Hello. Kehmor here. Cobi and I have had a ton of chats since I joined the Vesta family; sometimes they’re casual, sometimes they’re deep, and sometimes they’re way too personal (I don’t have a filter).
One topic of conversation that crops up all the time though is decentralization.
#Decentralization# – that buzzword that gets thrown around the #web3# space with reckless abandon. Sometimes it means that the project you’re interacting with is using a trustless revoked contract. Sometimes it means getting to take part in a meaningless vote prescribed to you by a project founder. Sometimes it means literally sweet fuck all.
Well, to Cobi and I decentralization is a very important word. When we held our recent project leadership election, I quipped that we were unironically the most decentralized project on Metis (though we were fairly confident Cobi would win). The truth however is we are very far from our vision of what true decentralization should look like; and some of the problems we face in actually getting there seem insurmountable.
We decided, therefore, to share our vision with the wider web3 community. We hope not only to add to the dialogue about this important word, but also to invite feedback and suggestions on how we might achieve our vision.
Our vision of true decentralization:
Our ideal vision for VestaDAO is one of true holder empowerment. We want to allow our holders to choose their own leadership in a dynamic way. As I mentioned above we already held one leadership election; we will definitely have more and are simply deciding how often.
We would like for any incoming (or returning) leadership to be allocated x% of the current project funds to use as they wish to develop the project during their term.
We would like holders to have the ability to remove leadership before the end of a term if the community sentiment is strong enough. This might be for instance if a new leader proved to be a bad actor, or simply incapable.
We would like any candidate wishing to run for leadership to get a fair platform, and the chance to communicate their ideas in an effective way.
And finally, and most importantly, we would like this all to be trustless. We will dive into this more in the “problems’ section below, but we feel it is important that none of this relies on the current leadership simply “playing ball”.
Why Leadership?
Why leadership elections? Why not just let people vote on a per issue basis? Well, multiple reasons. First of all this would make any action painfully slow; having a discussion with hundreds of people every time you want to make a move would mean processes that should take days take weeks instead. Secondly, the mechanism for setting this up and ensuring a fair way to allow all holder proposals to be fairly heard would be an administrative nightmare. Finally, there’s the problem of shortsightedness. I touched on this a little bit in our recent spaces interview with Stablis. Holders of tokens can often be very reactionary. How many times have you been in a telegram and seen someone go on an unhinged rant about “wen marketing”. Bear markets happen, dips happen; pivoting wildly every time they do is likely a recipe for disaster. To use a quote often misattributed to Winston Churchill:
“The best argument against Democracy is a five-minute conversation with the average voter.” – not Winston Churchill
We don’t think this is quite true; but we do feel that mixing the emotions of a volatile market such as crypto, with day to day business decision making is not the experiment we want.
We believe having set term leadership for the project is the perfect balance. It allows holders to choose the direction they want the project to move in, whilst also giving those controlling the project the freedom to make necessary moves to benefit the project in a long term way. Often these moves might be unpopular in the short term. An added bonus is it makes the project more attractive for those looking to hang around for the long term; a key ingredient in forging an active community.
Problems and the beginnings of solutions:
I mentioned at the beginning that our vision seemed unobtainable; we really hope this isn’t the case but here are some of the obstacles we’ve identified in achieving our goal. Some of these might have existing solutions that we simply do not know about, we would be delighted if this is the case.
Vote Manipulation and bad actors:
The Problem:
This is a problem all projects that allow votes need to contend with; small market cap projects most of all. How do you prevent vote manipulation through the buying/borrowing of tokens? Obviously gaining access to a token contract/project website/project treasury can be extremely lucrative to a bad actor. Where there is strong incentive to steal there is also a strong chance you’re going to get bad actors coming along. How do we allow a fair vote whilst also preventing such individuals getting control of the project?
Partial Solutions:
Candidate Minimum Holdings:
One idea we floated was having a minimum number of tokens that need to be held for a certain length of time in order to be eligible to be a candidate. For the sake of argument let’s say 1% of supply for 3 months prior to the election. This would make it less financially viable to quickly try to gain control of the project, though it would not necessarily eradicate the problem.
A consideration however is whether or not limiting candidacy to those with the funds to achieve this is fair? We don’t believe that someone’s bank balance is necessarily a good indicator of how good their ideas are.
Reducing Incentive:
One of the best methods of dissuading bad actors is to get rid of all incentive for them to bother. Unfortunately this is very difficult. One method we’ve discussed (and we will likely do something like this no matter what) is to move the current project owned tokens into a vesting contract that are returned to the project wallet over a schedule of years; this would act as our operating budget and among other things, would reassure investors that the project wasn’t going to dump on them.
Even so; let’s say a project has a $1million market cap (we don’t but we can dream); even if the vesting contract made 1% of total supply available per year, that is still 10,000 good reasons for someone with no moral compass to try to get hold of it.
Furthermore; the project funds are not the only way a bad actor could take advantage of project control. If our project develops in the way Cobi and I are hoping then our website will become a place people feel they can reliably get trustworthy unbiased information. You don’t need to have been in web3 long to know how disastrous it could be for the wrong person to obtain control of a website that people trust, or even a telegram/discord server/twitter account.
The hand over of power:
The Problem:
When Cobi and I agreed to take the plunge and hold our leadership election it was genuinely scary. We were almost certain we would win, but thought it important to do anyway.
We also had the benefit of being a very small project so many of the above issues didn’t impact us. One thing we firmly agreed with each other though was that if Cobi lost; we would 100% honour the result of that election. This will be the case no matter what for future elections, whilst Cobi and I are the project leads.
We might not always be the project leads though. and this presents another problem; how do we ensure the project is handed over when it should be? What if a future project leader doesn’t want to play ball?
Partial Solution:
We believe for the #web3# side of things there are likely smart contract solutions; we don’t know exactly what these are yet, but there’s a lot of smart people we know who can help with that. If you have ideas please let us know!
The bigger issue is for the web2 assets; which is currently a much more valuable prize for our project. How do we ensure that a project lead hands over things such as the project website, the twitter account, the telegram channel?
Furthermore, how do we control assets built using project funds by a new project lead?
Conclusion:
We appreciate this is a lot of questions; many of which may never have an answer. We believe, in fact we know, that there are many more nuanced situations to address in order to reach our vision of perfect decentralization.
We hope that we will be able to achieve it. We promise that we will try, for as long as our holders want us to. Thank you for reading, and please know our DMs are always open.
