DAPPCON 2019: Anti-rival, Collaborative Networks - Matan Field (DAOstack)

Transcript

hey everyone okay so today talk will be somewhat different than my usual ones I've been told not to speak again about the whole graphic incentives I've been requested so it won't be a promo graphic on sentence it wouldn't be about protocol design I will I wouldn't demo alchemy so to be a very meta kind of talk okay so it's a risky talk it's a very high level I think these kind of topics are not maybe closely related to what we do every day but I think are often neglected so this will be my humble attempt to touch upon the bigger picture or actually a smaller part of the bigger picture so you can help in that if you feel that I am straying too far away or just losing you please just

ask me a question and bring it back all right so I think I don't need to convince any here in this room that those are hot right they're very trendy may-maybe the hottest topic in the india microsystem right now but it's not that clear why and why I'm saying that is because it's not even clear what is a Dao I think if you asked in this conference 10 different people what now is you likely get 10 different answers and more so neither of those answer will be really well-defined or clear or completely tangible and even if that answer is somewhat clear it's not at all clear why thou should be better than other things

right so it's still we are at the skeptic phase and where we need to go through penetrate that's that barrier which is which makes a lot of sense in this stage so this talk will be a very humble attempt to maybe touch a little bit about what at least I think thou should be or can be and maybe somewhat shedding some light why they can be better than existing structures ok so what is it what is it downing so maybe it's a corporate kind of like a corporate but more open and decentralized that's like a common answer we see often or maybe it's an open source collaboration we're already familiar with this stuff or

purpose of evasion happens for decades but now that is a creep with consensus so that Billy side own distribute budgeting and so on horse or maybe perhaps it's it's a social network something more like Facebook group is social network that is now suddenly armed with the power to own fund a raise funds a managed budget and so on so force decide and own so what is really so the the the one common denominator all three of those is that the additional move factored additional element is the same price governance so this is key so for through throughout the years to the course of searching and trying to imagine what a Dow is and then designing for at least for me my

intuition was more tended to the first two so it was kind of like in between extrapolation of the corporate structure but more decentralized or something like one open source collaboration and today I want to suggest that maybe maybe thou could be something more closer to social networks that previously previously we we thought about now honestly it's not there is no there is no one clear answer here because really they're gonna be many different kind of styles many different use cases and different use cases will sit in different points on this face face so there is no one answer so maybe it's more like a design question how we in our stack see a douse and how our designing for them and I'm suggesting

I'm proposing that we are going to slightly drift more towards the social network idea and in order to also project that idea better we also give it slightly no name slightly different name just to emphasize its characteristics so rather than those in this talk I will call them collaborative networks so social networks plus the ability to decide on to manage I would call that a collaborative network okay so why a cloudy network is better so firstly better than what so social network is actually the easiest to explain and that's also why maybe it's the best value proposition so social networks

they are very powerful today but they cannot raise funds you cannot collective manage them they cannot pursue their goals beyond the conversation level right so it's clearly we if we in you entitle social networks with these abilities they are become more powerful I think much more powerful then the I to the second is also easy open source collaboration well up until recently cannot really again hold fun distributes funds visiting budget this is with the ownership of their product so again this will definitely enhance open source collaboration and and third this may be the harder harder to sell so we want to argue that companies as they are structure today they are hard to scale and more so when they scale it's hard to maintain alignment of interest at scale

so then we claim that the Dow's will or cloudy networks will do that but that me that requires approve so it's not it's far from trivial that you know the centralized governments protocol will actually do that and that's maybe why it's harder to understand that ok so now I will try to so this will be the second part of the talk and I mean which I will try to take a step back zoom out and try to understand not for specific use case you try to send why maybe larger coordination not only gonna be preferable on top of existing structure but actually may be inevitable or ineffectively superior so for that let me like let me start

from the beginning then let's discuss the free market so what is the free market so the free market I argue is the great great means to coordinate an online interest of many many agents a large number of agents please decentralized we love the synchronization here its self-organizing its scalable super effective and he's inspired by economic biomimicry of evolution through competition natural selection so so far it looks very very good however this is something that is less appreciated I think and I want to argue that the free market also has failure modes it's also fails to align the individual and collective interests

sometimes by incentivizing dividuals to act against the collective benefit so you know the premise of free market is that it actually aligns the individual and collective collective interest and I want to argue that it's not always doing so and I would just throw one reason although there are a bunch of reasons there are a bunch of failure modes like game theoretic failure mode I will just deep dive into one and this one I call hidden rebels but so will die will dive deep into that but assuming that once the the our failure modes in the free market it also means there is more opportunity for larger corporation becoming the winning strategy over pure competition and I and I will try to argue that this is actually extrapolated

process where we start with real competition over time we get to in a sense you will see not exactly pure cooperation but we'll get there but much much higher degree of collaboration any question by the way please just feel free to stop me yeah oh I will definitely give examples that definitely yeah so price is very very abstract and that's exactly what I'm going to do next you really stuck let's see how I can get out of that the idea for a Mac user it's a oh okay yeah perfect okay so let's

let's let me just repeat what I said but in more details and this this will need to take step by step slowly okay so I want to argue that higher abstraction we are constantly creating environment with higher obstruction and higher complexity of production and then higher abstraction and competitive production increases hidden variables and does the opportunity to manipulate the market leading to margin of the optimization of all hidden variables I'll take I'll break that apart okay so in ancient times when I bought an apple there was a pretty good correlation with how they often looked and how good it was you know how tasty but more so how nutritional it was right it was a good correlation whereas today with such a complex environment we use so many different

elements in the production chain that there is there could be very bad correlation actually between the visibility the visible and the heat of rebels so an apple today can be a very poisonous or very non-traditional and yet look amazing to me so I would almost be impossible to read from the Apple if it's a good product or not a good product so there's a lot of thinner Bibles there more so if I'm a farmer and I what I would optimize for right I would optimize for the visible variables right I want to sell the best but I will actually do demise for the hidden variables I will reduce my cost as much as possible to get the shittiest visible

these invisible variables as much as I reduce my costs so for example for the example of the farmer well I can use a chemical and that chemical reduces significantly my costs now maybe I know that that chemical is poisonous maybe I don't know I just don't ask that I will use that chemical because that will reduce my cost and will increase my gains at the end of the months now maybe I wouldn't do that but someone else will do that and eventually we will all together it's a race to the bottom we will marginalize the invisible variables to the very much bottom at the end of the process and that's how we get very beautiful apples which are very non-traditional sometimes poisonous and only 20 years after we discover that you know some some very wide a cancer that

is due to the some chemical that were used heavily in industry and we just didn't know that or didn't bother to ask before so again let's try to just repeat that step higher obstruction of complexity of production means much much more hidden variables more hidden variables means that I have an opportunity to manipulate the market by be optimizing the hidden variables and optimizing the visible variables and if I don't do that someone else do that eventually all do that and collectively we're marginally be optimizing all hidden variables and that's where we're going in in all industries okay so the next step if we are marginally D optimizing all hidden variables that

increase the conflict between individual and collective interest so now my interest usually we said we learned in a free market that the free market aligns the interest of the individual and the collective but here we just see the opposite right I have an interest to produce the shittiest product right as long as nobody can discover that in a finite time in a short time that will hurt my production so there is growing conflict between the individual and the collective interest which is reducing them this activity of pure competition now reduce the fact if 'ti of pure competition means increasing the opportunity for wider tighter and more effective coordination which then also requires higher higher obstruction now

there are other factors I try to just slice one one angle of that bigger picture there are other factors that are feedbacking loop feedback King and pulling from competition to collaboration this is just one of them I think this one is self sufficient so that kind of a closed loop because then wider tighter and more effective group coordination then pushes up even further the level of construction complexity of production and now we see there is a feedback loop right so we're constantly moving into more production sorry more complexity of production increasing amount of hidden variables increasing manipulation of the market increasing or decreasing effectivity of pure competition and increasing opportunity for wider collaboration so this is this is just a drift is actively appearing

and again either drivers is just one feedback loop there are others and for example I just named once if Network aspect you can analyze a similar to look with Network effects and all of them push it together in the same direction from competition to cooperation now you might say this is this looks too idealistic right we're going I'm saying that we are going to end in a pure cooperation so actually I'm saying we're not going to add in pure cooperation and what happens is something else so we start with competition natural selection let's start with the sales level then I'm arguing that on a general ground there is constant rifts between tangible to obstruction with a constant rate between competition to cooperation and there is

constant drift between individual selection the individual natural selection into group selection because now better groups are selected and then at some point there is a critical threshold of coordination that I want to come that although I cannot support that I wanna conjecture it's related with the emergence of self-organization that suddenly the groups themselves become being vigils and there is the next level complexity organism in this case will be humans and again competition a natural selection between humans and again tangible will become obstruction competition will become cooperation individual selection will come group selection there will be a critical threshold of coordination in emergence of self-organization then suddenly it

will be a new entity the next level complex the organism which we call dows or gravity networks but those is shorter so I put that and then again we start all over the place competition natural selection but this time between dolls these dolls will eat each other and kill each other and swallow each other and so forth so no know that this is not it's not competition versus cooperation competition profession are actually closely tied together in the competition at the higher level of complexity is actually the driving force for strong in coordination at the lower level okay that's that's really maybe the most important conclusion of the talk the competition at the higher level is higher level complex the easy driving force of stronger coordination at the

lower level so this will be the tech waste if you completely lost me or I lost your or just mumbling this stuff this will be my takeaways if the conclusion so firstly evolution is not as we usually talk just about competition you look exactly a song and dance between competition in cooperation I argue that pure competition is increasingly failing at increasing complexity I argue that cooperation is increasing in that together until a phase transition occurs where cooperation becomes suddenly that's that's when I said suddenly I'm in phase musician when suddenly cooperation is the wing strategy and I also conjecture that that's you late with

self-organization and then there is no emerging creature that maybe have something of the traits of corporates because they came decide they can they can collectively own they can have sovereignty like collective sovereignty but I would I would like to suggest that perhaps they look more like social networks and for that we call them collaborative networks and finally the centralized governance II the key element for this leap thank you all right so we have humans cooperating we already have them in the form of countries perhaps and companies competing with each other why is the decentralized governance the next key leap as you turn your last sentence yes that's a really good question so again

it's it's these are these are it's a balance it's a competition between competition cooperation so right now the the level of cooperation or if you wish you can translate that to the cost of projects the cost of donation is too high and I'm just saying that once cost of coordination becomes low enough lower threshold suddenly cooperation become will become the winning strategy and I'm also conjecturing but again this is not some supporting I'm conjecturing that the crossing of the threshold that this barrier threshold of coordination cost is related with self-organization self-organization is related with sentence governance so countries states companies they are you know there are better cooperation than what we've had 200 years ago but are not enough

coordination so we can go back to the you know the first slides basically those those entities do not maintain either do not scale or do not maintain alignment of interest in activity at scale so you need that coordinate that coordination has to be lower and I argue for that you need self-organization or cell formation or decentralized governance you need that in order to allow for increasing the scale of cooperation while maintaining alignment of interest and if activity