Exploring Decentralised Governance (Part II)
Traditional Governance: The Old Ways Have Problems
In our recent article, we discussed the fundamentals of governance and how they serve as essential frameworks for decision-making within an organised system.
Finding the right governance solution during the process of building a new organised system such as a country club, homeowners association, or a decentralised community of hackers, is no small feat and requires careful thought and design.
While researching the various models and implementations of governance systems in the traditional space to build the governance stack for G360DAO, we couldn't help but notice certain shortcomings of traditional governance systems. In this article, we will highlight some of these issues and explain why G360DAO has chosen to pursue a route of decentralised governance instead.
Limitations of Traditional Governance
Lack of Innovation
Upon observation, we found that many organisations still rely on outdated technology tools and processes to manage their decision-making tasks and actions. This situation has resulted in numerous inefficiencies in governance operations, which have become normalised due to the nature of traditional governance systems that are resistant to growth and modernity.
For instance, in local elections and town halls, community members and stakeholders are often unaware of ongoing tasks and voting events that their representatives are partaking in and supporting. There are few, if any, online dashboards or dedicated apps that offer live feeds or notifications of ongoing deliberations from local representatives. These (few) sources of live local governance events tend to be partial and/or constrained to a few minutes of airtime on radio and television broadcasts, which many do not engage with today.
Consequently, members of a community or town often lose their ability and opportunity to get informed and contribute their thoughts to influence the decisions of their representatives on pressing matters due to the lack of innovative solutions to facilitate their effective involvement. This often leads to public outcry when it becomes apparent that their representatives may not have made agreeable decisions, underscoring the importance of developing innovative and accessible governance systems.
High Dependency on Trust and Trusted Intermediaries
Most organisations require mutual assurances and guarantees between participants to function and partake in decision-making. To ensure the validity and enforcement of all agreements and actions, assurances and guarantees often require valuable information from participants, which may breach privacy preferences. Additionally, intermediary entities such as judges and regulators provide oversight to ensure compliance with these agreements and actions.
This is the common approach used in traditional governance frameworks and heavily relies on the submission of information and intermediaries. However, intermediaries are granted authority and power that may not always be used equally for all participants and cases, resulting in unfair dynamics such as censorship. For instance, in many parts of the world, there's a higher risk for minorities to get rejected or restricted from contributing to elections or suggesting proposals to be deliberated on, for any honest reason. Additionally, the valuable information gathered for governance interactions tends to be sensitive and poorly guarded, leading to the risk of unfortunate scenarios such as identity theft due to inadequate information security.
The reliance on high trust requirements and trusted intermediaries introduces overhead and cost, such as application fees and lengthy approval processes, in parts and processes of the governance stack that may not be necessary but included due to the inefficient nature of traditional governance systems.
This ultimately limits the potential for an organised system to scale and be credibly neutral.
Jurisdictional Constraints
In most organised systems that utilise traditional governance structures and processes, participants are usually required to be present at least within the geographic bounds of the system to contribute to governance events.
Such rigid requirements limit when and how certain participants can partake in decision-making due to reasons such as travel, work, or disability/health issues. In scenarios like city council meetings, where individuals cannot be physically present, they are not provided with opportunities or alternative means to contribute or represent themselves during governance events(eg. Voting). This poses a challenge for specific groups such as pilots, military personnel, and others who are required to be away from the jurisdiction due to work reasons. This issue hinders their ability to participate in the decision-making process, thereby creating a problem of representation.
To accommodate for these jurisdictional limits, there are extensions of provisions (in some organised systems) to enable distant participation in major governance events such as national elections. One example of addressing this issue is the establishment of remote voting stations at US embassies and military bases worldwide. This allows individuals outside the jurisdictional bounds of the US to participate in US elections and have a say in the decision-making process. However, it is important to note that this option is not available for local governance events such as district representative elections.
Jurisdictional constraints introduce rigid limitations that incur significant costs to accommodate everyone, causing inefficiencies in the governance of the system.
Inadequate Transparency and Verifiability
The lack of innovation in traditional governance systems create the need for trusted entities in order to scale, however, this comes at the cost of little to no transparency and verifiability of outcomes and processes.
To ensure the legitimacy and validity of any governance action, strong evidence of correctness throughout the entire process must be available and verifiable, and agreed upon as final, by all involved participants of the system. However, in most organisations and traditional governance systems, achieving this level of verifiability is challenging due to inefficient processes and structures that cannot function at a global scale.
For instance, imagine if every US citizen around the world had to check and count each vote cast in a presidential election; it would be nearly impossible to achieve. As a result, organised systems often introduce entities with high confidence to deliver agreeable facts and results for a given governance event. Examples of such entities include the Federal Election Commission in the US. These entities are trusted with high confidence instead of open verifiability and accessible transparency, which ensures that the appropriate processes and structures function correctly, and the outcomes are honest and accurate.
Unfortunately, such approaches run the risk of corruption and collusion among these entities. Moreover, without proper tools and solutions to verify processes and results, the principles of transparency and verifiability are unattainable for the average participant in the system.
In Conclusion
The limitations of traditional governance systems put the integrity and efficiency of decision-making events and governance entities at risk in every organised system. To address these shortcomings effectively, a more advanced path for coordination and decision-making among members of G360DAO needs to be established.
We believe that Decentralised Governance frameworks, which offer innovative processes and structures like Quadratic Voting and Decentralised Autonomous Organizations (DAOs), powered by Web3 solutions such as blockchain, will enable us to achieve accessible, transparent, and verifiable governance at a global scale.
Addendum
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