaal, AI Learning - Decentralized Governance to Optimize Human Output Datasets for AI Learning (2024). SSRN: https://ssrn.com/abstract=4755632" }, { "id": "kaal:claim:4755632-027", "url": "https://wulfkaal.github.io/claims/4755632-027", "claim": "The code review market is self-undermining: one of the strongest forms of exploitation and centralized economies of scale is being created in a market whose purpose is to support the decentralization of other industries.", "specific_name": "Centralized Decentralization Market", "conditions": [], "source": "AI Learning - Decentralized Governance to Optimize Human Output Datasets for AI Learning", "year": "2024", "quote": "it is a bit ironic that one of the strongest forms of exploitation and centralized economies of scale are being created in a market that is, from the outset, supposed to help support the decentralization of disparate industries.", "citation": "Wulf A. Kaal, AI Learning - Decentralized Governance to Optimize Human Output Datasets for AI Learning (2024). SSRN: https://ssrn.com/abstract=4755632" }, { "id": "kaal:claim:4734750-005", "url": "https://wulfkaal.github.io/claims/4734750-005", "claim": "Bug bounty programs are structurally compromised by their reliance on a trusted intermediary that extracts high commission fees and may hold interests that conflict with the software vendor.", "specific_name": "Intermediary capture of bounty programs", "conditions": [ "intermediated bug bounty platforms" ], "source": "Code Review DAO", "year": "2024", "quote": "they use a trusted intermediary that charges hefty commission fees and may have a conflict of interest with the software vendor", "citation": "Wulf A. Kaal, Code Review DAO (2024). SSRN: https://ssrn.com/abstract=4734750" }, { "id": "kaal:claim:4734750-007", "url": "https://wulfkaal.github.io/claims/4734750-007", "claim": "The more hierarchical the code review process, the lower the quality of the reviewed code; hierarchy in review is inversely related to output quality.", "specific_name": "Hierarchy degrades review quality", "conditions": [ "legacy code review firms with hierarchical reviewer structures" ], "source": "Code Review DAO", "year": "2024", "quote": "The more hierarchical the code review process is, the lower is the quality of the reviewed code.", "citation": "Wulf A. Kaal, Code Review DAO (2024). SSRN: https://ssrn.com/abstract=4734750" }, { "id": "kaal:claim:4734750-008", "url": "https://wulfkaal.github.io/claims/4734750-008", "claim": "In hierarchical review, the first reviewer's output receives the highest priority and later reviewers add only minor upgrades, so the review becomes the initial reviewer's work product rather than the collective's.", "specific_name": "First reviewer dominance", "conditions": [ "legacy hierarchical code review processes" ], "source": "Code Review DAO", "year": "2024", "quote": "The collective of reviewers is also not incentivized to find flaws in the code to optimize code as a work product of the collective. Rather, it is often seen as the work product of the initial reviewer with minor input from follow-up reviewers.", "citation": "Wulf A. Kaal, Code Review DAO (2024). SSRN: https://ssrn.com/abstract=4734750" }, { "id": "kaal:claim:4734750-016", "url": "https://wulfkaal.github.io/claims/4734750-016", "claim": "It is ironic that some of the strongest forms of exploitation and centralized economies of scale have been created inside the code review market, which exists to support the decentralization of other industries.", "specific_name": "Centralized market for decentralization services", "conditions": [], "source": "Code Review DAO", "year": "2024", "quote": "it is a bit ironic that one of the strongest forms of exploitation and centralized economies of scale are being created in a market that is, from the outset, supposed to help support the decentralization of disparate industries", "citation": "Wulf A. Kaal, Code Review DAO (2024). SSRN: https://ssrn.com/abstract=4734750" }, { "id": "kaal:claim:5254152-031", "url": "https://wulfkaal.github.io/claims/5254152-031", "claim": "Procedural governance safeguards such as two step voting with temperature checks do not produce genuine decentralization when the governance token remains purchasable; in MakerDAO's case the purchasable token renders true decentralization nominal.", "specific_name": "nominal decentralization", "conditions": [ "DAOs combining multi stage voting with freely purchasable governance tokens" ], "source": "DAO Market Meta Analysis 2024", "year": "2024", "quote": "The governance process includes 2-step voting with temperature checks, but the purchasable governance token makes true decentralization nominal (G: 4).", "citation": "Wulf A. Kaal, DAO Market Meta Analysis 2024 (2024). SSRN: https://ssrn.com/abstract=5254152" }, { "id": "kaal:claim:5254152-032", "url": "https://wulfkaal.github.io/claims/5254152-032", "claim": "Subjecting every community vote to review by a council that is not democratically elected defeats the governance value of community voting, as scored for Goldfinch DAO with a governance score of 2.", "specific_name": "unelected council veto", "conditions": [ "DAOs where a non elected council holds final say over community votes" ], "source": "DAO Market Meta Analysis 2024", "year": "2024", "quote": "involves all community votes being reviewed by the council, which is not democratically elected (G: 2).", "citation": "Wulf A. Kaal, DAO Market Meta Analysis 2024 (2024). SSRN: https://ssrn.com/abstract=5254152" }, { "id": "kaal:claim:5254152-036", "url": "https://wulfkaal.github.io/claims/5254152-036", "claim": "A governance design aimed at democratic balance can still centralize power over time when the token supply is fixed, as recorded for MoonDAO.", "specific_name": "fixed token supply centralization drift", "conditions": [ "DAOs with a fixed governance token supply" ], "source": "DAO Market Meta Analysis 2024", "year": "2024", "quote": "aims for democratic balance but the fixed token supply could result in centralized power over time (G: 4)", "citation": "Wulf A. Kaal, DAO Market Meta Analysis 2024 (2024). SSRN: https://ssrn.com/abstract=5254152" }, { "id": "kaal:claim:5095633-018", "url": "https://wulfkaal.github.io/claims/5095633-018", "claim": "The centralized frameworks used by the leading annotation companies, including Scale AI, Appen, Hive, V7 Labs, CloudFactory, and Sama, carry theoretical and practical shortcomings around bias, ethical sourcing, and data diversity that undermine the equitability and generalizability of the resulting AI models.", "specific_name": "centralized annotation shortcomings", "conditions": [ "centralized data annotation providers as currently structured" ], "source": "Artificial Intelligence The Final Frontier", "year": "2025", "quote": "These challenges involve issues of bias, ethical data sourcing, and data diversity, each of which can undermine the equitability and generalizability of resulting AI models.", "citation": "Wulf A. Kaal, Artificial Intelligence The Final Frontier (2025). SSRN: https://ssrn.com/abstract=5095633" }, { "id": "kaal:claim:5886442-032", "url": "https://wulfkaal.github.io/claims/5886442-032", "claim": "Principal agent frictions reemerge in new forms in the agentic economy, as user sovereign bring your own agents compete with platform controlled bowling shoe agents, creating incentives for proprietary enclosure and interoperability throttling.", "specific_name": "proprietary agent enclosure", "conditions": [ "arises where agent platforms are controlled by intermediaries rather than by users" ], "source": "The AI-to-AI Economy and the Collapse of Anthropocentric Economic Theory", "year": "2025", "quote": "Principal-agent frictions reemerge in new forms: user-sovereign \"bring-your-own\" agents compete with platform-controlled \"bowling-shoe\" agents, creating incentives for proprietary enclosure and interoperability throttling", "citation": "Wulf A. Kaal, The AI-to-AI Economy and the Collapse of Anthropocentric Economic Theory (2025). SSRN: https://ssrn.com/abstract=5886442" }, { "id": "kaal:claim:5887242-008", "url": "https://wulfkaal.github.io/claims/5887242-008", "claim": "Separating internal on-chain governance from external legal relations maximizes decentralization while preserving real-world enforceability, thereby avoiding the fatal centralization that undermined earlier DAO concepts.", "specific_name": "fatal-centralization-of-earlier-daos", "conditions": [], "source": "The UDLC DAO Operationalizing a Continuously Evolving Universal Digital Law Codex Through Weighted", "year": "2025", "quote": "This duality maximizes decentralization while preserving enforceability in the real world, avoiding the fatal centralization that has undermined earlier DAO concepts.", "citation": "Wulf A. Kaal, The UDLC DAO Operationalizing a Continuously Evolving Universal Digital Law Codex Through Weighted (2025). SSRN: https://ssrn.com/abstract=5887242" }, { "id": "kaal:claim:5887242-013", "url": "https://wulfkaal.github.io/claims/5887242-013", "claim": "By rejecting any requirement for a legal entity, board, or registered agent, the UDLC DAO escapes the centralization trap that undermined earlier DAO legal structures while remaining enforceable through standard private international law.", "specific_name": "legal-wrapper-centralization", "conditions": [], "source": "The UDLC DAO Operationalizing a Continuously Evolving Universal Digital Law Codex Through Weighted", "year": "2025", "quote": "By rejecting any requirement for a legal entity, board, or registered agent, the UDLC DAO preserves pure code-based governance while remaining enforceable through standard private international law mechanisms.", "citation": "Wulf A. Kaal, The UDLC DAO Operationalizing a Continuously Evolving Universal Digital Law Codex Through Weighted (2025). SSRN: https://ssrn.com/abstract=5887242" }, { "id": "kaal:claim:6192998-002", "url": "https://wulfkaal.github.io/claims/6192998-002", "claim": "Solving the identity problem through centralized control fails on its own terms: it reintroduces rent seeking intermediaries who extract value, censor participants, and create single points of failure, which is precisely what decentralized systems exist to eliminate.", "specific_name": "centralization-tradeoff", "conditions": [ "platforms that impose centralized identity or rating control" ], "source": "Evolution of Domain-Specific Reputation Systems From Binary Validation to Citation-Weighted Knowledge Attribution", "year": "2026", "quote": "Second, the centralization problem: Platforms that solve the identity problem through centralized control8 introduce rent-seeking intermediaries who extract value, censor participants, and create single points of failure.", "citation": "Wulf A. Kaal, Evolution of Domain-Specific Reputation Systems From Binary Validation to Citation-Weighted Knowledge Attribution (2026). SSRN: https://ssrn.com/abstract=6192998" }, { "id": "kaal:claim:6421319-011", "url": "https://wulfkaal.github.io/claims/6421319-011", "claim": "If a small number of hyperscale firms control electricity contracts, GPU supply chains, and data center locations, the collapse of cognitive scarcity produces digital feudalism in which abundance accrues to the controllers of the compute substrate while the rest of the economy faces artificial scarcity imposed through infrastructure gatekeeping.", "specific_name": "Digital Feudalism", "conditions": [ "conditional on concentrated control of the physical AI substrate" ], "source": "The Collapse of Scarcity Economics", "year": "2026", "quote": "The result would be a new form of digital feudalism in which abundance accrues to the lords of the compute substrate while the rest of the economy remains subject to artificial scarcity imposed through infrastructure gatekeeping.", "citation": "Wulf A. Kaal, The Collapse of Scarcity Economics (2026). SSRN: https://ssrn.com/abstract=6421319" }, { "id": "kaal:claim:6421319-015", "url": "https://wulfkaal.github.io/claims/6421319-015", "claim": "The internet content case shows that when one form of scarcity disappears, economic power migrates to whoever controls the next binding constraint, which for internet content was the platform infrastructure for discovery and distribution rather than the content itself.", "specific_name": "Power Migration to Next Constraint", "conditions": [ "generalized from platform intermediaries such as Google, Meta, and Amazon" ], "source": "The Collapse of Scarcity Economics", "year": "2026", "quote": "This last observation directly reinforces the binding-constraint analysis in Section II.D: when one form of scarcity disappears, economic power migrates to whoever controls the next binding constraint.", "citation": "Wulf A. Kaal, The Collapse of Scarcity Economics (2026). SSRN: https://ssrn.com/abstract=6421319" } ] }