Kate Beecroft on the critiques and possibilities of DAOs

Lisa: So Kate, thanks for coming on the podcast. I’m looking forward to having this conversation.

Kate: Yeah, thanks for having me. I’m super excited to be here.

Lisa: So maybe we can start by you telling us how did you get involved in the world of DAOs and web3 and crypto, and what has some of your work looked like in this space?

Kate: Yeah, so probably about six or seven years ago, I started getting involved with kind of an old bastion of decentralized organizing which is known around the world. It’s called Enspiral, and it was at that time kind of a collective of entrepreneurs coming together to build human processes for organizing without hierarchy, for organizing in a way that was in line with the world we wanted to see.

We were doing a whole bunch of things, running accelerator programs, building applications. Loomio was quite a well-known decentralized decision-making application that came out of a team from Enspiral. And towards a few years ago, I got really involved with one of the applications which was called co-budget, which was around how do we collaboratively allocate shared resources using an application.

So we started to steward that application, and at the same time, it was kind of—it wasn’t really the start of crypto, it was a bit later on, it was around 2017—we started to get involved with a group called DAO stack who were building something somewhat similar on chain or on the blockchain, an application called Alchemy, which was about how do we spend money as a DAO or as a decentralized autonomous organization, how do we spend our Treasury so that it’s not just a couple of people deciding which projects we fund, who gets to do the work. It was very much an experimentation, a big experiment in how do we use this wondrous technology of blockchain for DAOs and start to spend money collaboratively.

So we started a DAO as part of that—the Genesis DAO. This was kind of a stage within what is known as web3 of what I would call the first wave of DAO obsession. We’re in the second wave now, but that was really the first wave, and that was after the big DAO hack. It was just people who saw the opportunity decentralized autonomous organizations could provide, and everyone was so excited. It was like, “Hey, we’ve got the solution. The solution is governance actually.” And I was like, “What?”

But so from there, I took a bit of a break out of actively being involved and I started writing some research papers around what is blockchain for good and taking a bit of a step back and looking at the ecosystem. I wrote a paper with Jared, Clara Breck, and Francesca Pick called “The Dissensus Protocol,” which is really looking at this notion of the fork, which is very much a part of crypto and DAOs. The fork is when you basically create a new version of the protocol or the application and you take the followers with you that want to use that new version. We were kind of looking at this phenomenon as like a fundamental protocol within DAOs and kind of critiquing that a bit.

And finally, I’ve ended up at a wonderful protocol organization called Centrifuge, and Centrifuge bridges assets in the real world like invoices, real estate, royalties from Spotify—all those. Spotify’s a bit outright, wasn’t a bit canceled—but it bridges these kind of real assets, real collateral to DeFi (decentralized finance) so that borrowers can finance their real world assets without banks basically, which is pretty cool.

Lisa: Yeah, awesome. Maybe we can go back into some of those things that you mentioned a bit later in the conversation, but I think what you and I were really interested in talking about was kind of opening up some of these criticisms and critiques about some of these technologies and the ways that people are gathering and using them, and sort of examining which critiques are valid, which are unreasonable, you know, how to discern the hype from the potential. So what are some of the main criticisms that you hear and what are your thoughts on them? Let’s maybe just like start throwing them in and talking about them together.

Kate: I mean, this is a really interesting just the notion of the critiques, right? Because right now, there’s a bit of a Twitter war happening around to critique or not critique. Like there’s this strong push from some of the technology lords who say, you know, “if you can’t build, shut up,” which is really—is that like the only way we can kind of do things? If you don’t have, if you can’t build your own version with technology, then you don’t get to criticize what we’re doing.

And I think that that is a bit scary for me because at the heart of the paper we wrote, “The Dissensus Protocol,” it’s kind of this notion of dissensus. We’re actually saying is fundamental for well-functioning societies, it’s fundamental for democracy. Dissensus is a rupture, it’s a break in consensus. Like without the ability to have dissensus, which is to have strong disagreement—which critique is a part of that—if we don’t have any room for dissensus, we don’t actually have a free, Democratic society.

It’s allowing for the fact that incompatible positions do arise, they must arise. And through the kind of negotiation and transformation of thoughts and ideas and critiques, yeah, you can have a split or an exclusion, you can have a fork, or you can just build your own. You can build your own version, you can take all your followers over there and you can do your own thing. But we want to not fork, I don’t think, all the time. We want to stay here in the trouble, to quote Donna Haraway, and see what going through these critiques and actually listening a little bit to the other side—and that goes for the people who are making the critiques as well.

Like it’s great to think big, think philosophically, think politically and look at the bigger picture and say, “Hey, this is extremely damaging,” but if you expect the other side to listen, you’ve got to also listen. So this is what I’m really interested in talking about today is like, how can we look at some of these critiques, look at the critique that’s being made, and look at the other side?

Lisa: Yeah, I’m super interested in that. It’s also making me think about, there’s been some backlash in the new ways of working movement also, like a couple of people who are speaking out against teal, for example, and saying there’s no such thing as teal, or like teal is—and then people often tagging me in conversations like, “Lisa, what do you think of this?” And I’m like, I’m all for it. Like, we can’t just not have criticism of this stuff. Like then we’re not, then we’re just going to be in this bubble and nothing’s gonna grow or develop or evolve. So I’m all for it.

Kate: Yeah, for the record, I think teal is a bit—I’m just kidding.

Lisa: Can we drive into some of these critiques?

Kate: Yeah, and obviously there’s so much out there that this is just a bit of a selection and a few angles of looking at these critiques. But one of the main ones like is bandied around all the time, and I have even used this word—take web3, DeFi (decentralized finance) is a mode of hyper-financialization.

This is a really common critique. To the environment, obviously, it plays more broadly to crypto rather than just DAOs, but it’s kind of saying instead of the promise of ownership and this democratized governance, which was the sticker, we got pay-to-play. In order to participate in many of these communities and many of these DAOs, you either need tokens, you need to be a token holder, or you need to own an NFT, actually, sometimes. And the more valuable your NFT, the higher kind of standing you have in the community. The same goes for tokens—the more tokens you have, the more power you have.

And so adding to this critique, which is getting really intense right now, the NFT thing, right—simple tokens which is basically an entry into a blockchain that represents ownership of something unique which usually resides elsewhere, not on the blockchain. And so there’s a very strong critique that this is just artificial scarcity, that the social status provided by ownership and the ability to trade them in secondary markets is really not—it’s really opposed to this other vision that was possible for a moment of the blockchain and crypto facilitating this shared non-rivalist place where we can solve a lot of problems that we have in society with underfunding public goods.

So basically, this critique is saying the NFTs represent a triumph of value exchange, capitalism, and markets, and any other exchange ways of exchanging have lost. Basically, this is the ultimate triumph. And this takes place within a metaverse, which we’ll get to. And so entities don’t so much offer a technical innovation that will reroute the mode of digital production, but they just give another very strong crutch to capital, to capitalism and free market theory, which is interesting.

And some of the most—the biggest, loudest critics of web3 have said NFTs have value only to the extent that bragging rights offer utility to those who care for them. Like that’s it—it’s bragging rights. And in doing so, they’re forced—like institutional art system institutions like Sotheby’s, Christie’s used to monopolize the bragging rights, to play their game, right? So the critique here is that NFTs in no way subvert structure of property rights in a meaningful way.

But on the other side—and jump in whenever you want here—having, I’m in this space, and it’s kind of like, “Oh, you know, we deserve to be paid,” especially artists. And our friends Richard Bartlett and Stephen Reid made an argument—I don’t remember which podcast it was on, but the other day—that artists, these artists that are benefiting from the NFT craze, absolutely deserve the right to be paid and paid well. And some people, there’s some stories of people being lifted out of poverty or, you know, life-changing money.

Lisa: Right, and I was saying, you know, on a Twitter thread as well that I was listening to one of the episodes of the “On the Other Side” podcast, and they were talking about this criticism in the language of mercenaries versus missionaries, and that there’s this sort of criticism of like, “Oh well, you know, people are just in it for the money though. Like, that’s not very noble or something.” And it’s like, okay, but people deserve to be paid for their work, and we’re not criticizing traditional organizations in the same way.

So there’s a lot of pressure on new models to be completely utopian and noble. And I’m not saying there aren’t problematic areas, and we’re going to go into those in this conversation, but it is interesting to me this—yeah, these very high standards that we’re putting on people. And I think there is an opportunity, as you said, to kind of bring more money into the places where money has previously been scarce for activists and people. I mean, they contribute an infinite amount of value to our daily life.

Kate: And it’s, I think what you said—like there’s always been a narrative that it’s noble to be a poor, struggling artist. But in the world we live in right now, that’s—it’s really, it’s hard to make that judgment and say, “Okay, this is how it’s always been. You better stay there.” And it makes being an artist or being an activist sometimes into a very privileged occupation, and we can’t afford for that to be privileged as a society.

And I think one thing we were talking about the other day is there’s also the strong sentiment that the millennial generation, our generation, and I think it’s gen Z younger, have got a raw bloody deal when it comes to the economy. Like in this idea of upward mobility, it’s where I’m from in New Zealand, you absolutely need to have wealthy parents in order to buy a house. And being a renter is really not a viable option because we have terrible tenancy laws. So average parents? Nope. If you want to be a surgeon or a banker? No, capacity problems.

But millennials and gen Z-ers have created this fantastical development of a totally new economy, and it’s huge. It’s like a serious—I mean, threat’s maybe not the right word, but it’s a serious alternative to the kind of economy that we’ve grown up with. And many people have escaped the trap of a nine-to-five existence and scraping by, or just taking being okay with this idea of, “In order to live, you need to sell your time at the going rate of someone else that decides.”

So it’s pretty interesting to look at it from that angle.

Lisa: Yeah, and I’m interested to hear about that and to hear about some of the kinds of people that you’ve interacted with and that you encounter in these spaces.

Kate: Yeah, for sure. I think there is a big critique that web3 and the people who are in DAOs—it’s not very diverse. It’s a lot of the same people as web2, which is, of course, the internet that we know and maybe don’t love, owned by big five tech companies. And the people that develop that, usually of a similar type.

And I think that that’s true sometimes, but in my experience, I’m working with people that I would never have had the opportunity to work with. And they’re benefiting, hopefully, a lot. I mean, in one of the DAO squads that I’m in, we have people from India, from Turkey, Ukraine, Mexico, Guatemala. We have a guy whose main job is in a fruit store, and he starts work at 4am. And after hours, he’s making this transition to working full-time in DAOs. And with that, he’s going to be able to spend way more time with his daughter, and I think that that’s super cool. Like, I would never have been able to—

And it’s really funny. I’m working with this guy from Ukraine who I’ve never seen his face. And this is something super interesting about DAOs. There’s this big focus on the autonomous part, which people in DAOs often interpret as anonymity or pseudonymity—I’m not showing you my real identity. And it can make DAOs, especially large ones, feel like strange apocalyptic versions of the future. But you’re actually in a meeting with 30 people, and most of them have names which are like “fatty ass,” “doggy poops,” “hackers 765,” “mutant hand seven,” and you’re like, “What?”

So they try not to dox themselves or let their real identity out. And you might be working with some of these people for six months and never see their real face. And then you figure out, you know, they can’t—one other person I’m working with is from somewhere deep in Russia. And we don’t have—we can’t really just get on a call fluently, but we’re communicating through just very good vibes, sharing memes, jokes.

So I think that this is really interesting. We’re just in this squad doing work, solving problems, having a really good time for me with people that I would never have had the chance to work with and who are really benefiting from access because in places like Russia, Ukraine, Turkey, things are—in terms of the access to finances—extremely precarious.

Lisa: No, that’s super interesting. And I don’t know if this is a good road into one of the other critiques that we’ve talked about, you and I, before you know when people say, well, it doesn’t feel very human, all of this stuff. And I’m guilty of this critique also because I haven’t—I’m not in any DAOs, and it’s sort of really challenging.

It’s interesting, I’m sort of holding this tension of like, hmm, how can you build trust with people when you haven’t seen their face, when you haven’t spent time with them, you know, maybe when you’ve never spoken, even heard their voice? Like, that to me is super fascinating. Like, how do you make decisions together? How do you build trust? How do you collaborate when all of those norms of how we normally build trust are sort of out the window in some ways?

Kate: Yeah, absolutely. And I think this is a critique that comes from the world of self-management or new ways of working, where we do put a lot of emphasis on trust and relationships and connection and culture. And there’s a large kind of thrust of blockchain which is to remove the need for trust, take the—you don’t need to trust each other because we have a technological fix that means that it doesn’t exist. And I think that that was, doesn’t need to exist.

I think that that was very much thinking in about 2016-2017, that finally the human problems that make everything sort of hard, we wouldn’t have to deal with them so much. And I think within web3, that mindset has really shifted. Even Vitalik, the founder of Ethereum, has said, “I was a bit naive about that.” And I think that we do have to—we’ll always have to work with people.

So I think people have really come around to that. But at the same time, we are working within these very remote, kind of strange, anonymous contexts. And this is where the idea of “there’s too much metaverse”—like we are destroying the fabric of our human relations because we’re spending all our time on the computer in a digital realm. I mean, the metaverse doesn’t quite exist yet, but I’ll just pause.

But yeah, I think a lot of this judgment—I mean, all the critique is, you know, this is to remove, it’s too inhuman, it’s too digital. We’re going off into this world where we forsake social relations, and we’re bringing on a very big host of problems from loneliness to depression to a break in the social fabric or community that enable us to solve problems together and get through the big disasters and attempts on liberal democracy that are surely on our doorstep.

Well, it’s kind of scary. On the other hand, there is actually a lot of community being built in DAOs. And it is hard when you don’t see someone’s face and you don’t know their real name and you’ve met them, but I think I really experienced a lot of trust still being built. And humans can communicate in many other ways and through many mediums. So I think there’s still a lot of hope there.

It’s very different to what many of the decentralized communities that we were involved with in the past prioritize. Like in Enspiral, the big priority is a connection to each other in a face-to-face way, in a human way. And this is, you know, it’s almost rooted in Tao Maori, which has a strong kind of grounding and acknowledging the ancestors and the whakapapa and the land in Aotearoa. And this compared with the metaverse is just like a completely different story.

But yeah, I think that there is still a lot of connection happening with people from all around the globe that would never have met, and this holds really a lot of potential.

Lisa: Yeah, it’s super interesting because I’ve been, you know, listening to podcasts about web3, and it does seem like there are people coming from the community building space now and sort of applying some principles there. And one obvious thing is people that—people in DAOs will have gatherings in the future maybe, but then that’s always going to exclude people who want to remain anonymous or for whom travel is not possible or things like that.

So it is interesting to me—how do you—what are the ways then that you build trust? Or maybe that’s the wrong question, right? Because you’re saying that maybe trust is assumed, and it’s more about creating vibes or whatever the jargon is.

Kate: That’s definitely the jargon. But also DAOs do meet up. I mean, there’s crypto conferences all around the world. And there are many different types of DAOs. There are protocol or platform DAOs where there’s a protocol that’s usually started out—it’s built by a team, like an organization, and they’re building the protocol. And then what happens over time is they progressively decentralize this so that everyone that uses this protocol has the token, the network token or the governance token, that they use as a community to decide, “Okay, which integration are we gonna use? How much should the treasury spend on X proposal?” Blah blah. So it’s kind of a platform or a protocol.

But there’s also creator DAOs. So it’s like, “Hey, we’re all creating a certain type of NFT, and we’re going to do something with the proceeds together”—that’s our DAO. There’s service DAOs. Like friends of mine have a web developers DAO called diorg, and they’re basically like a freelancers’ collective, except they build the technology for other projects in the space. And they are paid in crypto, and they operate—I don’t know which DAO technology they use, but it’s basically like reporting a freelancers’ collective on chain.

And you have other investment DAOs where the group basically decides what they’re going to invest in. And then social DAOs, which are like communities—Friends With Benefits, the famous one.

So there’s all these different types of DAOs. And they’re basically—all of the big protocols or the famous crypto names have a DAO beside them or around them. And they’re meeting up at these conferences. And they’re even starting to do like—in Lisbon last year, Fran and Elena from Greater Than did an off-site with the DX DAO to help them to work on some of their challenges, which were, you know, the challenges that all organizations face about who’s doing what, who’s taking leadership, who’s burning out, that kind of thing.

Lisa: Yeah, so this makes me think about another thing that we started talking about, which was governance and decision-making. And my understanding from you was that when you make decisions about things, there are slightly reduced options compared to people who are maybe used to consent-based decisions or integrative decision-making or generative decision-making. Can you say something about how that process works and the kind of advantages or disadvantages of how this—how that’s typically done in DAOs?

Kate: Yeah, so the kind of baseline decision-making type is consensus. And that obviously doesn’t mean 100% consensus, it means usually 51% majority. And I think that that is totally apt for very large groups because doing a consent-based decision or a generative decision-making process with a very large group who are distributed all around the world, who sometimes have anonymous members, is really hard.

So decision fatigue is a thing we see all the time in society. Even people don’t want to show up to vote every three or four years. And a lot of these DAOs, they do run on the idea that every token holder, i.e., community member, will be voting all the time. And of course, people don’t want to.

It was really interesting that a lot of the energy for DAOs came from this thinking about governance minimization. And actually, we did the opposite, and we built governance maximization where people need to be really involved in very long discussions and voting all the time and paying to vote and salary.

But now what I’m seeing in different governance models, like the Polkadot governance model, is actually you have a council of anywhere between seven to fifty members who are meant to represent those kind of unengaged or disengaged people within the DAO. And they are kind of thinking always, “What is best for the DAO?” And this is very equivalent to having counselors or politicians in normal life. So it’s like we’re going back to some first principles.

Yeah, I guess the idea that a DAO is very suitable when it’s a large group of people and they’re doing something related to crypto or blockchain. It’s apt entirely. And you still can use consent-based approaches in smaller groups. I think that there’s definitely nothing wrong with having small teams or small squads that exist within DAOs and that use different decision-making types and who are not making all of their decisions on chain. I think that that’s really not a good use of time or energy.

So that’s how we do it at Centrifuge, which—there is a team called Key Factory who are basically 40 people—developers, engineers, marketing, community builders—who are building a protocol. And we are a self-managing organization, so we’re using in our teams consent-based decisions, advice process. We have the whole gamut of roles and responsibilities and continual feedback and circles with kind of facilitative leaders.

And then we have the DAO, which is the community members, people who have invested. And together, the team and the community are making decisions about what’s best for the protocol. And that happens on chain on Substrate, what it’s called.

Lisa: Another thing that I’m really interested to talk about with you is that you know, we originated in the same kind of space of self-managing organizations and new ways of working and that whole kind of movement. And having kind of watched you and some of our other colleagues start to venture into the world of DAOs and web3 and so on, it sort of seems to me as an outsider that there’s a bit of a gap or a chasm between these worlds almost, that they’re not talking to each other so much or sharing learnings. I feel like each one could benefit the other properly in different ways or could learn from pitfalls that the other kind of falls into.

What’s your sense of that? And I don’t know if I’m being overly reductive and splitting into two things, but having been in both kind of spaces, what’s your sense?

Kate: I have a lot in common, but they also—there is a gap there. But I think if we’re going to talk about DAOs, then—and we’ve talked a bit about—the reason they have emerged as an organizing system in a way could be linked to the world of crypto and web3. And they came about because a bit as this very strong reaction to the breakdown that happened after the global financial crisis, and also particularly web2, the old ship and the monopolization by big tech, by the big five.

And at the start of web2, everyone could create their own content, and they could really participate in this new kind of internet, this new web. And there’s a great book by Clay Shirkey called “Here Comes Everybody,” which was just so celebrating the fact that now finally we had this internet where everyone can be part of it and bring their gifts and participate. And that pretty much got destroyed.

And so now we have this new web, web3, which will actually democratize ownership, and that is built in to the technology.

So this brings me back to the question, which is that there’s actually this third world that I want to bring in here that has more overlap with this sector that’s often left out of the thinking when it comes to new ways of working because a) it’s not new, and b) because it prioritizes redistribution rather than just recognition. And this, of course, is cooperatives.

For me, sometimes self-managing organizations merely give recognition. And what I mean by this is like limited decision making and a very nice communicative culture where everyone can bring their whole selves to work. This is great, but I think it misses the key lever of redistribution. And so if you have recognition without redistribution—and I’m quoting the philosopher Nancy Fraser here—you’re not really making things a whole lot better for people. It’s kind of window dressing, it’s a bit superficial. It’s like asking people to act like owners when they don’t own anything. And take all the burden, the responsibility, the late nights, the stress, the burnout that comes with that.

So cooperatives, on the other hand, like are not—that I’ve seen—they have this foundational commitment to redistribution, but they’re also apart from a vote every year on who’s going to become the board or who’s going to be leading. They don’t have so much of an opportunity to give recognition on top of redistribution. So they’re doing the other side of the parcel.

And I really think DAOs have the opportunity to be the middle ground here between the amazing work that cooperatives have done for the last century in fighting for redistribution and the work that self-managing organizations have done in bringing about a really good recognition of people’s inherent capacity to be curious, to solve problems, to make decisions without permission, without being parented by someone who’s in the hierarchy above them.

So yeah, I think there’s a great potential for all three of these things to meld together, to learn. And I think there has been a bit of a gap, but I do see it happening a lot. Nathan Schneider, who’s a big voice in the co-op world, has been doing a lot of work trying to bridge this gap. There’s people—there’s organizations like Centrifuge who are operating—they have a DAO and they’re becoming a self-managing organization. There’s lots of teams out there who are learning, especially from the web3 space actually.

Lisa: I think that’s interesting. I’ve just finished reading Matt Perez’s book “Radical Companies,” and he was talking about co-management instead of self-management and co-ownership. And saying that—I think to use your example of those three spaces—I think self-managing companies generally are working on the idea of co-management, like that we make decisions together, that we have a say in stuff, but not co-ownership often.

And then cooperatives have been working on the co-ownership thing, obviously, for a long time, but don’t always have the co-management piece in place. They don’t have governance, so people don’t really have a say. They might have a kind of symbolic vote, but they still maybe don’t have a say in big things like does the company get sold or things like that.

And then DAOs are kind of in this other space, maybe also looking at co-ownership and starting now to maybe also look at co-management. So it’s sort of interesting to think about these three things and how—I’m really interested in how we can share learnings between the three and sort of, you know—

Kate: Absolutely. And I think that—I mean, there is a very common critique there still that within DAOs, the way that this co-ownership, co-management happens needs improvement because governance tokens, governance power, and how you can shape the direction of the DAO can be bought, not earned.

And so there are a few interesting experiments around how to shift that—people trying to do kind of reputation systems, tokens, or giving more power to people based on how they have performed or how they are in the DAO, or how good at decision-making they are, actually, which is interesting.

But yeah, I do agree that these three worlds have so much in common. How can we get more learning and sharing and copying and stealing happening? It’s a really important question.

Lisa: Yeah. Well, we’re sort of coming to the end of our conversation. What do you really want listeners to know? I guess the audience of this podcast tends to be people who are in the self-managing organization space or interested in new ways of working. I’m guessing there’s probably going to be a few people in the web3 space listening because of the subject, but is there something that we haven’t talked about yet that you really want people to know or hear?

Kate: Yeah, I guess maybe people will turn off once I start talking, because I really want to just end with a bit of a passion of mine, which is this idea of governance theory, which has become a word—even in self-managing organizations and definitely in web3 and DAOs—that I think the usage must have gone up 500% in the last 10-20 years.

I did my Master’s thesis in governance theory, and so I’m just really interested in how people are understanding what governance means. And I would love to just spend a bit of time chatting about that because we just touched on the fact that in DAOs, it’s all about governance. It’s become this—we’ve seen this kind of blowback effect of governance maximization where the intention was to reduce bureaucracy, and now people are learning a lot about that.

But I think governance itself has actually had a really interesting evolution since it was—since it started to be used, which is actually being played out in a very quick time scale within DAOs.

So initially, governance was the process of deciding which rules and regulations will be enacted by a sanctioned authority in a top-down manner—the state, usually the state to the people. And this is really interesting because this actually, I think, resembles early governance ideas in Bitcoin, which is like, “Hey, there’s the sanctioned body. It’s maybe decentralized, but it’s still being sanctioned by the consensus mechanism.”

And now we would refer to this as Bitcoin maximalism where the absolute sovereignty of the state is replaced by the absolute sovereignty of a neutral technical architecture of consensus algorithms and code. This is going to make Bitcoin maximalists mad—I hardly ever Twitter, but I’m actually saying that the governance within Bitcoin is actually quite close to the first evolution of governance as we know in society, which is top-down regulation, state to people.

And then we have a second evolution of governance theory first, and then practice later, in the 1970s, which actually emerged as a critique—yay for critiques, they do do stuff! But it was a critique of steering actions by political authorities that would then shape socioeconomic process and structure or social life. And so the second evolution is markets influencing and directing social political life.

And this also resembles the second stage in crypto governance ideologies, following quite a few forks and especially the Ethereum protocol. So rather than solely a consensus protocol, it became what we call a design space, where all these different experimental fields of crypto economics, token design-making, mechanism design, and more. In contrast to this older, more hierarchical, top-down structure of Bitcoin maximalism governance.

So that was kind of markets-influence governance that happened in the 1970s, and that’s kind of what we saw in the second evolution of crypto governance as well. And I mean, that still exists absolutely, but I do think that there’s a third evolution of governance theory that happened in the normal world, let’s call it. And that’s looking at the horizontal self-organizing aspects of networks, especially networks when they were gaining increasing provenance in the wake of many government and market failures.

So we had this third way, this third approach of governance. And here we think about governance as horizontal, reciprocative modes of coordination where people participate in networks or groups, and they decide about what to do and how to do it.

And so I think that that’s really where we’re at with a lot of DAOs right now. The first evolution—yeah, that’s really relevant to us, a particular type of DAO, I don’t even think you can call Bitcoin a DAO—a type of old token or crypto. And then you have the second, which is the market-based governance will solve everything, and that’s still very dominant, actually. But there is this third way saying, “Hey, there is a way that we can integrate the more horizontal self-organizing aspects of networks,” as well as using the market-based governance.

So yeah, I guess it’s just a super interesting area. I think the use of the word “governance” has become overused to the point where it’s like, do we just mean a decision we’re making about which toothpaste to buy? Or are we actually talking about governance? Yeah, I think this is an area that there could be a lot more thinking done in.

Lisa: That’s super interesting. What’s your like, in kind of concluding our conversation, what’s your hope for this space? What are you excited about? What do you hope will happen?

Kate: Good question. I mean, I’m really hopeful that there’s this sliver of a dream that started this whole thing in some ways, that we can have this world where people actually have the ability to govern in a much more meaningful way than what we’re currently experiencing, that they have the ability to own, to have ownership of the things that they built, and especially technology, that you’re not the product anymore.

And that with this, we unlock a whole new possibility to coordinate and address big societal problems. We grow our coordination muscle in a way that we haven’t been able to do before because now we have the aid of this, in many ways, brilliant technology, which actually—there is no escaping the fact that you need to learn how to coordinate, and you need to engage, and you need to really be there and participate in order to shape where we’re going.

So my hope is that sliver continues to grow because on the other side, we still—we have the majority of web3 and crypto, which is—I don’t know if it’s majority, but it’s a big part—that is very much there for speculation, for seeing the world in a very zero-sum way, betting on the fact that it’s going to get even tougher than it is now. And that to move forward, another currency that lives outside the remit and the power of states and governments and corporations is the only way.

That lineage and that direction, I think, is really scary. And I just hope that all the people—and there are many of them—that are in web3, looking at the potential, continuing to bring in lessons that have been hard-won and hard-learned from movements like the anti-globalization movement in the late 2000s, and lessons from self-managing organizations, lessons from activist movements and indigenous people who have been challenging the status quo and powers that be for many years—I hope that this group grows and that we are able to do something with this idealistic sliver of hope. That’s my big hope.

Lisa: Yeah, it’s awesome. Subscribe. Okay, come into the squad!

Kate: Yeah, okay!