Introducing Reputation into Governance Systems

Transcript

[Music] uh I think that most of the day uh the ones that have been attending to to the panels to the to the conversations and everything uh have seen that many of the things that uh many of the concerns that have been raised are about everyone voting on everything there's no specialization uh and basically that it's a chaos it's it's not an organized chaos it's a chaos it's a it's an entropy within each Dow and each Dow is a different universe so what I want to what I wanted to bring is not a solution but maybe a different approach

on what what what we are seeing right now in the Dallas ecosystem uh and the way we can uh leverage reputation uh reputation as we I I mean into that uh in few slides but reputation as a as as a thing to introduce in different governance systems to create this different to put it in Eugene words like the fracture of the governance systems or to uh split the governance systems in different layers to get more specialization so let's start and I know that there are like thousands at least uh hundreds of talks about identity in uh web fre and reputation and everything

so I'm going to Quick uh recap on on that and then we're going uh into governance per se so what do we understand as reputation right reputation as a whole not in web free not just in real life uh and what we understand uh as reputation is or our perceptions are we are always talking about social experiences right so we are talking about perceptions we're talking about signaling we are talking about prestige we are talking about status and we are talking about opinions opinions that we have or that people have or that institutions have about other people and other institutions or other group of people so reputation and at the end of

the day what we're talking about is trust right so the opinions uh the the signaling and everything that we we what I personally think about someone or institution it's uh what builds trust around that person or or that institution uh and we can easily associate uh like having a good reputation with Benefits right like behaving well or having a good reputation will give you benefits on the other hand having a bad reputation will uh will create different layers different barriers for you to access uh benefits uh so you we could say that there are negative consequences for

having a bad reputation so there are clearly incentives for building a a good reputation so we could also say that reputation is a matter of incentives and we're going to go through different examples and some of them are clearly uh monetary incentives right but there are other incentives in the governances that we should explore so let's again quick recap on what's identity and track record in real life and the basic logic in in real life is that uh we have names I mean my name is Federico and attributes that that are let's say link to my name such as my uh

my my background my education and everything are linked to that name but we could say also that my identity is not the same as my track record it's different from my track record um so some examples of what happens with uh identity and reputation stuff in the real life in real world is that for example we have ID cards Social Security numbers driver licenses credit score diplomas and other certifications our our resume or our LinkedIn and most of them are issued by states by universities by Banks International Organization even ourselves even ourselves uh construct

even ourselves try to build our own reputation by for example our resume so for web 3 it's kind of different what we what we have to say right the underlying uh reasoning the underlying uh logic is that we have an address that could be linked to a domain to an ens for example and uh the actions and attributes are attached to that identity right so that's like the main difference that I will say uh we can find that we could find between the in real life identity and track record and in web 3 so track record is a part of this identity in web 3 uh these attributes that I mentioned

in web 3 identity came mainly from the centralized protocols obviously from the centralized apps and contracts obviously through onchain and offchain data and that's something very important to take into account uh both onchain and offchain data data are the ones that are going to give shape to that reputation obviously depending on the mechanisms and the the system per se I have a very good example of of this and what happens when you're challenging this idea of uh web free identity so something that happened uh a couple of months ago when we were going through a restructuring in SE is that we were hand overing the addresses and ens from some of our delegations to to see go as a whole and

when I wanted to when when I asked one of the the people that participated in in cob to hand over the the address and the keys he literally told me my whole life is contained within that address and at that moment it was like what should I say to him I mean we were restructuring everything all delegations were uh professionalizing and we as an organization should have like the the ownership of them so it might be easy to think okay yeah you were like asking him from from his wallet his his uh nfds everything that built his reputation on chain but at the same time when I asked uh two other

people to hand over their wallets it was a different case so this is specifically happened with one one person but it kind of enlightened me because for some people it's very important to build that reputation with its own wallet and enss so we have this digital identity and we have this address we have uh the ens or or whatever the domain we have and we have these attachments to that digital identity we have attestations we have Dynamic and static nfts such as budges we have so soulbound to tokens that are basically uh unmut nfts and we have credentials and certifications we have the anonymity Factor

too uh so we can remain an anonymous in web3 in in crypto but what's important here is that our actions uh our peer top interactions and our contract interactions are public and that's where we uh start to build our reputation or at least to find different adapations for building our reputation so we have again we talked about identity in real life we talk about identity and track record in uh web 3 and we are talking about uh again we have in real life we have a name and it's easy to track who we are but we have the anonymity Factor uh in web 3 so

how can we will trust with a person that we do not know and the only information we have about them is their address or enss so that's where reputation in web 3 plays an important role uh I I like this definition about like reputation system is uh in web 3 and it's that reputation systems are proxies because for social Rel relationships in web 3 we do not know the people so those close connection that we have in real life are not present in web 3 so we're talking about about again about trust we're talking about how to build trust how to build H H how to have a proxy for intensifying who are we talking about who are we interacting

about or who are we going to hire we're talking about again suitability we're talking about power distribution we're talking about alignment we're talking about incentivizing participation when we have reputation as a factor in web 3 we're not talking only about the identity of someone and its track record but a lot of more variables that that could give shape to different uh social mechanisms so to build a reputation what is clear that we will will need a traceable background and what do we track and how we track it in web free onchain activity as I metion as I mentioned token Holdings I mean if a

wallet holds a certain token you can uh certify that that that's right uh skill attestations and there are a lot of uh tools uh being built around uh optimism and arbitrum for this offchain contributions something that I want to highlight again that it's as important as well as important and as onchain contributions because here you will see later that you have like we we Eugene and a lot of the other people was talking about uh compensating delegates and how to wait the the contributions in the forums or how to waight the contribution in a giab gab giab repo so offchain contributions are also a thing

that should be taken into account and obviously external credentials uh and we will see some examples uh uh when you have like a poop um many of you will know uh what po means it's a protocol that basically basically helps to uh certify uh in uh attendance to events or different places in real in real life we have gitcoin passport and the important thing about G gitcoin passport is that we can uh migrate web2 Integrations web2 credentials into web 3 so we could consider GetGo as an aggregator we have karma for example we have guys from Cara here and it's a tool

for measuring and for scoring deleg participation within the different Dows we have bre ID another tool that it um that it operates into the social layer to get pouches and validations on on your identity we have underr protocol that it's deployed on Solana but it's a like a comprehensive tool and like um that where you can build uh assigned and when you you can you can build like complete uh reputation system and uh waiting the different contribution through an and different ways of participating we have orange protocol that works the same way as Underdog uh but in ethereum and we have rep three that it's kind of like the the same the

same type of tool so now we are going to Deep dive or maybe not deep dive out but we are going to St talk just a little about uh how governance systems in daos work today or at least Identify two or three kinds of governance systems and how reputation affect that so oh what happened sir so the the important thing is that at least how it should be done is that a B BB structure the distribution of power the social layer of a of a Dao should be based on obviously the goals of the of the da and should obviously uh take into account the the the life cycle of the of the da

of the protocol and it's it sounds obvious but it usually doesn't happen that way it it's usually okay we have to launch a governance uh we have to launch a governance token because investors are uh like we are under pressure because we need that we have a a commitment with um with investors so it depends which system you you take uh it will obviously have its advantages and disadvantages uh obviously again linked to the down it and the the OB objectives so as I mentioned this is not like cherry picking but kind of um we could say that we have today three types

or or at least the the biggest house has have these three types of governance the first one is more linked to councils and committees uh technocracy so you have uh bodies of people highly specialized that uh are uh going to manage basically the decision making and the community as we know it probably won't have a say in in the decision making we have state weight uh the most pure um mechanism the most pure system that we all know uh lot of people has been challenging the pure State weight system for a long time even balik uh and we can say it's a plutocratic um

system because the ones that have more stake are obviously the ones that are going to have a a more heavy uh Power in decision making and we have a third type again this is theoretical uh reputation and contribution based systems which are more linked to meritocratic uh contributions so something important to know about these three systems is that um we should start thinking and this is also something that a lot of the the speakers have have mentioned is that the calization and representativeness are not like uh good or bad I mean being more centralized or being less

centralized or being more decentralized doesn't mean that you're good on on on the or that you're performing good that you're going to achieve your goals so we should consider this uh obviously as spectrums and as as matrices right it's not like okay you are decentralized so that's a success or you're uh representing all the interests of the community so that's going to drive drive success that doesn't make sense so for stay and sorry for the bullet points it kind of it's long to read but basically the pros uh theoretically speaking speaking uh for stake weight are the you have a heavy stake if you are uh heavy invested heavily invested in a protocol you will

have incentives for participating because obviously your state will increase um the cons for this is obviously that many people that wants to join the the governance um won't have incentives because their stake is going to be low for having a an important say in the decision making process uh there there could be disproportionate amount of influence of these stakeholders of these early investors uh and obviously uh this comes also with unequal representation for reputation and contribution weight uh we have some pros too that is obviously linked to

okay uh someone that might not have uh a great investment on a protocol but has been doing a lot of contributions again in the social layer in the forums H in the GitHub repo in social media um could have a more a important role within the decision making uh not attached to the to the state that they have so it's kind of L that when you participate more when you you contribute more you will have uh a say in the decision making so the pros here are only Al also the Civil mitigation because token weight uh again if you remain full unon you could split your

your wallet uh your token Holdings in lot of wallets and well a CB attack basically and increas is also predictability because you're going to know uh exactly who are the people that are contributing and participating some cons are obviously uh the subjectiveness here right determining who is a contributor or what's a good contribution it implies a lot of uh sub subjective assessments um and obviously H when you're talking about Investors uh it happens that an investor maybe doesn't have the time or doesn't want to get involved in the in

doesn't want to get into the trenches of the governance and so we are going to basically be uh discouraging investor for coming because the time that they will have to invest isn't going to pay them as it pays the the token weight system so for hybrid systems again this is theoretical uh it hybrid system allows uh a balance between stake and contributions and could help also uh to adapt the system in a better way uh because it's not going to be stagnant meaning that the people that has the biggest stake uh willn't remain that way I mean will

remain that way but at the same time you will have other participants other contributors that will be part of the governance design and the governance process and there are some cons obviously linked to the complex uh design of this kind of uh hybrid systems it's not easy moreover if you have already a da a da governance system to redesign to process to get all the people on board for that uh and obviously all the factors that you should consider for building a hybrid system are like like thousands of things sou thousands of investors uh so it's not easy at all and obviously uh linked to that we have that and well every

system kind of leaves uh people outside and I mean that's not bad at all it's something that that happens with st weight some people it's left behind and with contribution weight other people's left be left behind but hybrid systems doesn't H don't come to solve that um so defining uh the contributions that are going to be more weighted and everything isn't going to uh bring you like the adequate system per se uh it's kind of complicated and messy to find a good in between so now we are going to talk

specifically specifically about reputation in governance let's think about how this hybrid systems could work out sorry again for the list of bullet points but what reputation could bring what reputation systems could bring into governance designs right and we're going to go further later on the different stages of those and how could them be uh influenced or Changed by these reputation systems but uh we could say that introducing reputation into governance could help to uh create a functional segmentation and this thing that Eugene and a lot of the other speakers were mentioning about not everyone deciding on everything let's

find the right Specialists let's find the right people for Designing on specific things let's find the right people for voting on matters that they KN do know about um so that also helps like segregating uh these different groups segmenta these different groups helps to aggregate interests so if you have uh let's say a group of people that are defi experts and you put them together okay their interests are probably going to go the same way at least if you're thinking in in terms of the same protocol um obviously what Eugene alsio mentioned and a lot of the other speakers mentioned if you really have the right people deciding on the right

uh mods you will have uh more the most equiped people making the informed choices when I talk about adaptability and professional professionalization I'm also talking about um that you will have mechanisms or reputation system allows mechanisms for picking the right people and for uh like putting a higher barrier uh to entry for and gatekeeping certain uh governance layers well they uh then I talk about uh governance layers and how can you cluster uh these different um um different scopes for each Dow

furnace because we are going to be reflective you're going to be representative on the right uh contributions the right interests and the other thing that reputation systems bring to the table is that they give you a wide margin for introducing the temporality and Decay mechanisms and this that's also something very important in terms of stagnancy in different Dows or status quo because um when you introduce let's say for example an nft that at the states uh your participation or uh a skill set that you have but that that's uh remains there uh it remains attached to your wallet and

you only ATT toate one time that you know about a certain thing and that's all and you don't do anything about it well if you manage to introduce some mechanisms some Decay mechanisms to that uh you will be incentiv vating these people these people that got those stations or that got those nfts or whatever you want to call them to keep participating to keep increasing their reputation or to keep maintaining the reputation and that's for for me one it's one of the most important things that to take into account with with reputation because a token holder could have a stake have a let's say 100 one one million uh tokens of a specific

protocol 1 million BP if it's one one vote one token and he could stay that way he could delegate it or not that BB could be like an active that BB could be delegated but he has no incentives on doing anything right the only incentive that he has is like to sell when the token goes up and that's all some examples of a reputation I won't say systems but some experiments that are going uh that are moving forward uh right now are for example the optimism citiz CI citizen house and the optimism Collective feedback commission I don't know if any

of you are familiarized with this but the citizen house uh from optimism was basically a way that optimism introduced to beo uh token house decisions and those uh ones that hold uh a batch in this case an NFD that's a batch uh were ones that were uh early contributors that Reed uh retr pgf uh RF funding at the beginnings of optimism or that were uh participating in other ways throughout the stations Collective feedback commission is a new body that optimism introduced a couple of seasons ago uh and also works with other stations so the experiment

that they are conducting right now is identifying people that actually contributed somehow uh in different vertigal or different areas of the governance and what they do is assign to those people roles within this commission uh that works together with the foundation to set the goals the expectations and the design of the governance for each season and those two again are based on onchain and offchain attestations the other example that we have uh is starting uh wol pack League it's not part of the governance yet uh that's open actually but what they do is

to uh they have like the this like wolf cab uh uh big wol whatever they have like different levels of of of this WF pack league and what they do is to assign you uh a level of contribution and these contributions are not only um through participating in the governance but also uh participating in uh or or like being pres or having presence in social media uh contributing to the GitHub repo uh proposing stuff in the forums giving feedback so they have like a list of 10 things that they could

adate and they assign you h a specific level within the this uh this structure and they compensate you based on that and they keep you engaged for you to keep contributing to keep uh increasing your level to get more incentives we have delegate programs we also talk about the that like a lot uh here it's also reputation mechanism and here it's also linked 100% to compensations at least uh in most of the Dallas so we have scoring systems like Karma um and what they do is basically track onchain participation and offchain

participation and aign new scoring and in the case of arbit that well from sgo we manag the delegating sting program we compensate delegates based on their contributions based on their scoring with uh tools like this and the last one that I also participated uh was the the senderland badges the senderland Dow Badges and we never implemented uh anything related to uh governance layers we were like about to experiment with that but what we were doing was striking onchain and offchain participation and those attestations were badges so for example we had that thecentral and legislator badge that was uh assigned to

uh people that proposed something in the governance and a proposal that succeeded so our idea was that that group of people and other ER badge holders to have something similar to the citizen house you optimism it never uh went that way but but that was the the main idea so to talk about your uh reputation system in governance uh this is a nice uh chart that I found in a paper that I can show you with you later uh but you have like four different layers um at the higher uh level you have obviously the reputation what we talked about what

we Define as reputation and we have the governance system as a whole right so you have to match uh the reputation of a single wallet of a group or whatever uh with the governance system the governance system and reputation are not just like an attestation and how to participate there the ideal thing obviously is not only to have those attestations and to assign a batch or an NFD or whatever it's obviously what do you want to achieve with that reputation system uh it sounds obvious but it's not that obvious but there because there are a lot of uh places where you basically assign nfts with different uh

attestations but they are basically useless you don't do anything so it's important to Define uh the objectives or of assigning those nfts or those soulbound tokens or that reputation to certain individuals the other layer is about mechanisms how how you assign those budget how do you assign those attestations and for that what you need are the tools so going back to uh 10 slides ago we were talking about rep three orange protocol um well all all the tools that are already existing and and there's no standard and that's maybe a problem may be a good

thing because they are competing uh each one in in on its own uh universe but it's very important once you have all the things to find the right tool for this for assigning the the budget or the nfds or for assigning that reputation component uh and to match it with the governance system so now we are going to talk about the implementation because it sounds like beautiful okay you will recognize people you will H give give them a reputation and they will have access to different layers and you will gatekeep the governance so the ones that know better about certain stuff will be the

ones that will vote and discuss about that stuff but where is this possible because as I mentioned at the beginning of this talk there are like hundreds I I don't know if thousands but there are hundreds of uh papers of talks about reputation uh about uh attestations about web three identity and everything and actually there are also uh there's a lot of material about governance and reputation but there's no Implement implementation you have like these three or four examples maybe there are others but there's no experimentation so what are like the problems or the things why we're not experimenting with with this and I want also to bring I don't know if you any of

you was uh were in the talk that the guy from Aragon uh gave and he talked about why are we not innovating in in governance and those are some of the reasons right because for most of the dowas that have already their governance and their token weight system implementing a reputation system it means that they have to change the game that they have to change the distribution of voting power or of power dynamics within uh the same process that they want to change it's changing the game within the game the criteria for defining the reputation also brings another problem because if you have a a Dao and you want to build a

reputation system the ones that are going to vote that the ones that are going to decide on that are the same ones that have a substantial BP so how we are going to pitch or convince those huge stakeholders to change the system because they're going to definitely lose power another concern is gam ability because if you have a like a weak system a reputation system is easy to get those budgets get those attestations and to gain a lot of power without doing like huge contributions uh again bringing the the important stakeholders they they see it as a menace right they they see it as a problem like giving more power to people that are not heavily invested in a protocol it can become a

problem we talked about the tool and the mechanisms and the important thing here is that if you want a specific governance to evolve or to develop a reputation system you will most likely to uh develop a new system so you have all the tools that we mentioned you can uh work on some Integrations but at the end of the day you will have to put a lot of effort in development high in cast and burnout so it's not only about the the monetary costs but also about the discussions within the Dow right imagine a discussion I know if I know if if you guys are involved in arbit about a

reputation system it would probably take like a year or two to find like a h something to say about it and it it will probably lead to anywhere and uh a SE can bring incentives alignment because again contribut contributors that are heavily involved will gain more decision-making power at the same time it could bring misalignment because of the interest of the big stakeholders so as we saw there are like many implications and risks that obviously taken from a rational Choice perspective are basically very complicated to implement uh so basically

no one is willing to experiment with this because it's rationally not to do it the costs are high H everywhere not only in again in economically also in terms of burnout in terms of discussion in terms of alignment in terms of Tooling in terms of of development so now it brings us to like the most important question what where or how could this be feasible right and the answer is that it could basically be feasible or potenti potentially feasible in many Dow at different stages we could categorize them in for example that was close to lunch uh when they're still at

their governance design stages basically because it's easy uh to like to craft the social contract between the stakeholders and the early community members there's obviously room for Innovation uh and start from scratch like a whole governance system is obviously uh it has obviously reduced friction Dow at early stages this is also uh a good place to experiment and to try to implement or at least to discuss uh governance systems if you already pass the governance design stages uh what you will have here is the possibility of identifying the early contributors the

early investors and everything so you will have a better picture of their interest where they want to go and also where you you want want to go so we will get more representation for those stakeholders and contribut contributors and it will bring uh an a reputation system at a early stage in Ada could help to incentivize those early contributors could help to attract newcomers because if you build like the right reputation system and the right incentive system you will people will come to your protocol and also you will avoid uh Proto governance capability and when I talk about prot governance cability is going to this stage when Da is close to

lunch and uh there's a how do you say this word this a there's um a symmetry uh of information between the ones that were crafting this design and the ones are coming later so the ones that are crafting this design are going to be able to H gain the the reputation system proberly at early stages another good example of how to introduce governance uh reputation governance are those with gradual denization and I want to put the example of optimism here because many of you will know that the scope of the optimism Dow is like a let's say a another little uh one

another short one but it's mainly focused on uh public goods and giving funds to projects and everything that's related to the SE sequencer and um changes to the upgrades to the smart contracts and everything basically doesn't go through the Dow so what gives you this possibility of still being centralized let's say and again let's talk about centralization and decentralization as a as a as a spectrum not not as something bad or good um gives you the possibility of gradually increasing the scope gradually uh changing the scope and creating these different layers or

different um bodies of people that will be uh dedicated to specific um areas of the decision making what gives you this is such ability and membership you will have again if you have h a gradual decentralization if you're already an ongoing Dow you will have the time to identify the stakeholders to identify the contributors to start rewarding them and that will give you the chance to the the chance to start um building a modular governance uh with a certain degree of gatekeeping for this decision making the other way and this is the

yeah there's one more is with ongoing rewards uh and incentive programs so again if you're a delegate and you're receiving rewards and you are going through a scoring system and you're probably going to uh get a compensation for that uh why do not start formalizing those participations not only with a compensation not only with a scoring but also with again what I mentioned a couple of minutes ago nfts soulbound uh tokens and other kind of attestations that will give you and will give the the participants a certain degree of reputation the good thing about this is that you can uh assign those

attestations assign those nfts assign that reputation and it's not the best way but you can still have time for figuring out uh what you want to achieve with that uh reputation but if you already have a rewards and incentive program you kind of know what are the valuable contributions that you're compensating so again why not giving the extra mile and assigning them different mechanisms for for recognizing them as reputable and the last but not least uh is how can we do this how we introduce a reputation system uh in already established Dow so I brot the optimism

and the arbitrum example but there are like lot of DS that are kind kind of stagnant with their governances because of the pure State weighted approach um so basically what you have there is a oop Poli or uh groups of people or protocols or uh stakeholders that decide on everything on the da that have the the most voting power and there's kind of stat quo where everyone's let's say happy with that and the protocol doesn't evolve the governance doesn't evolve either so how can we uh tackle that okay if you have a governance that is

stagnant and the scope of the Dow is already wide what you can do is start uh this fragmentation that Eugene has mentioned um like having these different layers these different groups and these different uh structures with different Scopes um and you can do that for example introducing sub Dows so if you have let's say a dow with a white scope that governs the protocol governs the the grants and everything related to operations I never everyone's voting on everything why should that uh imped you from start fracturing the governance and make those reputable people that are acknowledged and that have the right

attestations to start deciding on specific topics and the good thing about subd is that they can be like um they can be resorbed right they can be you can have a roll back and if that's specific part of the scope that was part of the main Dow uh and the mechanisms that you assigned to that subow aren't working it can be resorted so there there's like a low risk on doing that and maybe not a low risk but if you think in terms of a already established Dow is not that a huge effort you can just take one small part of the Dow and start experimenting with different mechanisms and if it doesn't work it can

go back to the to the main Dow so some final talks um well basically the earlier you want to adopt or to set up a reputation system with it it's obviously the best because you have uh there's no information asymmetry uh you are still like a design phasis so you know where you want to go and what contributions you think should be valuable for the protocol the later obviously the most controlled should be the experiments that's why I mentioned the subd maybe it can take like other uh forms right no not necessarily subow um the other important thing that

I mentioned is that attestations are already there um I mean most of the people that contributes to protocols that participates in forums uh I'm talking again about onchain and offchain participation they're already there what you need to do is to list them to assign a weight to them and obviously to find the mechanism and the tools for for doing it but the stations the actions are already there and what gives you that is the possibility of recognizing what is valuable for you and to start incentivizing those things that haven't been made or that no one is doing for creating reputation this is a suggestion that I have maybe is that we have the token

airdrops in Dow at early stages or Dow at their design phases why not to accompan that with this so when you use a criteria for airdropping you are basically recognizing a certain reputation to that people that people uh obviously participated somehow at early stages contributed to the getthat REO uh design the prot governance whatever you already have the criteria why not to accoma that token airdrop with an nft because probably the token air drop will happen H it will happen what always happen right uh people will dump it I mean they recite the airdrop and that's

not going to be used in governance the the the amount of I don't have like the right the the the specific numbers but the the percentage of the tokens that are used in governance after an airdrop are like really low and most of the airdrop reers uh dump it they sell it when they see the the the prices going going up so the other important thing that I also mentioned a couple of times is that onchain and offchain actions contributions are both important so for some cases and obviously will depend on the scope of the Dow and the needs of the Dow but some for that for some Dow sof chain participation is more

important than unchain participation for other uh other those obviously onchain participation will be more important so trying to find the balance between both of them and the four last uh thoughts that I have uh obviously it it should like fall that way right you should set objectives of the reputation system you should find the mechanisms for assigning that attestations badges whatever and with that you need the tools the right tools Decay mechanisms something that I Al also also mentioned are for me at least are healthy and necessary for uh Affair governance right what I mentioned

right um it's not about um having just a reputation system and assigning people uh different levels uh but also about making it Dynamic right um when you have a pure token weight uh system it will probably get stagnant because token holders will remain that way and the actions that they could take about it about the token is sell it or buy it or delegate it in in some cases if you have uh Decay mechanisms with uh these Dynamic uh nfts sbone tokens or whatever what you will achieve are incentives for keeping that reputation going for keeping that reputation up for

increasing that reputation and that will uh fight the stagnancy that we find in many protocols and the status quo that we find in many protocols when you want to plan a governance when you want to introduce a reputation system again you should uh think about layers you should think about fracturing it on um and yeah last thing that I also mention this is the third time is that the centralization and representativeness uh should be thoughted as spectrums so think decentralization think representation as

a spect rooms as different matrices um because the life cycle of a protocol the life cycle of a da um doesn't depend on how much centralized is in a spec at a specific point at the contrary my there might be uh moments of High centralization when the protocol is driving lot of Revenue lot of participation and if it's fully decentralized could be the opposite so think it about Spectrum rooms at the moment of the life cycle of the D so I think that's all or is not okay that's all then uh yeah I don't know if you have any

questions if not we can like wrap it up yes sorry sorry no no sorry making you run uh thanks for the fascinating talk uh two questions one was uh to your couple of slides ago when you talk about Proto governance I don't know what you were meaning by that and not the second yeah the Proto governance game ability question and the second question is what's your view on Bad Reputation like so far you've been talking about like you know airdropping to incentivize good reputation and whatnot but what about airdropping for to Mark you know this wallet you know these guys are not trustworthy and whatnot what do you

think about like dis incentives in that sense Okay so good question uh really good question the first one prot governance is referred to uh for example what's happening with Mor for right now um they are starting to design their governance processes the only ones that are involved are the ones that willingly are involved and designing and participating in the governance and the token is immutable I mean the token wasn't launch yet so uh investors and people that want to buy the token they cannot do it so lot of Doos take this approach about uh like approving the first proposals or governance designs without without opening to to like the

whole world without being fully decentralized um so that's like prot governance it's like the the predesign before giving everyone the possibility of accessing the token and voting and participating in the in the Dow exactly exactly and probably H is uh like um compound by investors by people that has been participating in the Forum but they don't have voting power or anything it's just a small Inner Circle that are like giving shape to the first uh governance design so what can happen there is that those people will have a lot of information that newcomers wouldn't have and that's

what give gives them the possibility of gaming uh a governance system and the other one was like about bad reputation well that's something that uh when I used to work for the centraland we discussed a lot and it was a very polemic thing because we wanted to do that we wanted to airdrop for let's say bad granes or people that didn't deliver a way to recognize them a way to to say hey you didn't deliver you shouldn't be able to uh access a new round of Grants um it kind of works like a van uh in some cases for example in arbitrum um but yeah if you ask me if

I'm um in favor of that yeah it depends it depends for grants for example if you did not perform if you did not deliver I think that there should be like a possibility of identifying those Bad actors or people that did not perform in other cases I prefer like these Decay mechanisms right for having that bad reputation right if you achieved a certain goal and you've been uh you've been recognized for that okay uh well you have to keep the reputation it's not like okay you're not going to do anything else uh that's going to Decay and you have to keep it up um so for some specific cases I believe it will be worth it to air drop bad nfts or

whatever for other cases I prefer like the dek mechanisms exactly exactly so that's again why Decay mechanism and the temporarily thing are very important in reputation systems uh it's not about like what now you have like the big token holders the the big investors managing the the Dows or deciding what happens you will be just creating another group of people that will remain there and that's not idea um the idea is to make it more Dynamic the idea is to break that status quo uh and again Decay is the only mechanism at least that comes to my mind

right now for avoiding that let's say uh not in a bad sense but a political class right like that it's the stablishment of the Dow let's put it in that in that terms that's the only way to avoid establishment and the establishment in the Dow exists we all know about that uh there's uh there are like parties that collude together there are parties that use quid pro across different Dows and everything but again the mechanism for that could be Decay other question perfect yeah any other one more question anyone comments

well that's a good question uh what I think is that there's no like clear difference on what what should we be decided by a counil or by a subow uh the thing is that a subow with its own mechanisms uh could help with um some specific uh I mean you can give um people that's not elected through a council you you like REM remove the political um the polit the political thing the political uh spice there uh the sabda will work as a way of identifying people that didn't participate in that political process

for deciding on specific matters so I think the main difference is that not maybe about uh 100% about efficiency but because the could uh elect the right people and it could be 100% efficient it will still be a political process for the sabda if you conduct the right uh research the and if you identify the right attestations and the right skill set for being part of that sabda um yeah I mean should be more easy to avoid like let's say political processes I I I think the maybe the value or the main difference is there uh about uh the guys that or the persons that are going to be elected uh not to be elected

because of uh someone is um supporting them with huge stake or voting power it's more about the contribution I think that's the main difference so some examples all these that I mentioned as subow could be committees or councils as you mentioned funds allocation treasury management Community curators uh protocol incentives defi infrastructure those could all be committees those could all be uh councils but why not again if you want to fracture the governance if you want to create different clusters for people that specialize in different matters why not use uh what not not not to avoid like the political uh process and to start recognizing the ones that

actually know or that actually contributed to to this um just an example and I'm going to round this and wrap up this and I I'm a huge fan of optimism governance system um but many times what happens in the in optimism governance is that an election is a popularity contest and that's all maybe there's no um specific knowledge there's no uh specific skill set the people just just voted because they are popular in optimism sometimes for specific cases and that's what I propos to tackle with this kind of saow structure