Community Powered: Governance beyond voting

Transcript

[Music] [Applause] [Music] [Applause] Hello everybody. I'm uh Rad from Harvest Finance and also representing Spectra Finance. Uh this talk is uh about governance beyond voting. Um, so those of you in the wrong room, sorry, we've locked the doors, so you get to stay with us. Alrighty. So, um, little nuance to this is, uh, generally applies to, uh protocols um, that have, um, like a quote unquote DAO associated with them. And, um, just

talking about how we need to go beyond just the sole reliance, um, of voting in terms of governance. Um, so we'll kind of start off first. Um, oh, a little offc center there. Can we How do we get this centered better? Let's try this. Come back here. There we go. All right. So, um kind of let's look over this generalization of of what is a DAO? This comes um ex uh directly from the Ethereum Foundation. So, what are Dows? A DAO is a collectively owned blockchain governed organization working towards a shared mission. Dows allow us to work with like-minded folks around the globe without trusting a benevolent leader to manage the funds or operations. There is

no CEO who can spend funds on a whim or a CFO who can manipulate the books. Instead, blockchain based rules baked in the code define how the organiza organization works and how the funds are spent. They have built-in treasuries that has no one no one has the authority to access without the approval of the group. decisions are governed by proposals and voting to ensure everyone in the organization has a voice and everything happens transparently on chain. So voting voting voting voting right like you you very see that wrapped throughout the theme of that. Um and there's actually two kind of takes on what are a DAO. Like when Dows originally started, it was this idea that um code is law. Um and everything is focused on developing that code, that code, that code. But since then, Dows

have like really uh evolved where you almost have standalone Dows like almost like just collectives of people not necessarily attached to a protocol. Um and then they're just trying to do something cool together in like this decentralized manner, right? Um and we have this even this quote from Lord Vitalik. Uh earlier Dows are organized around providing infrastructure. The newer Dows are organized around performing various tasks around a particular theme. So you can see there's definitely like these two different mindsets of of what a DAO is, what a decentralized autonomous organization um actually is. I think it's a little bit of a combination of both. Um but it's actually in my perspective voting is very very um secondary in what a Dow is

and again I mentioned before this is like very specific to um like if there's a protocol and then there's like this uh entity associated with that protocol um helping to make decisions right off center again so going into a DAO and going into a DAO and again talking about um voting voting voting right so does voting mean you're a DAO? Because ultimately that seems like what everybody implies, right? Oh, we issued you a governance token. We have some code out there on the blockchain. We're a Dow. We're decentralized, right? Um but ultimately we know that voting is extremely flawed in the space. Um concentration of votes and low overall participation means votes are often manipulated

um by these whales or even by like this kind of secret behind the scenes still very centralized group of people um running operations associated with that protocol even if they're claiming to be decentralized or there's a voting token out there and ultimately voting only seems to impact the protocol level. What about the rest of the organization, right? Like this DAO, who's doing the marketing, who's doing the treasury, who's doing the customer service, who's doing the project management, there all these other things beyond just like what's happening at the protocol level.

And if it's the fa same five people that launched your project that are then still making all of these decisions, it's likely they have influencer influence over these wells. It's likely they have a big chunk of tokens that they may be voting with. So very much like voting only has a small impact um on the code itself and it doesn't have the the most impact that it needs on the ultimate influence of what's going to occur around this protocol or the DAO. And the ultimate question is really if JP Morgan said we're going to launch our bank on the blockchain and then just hand out a bunch of governance tokens, would you call that a Dow? Would you say yeah they're decentralized now? Right?

But like that's the rationale we're following today. Oh, if you have a token and you're decentralized, you must be decentralized, right? Just based on that token voting. But like I don't think anybody here or or the OGs deep in crypto would really say like, "Oh yeah, JP Morgan's now decentralized and I'm going to trust them with my money because they gave me a token to vote on while they're still pulling all the puppet strings behind the uh scene, right?" So ultimately I think that really expresses or or solidifies the fact that like voting voting voting as really even defined by the Ethereum organization really isn't the crux of what these decentralized um autonomous organizations are and then you can see some um quotes from people token Bryce a good friend of mine most Dows are

lacking respect for their government's participants because they lie to them mislead them supply them with poor quality proposals and keep trying various kinds of shenanigans further hindering the enthusiasm for governance. Uh George Herrap, you still want to govern your f govern your favorite Dow when it's down 90%. Right? So we can see like participation when markets die, we see that there's a lot less enthusiasm within the markets um and within participation within these Dows. So if you're solely reliant on voting again, you're going to be then heavily influenced by wells or a very small population of people. Um and then a couple years ago, Andre Andre Krani said, "Picture your government." Now imagine if every policy had to be voted on by every citizen and if only quorum

was reached would it pass? How does that picture look? This is a DAO. Vote no to Dows again because it's just this hyperfocus on we need to vote on everything. Let's call the Dow Dowy McDow face, right? I I saw a funny article where some school was asking for them to vote what the name of the school should be. Schoolie Mc School face was like the fourth one on the list, right? So you can see like voting voting voting doesn't always isn't always the the greatest thing. Um, so now we come, let me center this again. So when I was working on revising this, um, this document and kind of seeing what other people's opinions were, um, I came across this two-year-old article um, by Vitalik.

It's on his blog. Um, Dows are not corporations where decentralization in autonomous organizations matter. Um, so uh, as a gist, beyond just vote signalers, the organization, i.e. the business operations should also be decentralized to ensure longevity of the protocol. So in some of these um snap examples that come directly from his article um again I'd never read this before and we're we've been working on this for the past two years with Harvest Finance and trying to organize the protocol itself through um or decentralize the protocol itself through decentralization of our community. And I was like when I was reading this I'm like whoa Vitalik talked about like this two years ago and we very much follow

the same path without him actually without us ever knowing he actually said this. So I'm happy to know that he agrees with us right or the other way around actually. But um in some of these examples he talked about like you have like this core maybe it was like the initially fundraised um treasury or whatever it is but then ultimately there's what he referred to as pods um and we call these kind of like circles of influence at harvest in a sense or circles of responsibility but essentially once these pods kind of say this is what our directive is please fund us they receive funding and then they receive no outside directive after that. So there's no again centralized core that even the fun of them they say you need to do this oh you're doing this poorly whatever these organizations or these pods become self-sufficient and

it's within consensus within these pods and maybe it's they vote on some things but again it's within generally consensus within these communities that make the decisions and that allow them to be decentralized because there's not necessarily um again directives coming from this original centralized group of people. um a true high a truly high level autonomy for pods where the pods accept resources from the core and are occasionally checked for alignment and competence if they want to keep getting those resources but otherwise act entirely on their own and don't take orders from the core highly decentralized and diverse core governance. This does not require a governance token but it does require broader and more diverse participation in the core. Normally broad and diverse

participation is a large tax on efficiency. But if one is satisfied, soap pods are highly autonomous and the core needs to make fewer decisions. The effects of the top level governance being less efficient become smaller. So you can see there's not really any mention of voting in there and no governance token is required. Right? So ultimately how are these pods or these um individual circles of responsibility um being driven? and he and he speaks there a little bit about it, but it's not this idea of flat leadership, right? Like people want to think when you create a Dow, you create these organizations, there's no leader, right?

And it's kind of like freef fall and it's whoever whoever has the strongest idea. But it's there is leadership, but there's nobody trying to be a dictator, right? Like let's just call them like seniors in the group, right? And they try to have a more calming influence. When somebody says, "Yes, let's name ourselves schooly Mc Schoolace." The senior may step up and say like, "Whoa, whoa, whoa. Okay, wh why are we trying to do this?" Right. Um, again, it doesn't necessarily require a vote for these things to happen because like Andre Kronji said, if you have to vote for every little single thing to pass, things aren't going to actually happen.

So, this is actually what the harvest community looks like. So, this is very generalized, but we have like these three circles of responsibilities very similar to what uh Vitalik was referencing as pods. So we have like our devco they're responsible for coding right and they may discuss with bisdev about the collaborations they're making bisdev isn't giving directive to coding and saying this is how you code this is how we expect it but we they say hey we've had a conversation with this group Camelot one of the the projects that we've been working with lately can we spin this up is this feasible can we do these things right and so you can see phys feasibility is the big thing between bisdev and coding um you can see with

socials this is generally what people think as community, your Discord group, um your Twitter accounts, marketing, whatever. Um again, working with those collabs of the people outside of your group and looking for those things that your community wants to be a part of. Um and then socials, working with coding, like the UX, branding, the feel and look. Again, all of these three groups are running independently of each other. They don't need to vote on what they're doing because they have some of these senior guiders helping them along the way. And then you can see how these interactions between them work to def facilitate this decentralized community.

No voting, no token. There's no central core leader guy. If one of us gets hit by a bus, somebody else is kind of in their place to take this over. That is true decentralization. That is truly making decentralized decisions without voting, without some whale coming and applying and having influence. And every section of harvest is filled with community members. So you we no longer have the same three core people who develop the protocol running things end to end. We now have this group of 20 plus people within each of these kind of uh pods or um areas of influence that are helping make these decisions and truly making um the product decentralized in terms of the DAO.

So kind of to re reiterate so daily operations daily operations managed by your community includes them in every facet of the organization um decision-making process eliminating the centralization of decisions without the over reliance on voting prices crash contributors actually work harder as opposed to voting less right like you're like oh things are going down people are losing kind of interest what can we do to kind of get things rallied up right like you have actually a lot more participation as opposed to the other. Now, don't get me wrong, voting is still important, right? I'm not crushing on voting. Voting. Voting is very important when you're talking about like the protocol level, right? But we seem to think about like voting or the way like even the Ethereum Foundation is like the

savior of all. Been plenty of people who stolen from Dows or have done manipulative stuff, past kind of goofy votes to make that um happen. And so that's why it's very important in my opinion that we are very more focused on how we are building our communities utilizing those people um instead of just this over reliance on here I have a token let me vote but ultimately I'm going to get overwhelmed um by some whale. There was actually an example of an attorney I was talking to recently specifically quoted by the SEC. There was a vote on a major project that they're looking at. 250,000 votes were cast. 240,000 came from one entity, right? Is that like decentralization?

Like again, that's what's that's what's gonna happen if JP Morgan spins up like a bank on the blockchain and they're just going to overwhelmingly push out any of these other smaller fish voters and ultimately pass what they're going to want to pass. And again, that's what we're doing currently as an a crypto ecosystem. We're just saying yes, yes, governance tokens voting we're decentralized. And I'm trying trying to stress here ultimately um that is not the end all be all. Um so a little bit again about Harvest Finance. We've been working on this. Um they were started by Unon Devs back in August 2020 back in DeFi summer when things were going crazy. Pasta coin all these crazy yield farms coming together.

Um but unfortunately like DeFi um along with all of the rest of crypto is very fragmented, right? Like if you want to find all these yield farms, you have to go to a hundred different websites. You have to deposit with all these websites. You have to yield farm with them and wait time and hope you don't get rugpulled. Um, Harvest Finance is actually um a yield farming aggregator. So, it tries to list all the best yields all in the same place. Um, you can easily deposit with like zaps, one click into any position and then jump right back out. Um, you can see this is like V1 of Harvest when we first launched very DGEN. Um and now through the strictly through community builders um what we call yman our bisdevs community managers our artisans our our artist we

came up with harvest v3 um within just like the past week and obviously you can see it's a a huge difference um from the the v1 that was originally launched by the centralized group again 100% developed and delivered by our community right and you can see that is actually powerful and like In my mind, we represent based on this system that we're setting up like what in essence people think of a DAO like a commune in in a sense everybody coming together working on this farmland to grow these resources um that the greater community wants.

And then the other project I represent and one of the ones I'm actually really excited about, formerly AP Wine Finance, um they renamed to Spectra Finance because everybody thought we were wine on the blockchain. So we had uh renamed it a little bit but um essentially this is a futures marketplace. So with yield farming um these are interestbearing tokens. So in in in theory you have theoretical value. If I deposit some something somewhere and I'm getting a 10% rate of return why I have a theoretical value over the next year of this 10% but it's locked like a a farmer growing crops. Those strawberries are still growing and I can't sell them yet.

But that plot of land knowing it's going to have 10,000 strawberries coming out of it again has theoretical value. So at Spectra Finance, you can essentially bring these interestbearing tokens to Spectra and get like a cash advance up to a year on that theoretical yield, essentially creating a yield marketplace where I can swap my Harvest Finance interest tokens for some web 3 gaming tokens and essentially unify the very fractured crypto space because right now DeFi people don't necessarily NFT or like web 3 uh people don't necessarily ly DeFi and so like there's these people all over the place and they don't know about like all of the different aspects within their crypto. They're very siloed

into their space but there are interestbearing NFTts like in web 3 gaming um you might have the crystal sword of destiny that's the rarest thing out there but it is interestbearing or it's uh like play to earn so it does have it's stakeable and you can collect things from it. Well, what if this 16-year-old kid, he never wants to sell it, right? But he does need money to move out of his house, you know, go out with his girlfriend, whatever. He could actually bring his interestbearing sort of destiny to Spectra Finance and take uh an advance on that yield from three to six months out or a year out and have money in his pocket without ever having to sell that very rare asset. Right? And then now that person in web3 gaming, he

comes here and he's like, whoa, look at all these other interest bearing assets that I could get into. We have like DeFi. Whoa, this 20% rate of return on, you know, stable coins. Or he's looking and sees realy has a property on the blockchain that's collecting rent and putting it on the blockchain. Well, now I can become a property investor and swap my sword of destiny yield for real um income from a property. And you can do that easily again without selling that sword, without selling that property. You're only selling that futurized yield. So as you can see now within one unified marketplace, users don't have to visit a hundred different places individually to participate in yield. And now you have web 3 gamers coming to the same place as NFTTers, as

defiers, as traditional world um assets all in one marketplace. and somebody I was talking to when we were boothing earlier, they do real world loans on the blockchain, but they spin up an NFT that is the one that's collecting the interest from the borrower, right? And so if you think about this, I asked them like, well, what do your customers do if they need money? They're they're locked up in your NFT. What do they do? They're not going to be your customer anymore because they need to sell your NFT to gain liquidity. Every project like yourself should ultimately be communicating with a spectrum finance to say, "Hey, never sell your asset. If you need some kind of liquidity, you can just bring it here and take an advance on that yield." And now they maintain

their customer relationship with you. They have a little bit of liquidity in their pocket. And these aren't permanently locked up. If they ever regain that liquidity that they borrowed, they can simply just unlock their asset, right? So, Spectra Finance not only provides this marketplace where everybody can easily swap various different interest rates and yields, it unifies the space and brings everybody together. So, they're telling me I'm out of time. I didn't realize I want to speak so much. Um, so ultimately I just want to point out to everybody voting, smoking mirrors, if you're thinking about participating in a DAO, you're in a DAO today, ask yourself, is this organization that I'm a part of that's associated with blockchain, are they simply calling themselves decentralized because they've given you a token and

they can cast a vote that can be easily manipulated or is every asset of their organizational structure actually utilizing community members like my myself to fulfill these key roles and actually make that organization decentralized so decisions that are made either at the voting level or at the consensus level are truly from the people and not just one guy with a giant bag of tokens. Thank you. [Applause] [Music]