From Temporary Gatherings to Durable Institutions - Felix Fritsch

Transcript

All right. >> Yeah. Uh, thanks for staying here even though Vitalik is speaking. I assume you all heard him plenty. Uh, or you missed that. In that case, feel free to run. Um, yeah. Also, excuse for the slides. Uh, my bot is uh annoying. I don't know why it thinks that temporary gatherings are so much more important than durable institutions. I think it's the other way around. Uh so I want to uh open this uh talk with a simple observation that is uh crypto started with strong digital intentions and imagination. Basically to build institutions that are global permissionless uh composable and do that through digital means right through

protocols, tokens and dows. And yet over the last few years the the most interesting energy for me at least uh has happened in mesp space. So I'm talking about I'm talking about the conference uh circuit and what came of it. Uh temporary gatherings of longer and longer form pop-up cities uh network states permanent hubs cooperative ownership uh new experiments with land housing governance and shared infrastructure. And the question I'm asking is why is a movement so focused on digital coordination rediscovering place and space? And my argument here is

that this is not just a lifestyle trend. It's not just that we're all that many of us are in their late 30s and starting to think about kids and such. Uh it's actually uh it actually reflects a deep institutional problem. Um so I come to this topic from two sides. On one hand I am a researcher. I uh I did do a doctoral research in political science on cryptocom. So that are communities that try to use blockchain infrastructure to uh collectively uh steward resources. And from 2018 to 24 I studied several cryptocoms projects and their communities in depth. I looked at uh the mechanisms they build at the narratives

they develop around these mechanisms and at uh their culture uh their social ties. And second and that's what I'm doing more these days. I come uh to this talk as a builder. Uh over the last five years I have been oops I have been building uh the commons hub in the Austrian Alps which you see on the right side right uh which is a place-based experiment in communal living working and institution building. on the left side you see me and my brother when I just got my uh my Lauria uh and my brother is my my co-founder right um so this talk sits between research and practice and it asks what

crypto communities have learned about decentralized institutions and why so many of us are now experimenting with places gatherings villages and so on now crypto has always had an instit institutional imagination. It was never just about payments or speculation. And at least in its more ambitious versions, crypto always asked, how can we coordinate without centralized intermediaries? How can we govern shared resources? How can we create credible commitments among strangers?

But the field has mainly tried to answer these questions through mechanism design, better protocols, better incentive structures, governance modules or voting systems. And I think that the last decade has shown both the promise and the limit of that approach. Mechanisms certainly matter, but mechanisms alone do not create durable institutions. And to explain why, I want to briefly clarify what I mean by institutions and by affordances. By institutions, I do not mean only formal organizations. And by no means do I mean uh the institutions whose institutional money is going to soon come and save all our bags. I mean rather by institutions I mean routine

ways of doing things that structure collective life. Institutions reduce uncertainty. They lower transaction costs and they tell us what to expect from one another. So institutions are not made of rules alone. They shape behavior through several forces at once and you see them on the quadrant. Uh we have formal law, we have architecture, we have social norms and markets and these four impact on our behaviors and uh make us do things in certain ways.

Now over the last decade, crypto has tended to focus mostly on what it can directly build and affect. So protocols, smart contracts, incentive mechanisms. In other words, architecture and some degree of market building. But again, mechanism design alone is not enough to build durable institutions. And here the concept of affordances helps uh broaden the horizon a bit. An affordance is an actionable property of a technology as perceived by an actor. That means it's not destiny. It's not abstract technological essence.

uh as techn uh technical features lend themselves to certain uses but it depends on who uses them to what ends and in what contexts and I find a book is a great example of of an affordance right if you are literate a book affords reading if you're illiterate you can still burn it or throw it at people uh or you can show off with it uh again sorry for my AI slides uh so yeah when I speak of blockchain's institution initutional affordances. I do not mean that blockchain automatically creates better institutions. I mean that some of its technical features lend themselves to certain institutional uses.

And now some examples from my research or well uh examples of such affordances I found in my research and I think they were on cryptos uh but I think they apply to to blockchain at large. So first trustless accountability. I guess you all have an imagination what that could be. uh blockchains can make actions permanently visible, traceable, auditable. But the challenge that I'm sure all of you also experienced already in open-ended communities, value is heterogeneous. The evaluation of an action depends on social judgment. So both the recording of an action is already hard because you have to codify it and then evaluation of how much is your tweet worth as compared to my six months of coding.

It's a value judgment. uh it's very hard to automate. Um so we end up again with the need for social judgment. That means trust, shared context and the living sense of a group's aims. Second, we have I found contractual organizability. Again, we know that dream at least from Dows. Uh smart contracts allow people to organize through automatically executing rule sets. The challenge here is that governance design still has to be guided by the aims and values of a specific community. We know what we want. Uh and this needs to be encodable, thus first known, stable and formalizable, easier for some uh settings or

aspirations than for others. And third, the grand dream of permissionless mechanization. Crypto allows us to pro uh prototype institutional patterns or mechanisms without waiting for permission. And that's great and that's what many have been doing for the last uh decade. It lowers implementation costs and accelerates uh experimentation. We have a sandbox in which we can play. But it does not solve the deeper question and that is what institutional design is acceptable in a given situation. What will actually work will be accepted by people and by markets. So in short, trustless accountability runs into the problem of social judgment. Contractual organizability runs into political values or the need for uh encoded uh uh and uh known political values.

Permission mechanization runs into market pressure or acceptance more generally. Right? And all three of them point to the social dimension of institutions. Crypto has often underestimated the social dimension of institutions for two reasons. On the one hand, ideological reasons. Um, part of crypto inherited a quite reductionist libertarian social theory in which centralized institutions are imagined mostly as constraints. And freedom basically essentially means replacing these centralized institutions with contracts, markets and code. We do not look at the social. And the other is historical. Um, early crypto developed

in a relatively lawless or extra legal space and thus uh rejected law as uh or the idea of law as a as a positive regulatory force. Not saying that law has to come back, right? Uh but that's that's two reasons for me that the social dimension is underrepresented in crypto. Uh but the problem is that in the absence of law and let's say we we settled for we do not want the state to interfere there. uh but in the absence of law, social norms come under pressure from markets. They become harder to establish and to maintain especially under conditions of systemic anonymity, right? Uh and that's essentially uh uh well the North Korean

uh hacker problem uh that we have now. Um and well, in terms of social norms, behavior will always uh risk regression to the code basically. Whatever is not technically prevented becomes permitted and uh uh in in social norms terms accepted code is law code permitted doing that. So it's uh by default okay and that means whatever can be extracted will be extracted again uh the code is law versus North Korean hackers drama in a nutshell. Um now in my research I saw communities respond uh in two ways to uh

to this problem of of protecting social norms. On the one hand uh technical adaptation uh reshaping technical architecture to make it more compatible with uh with your needs and in their case it was common governance. Uh there are many needs. Uh for example uh examples I found is replacing pure anonymity with off-chain identity, reducing bureaucratic influence through quadratic voting or requiring proof of presence, proof of sweat for governance power and the the broader blockchain for good movement has produced many interesting approaches in this realm over the last years. I do think that technical adaptation also has its limits though

both in terms of technical feasibility and in terms of market acceptance of those modifications. And the second uh second response uh that I found and I want to uh focus on more here is social scaffolding. So what I call social scaffolding is the deliberate cultivation of norms of relationships identities rituals expectations and informal accountability that make a community governable. And here the the token engineering commons uh a project that had has been around huh I'd say like since 2020 21 maybe until 24 25 uh that was one of my case studies is uh is a good example uh

for two years before launching a token they had a so-called cultural build that created a a dense social world around the project so shared language collective identity repeated interaction rituals and a sense that the commons was something to steward and not simply to extract from. None of that technically prevented individual profit maximization, but it made pure extraction much less socially legitimate. And that distinction matters. So in contrast to simple rule sets, institutions also work by making certain actions unthinkable, shameful, illegitimate or simply out of character, out of role. Uh

so in conclusion, my research highlights the need for thicker social worlds around crypto. It highlights the need for communities with memory towards known members towards repeated interaction towards spaces where people do not only coordinate but become accountable to each other over time. And this brings us to pop-up cities. uh pop-up cities, pop-up villages, residencies, this conference circle we're all part of, and other forms of gatherings that have been uh popping up over the last years. And I think that these formats matter precisely because they respond to this missing social layer of the digital

realm. Uh they create shared context. They make people known to each other. Uh they allow norms, rituals, expectations, and informal accountability to emerge much faster than online. And in that sense, pop-up cities themselves are a form of social scaffolding. And at their best, they are temporary institutional laboratories. They allow communities to test what their values mean in practice. Not only in governance forums or smart contracts, but in shared space, shared meals, shared work, and sometimes shared conflict.

But they also reveal the limits of uh of temporality. So temporary gatherings can create intensity, trust and inspiration. But precisely because they're temporary, they struggle with continuity uh with local integration and the gap between vision and practice. So continuity is obviously hard because temporary worlds do not automatically produce memory, maintenance or accountability over time. Local integration is hard because the surrounding place can easily just become a backdrop for a couple weeks. a beautiful scenery, local flavor, few invited stakeholders, but not uh a genuinely participating social world because why should they care about your four-week event, right? That leaves,

they stay. Uh and then the gap between vision and practice is is partially inherent to the format. Um pop-up cities operate often with institution scale ambitions to develop new civic forms, new economies, new ways of living together. UN recognition uh but they usually do not have the time depth needed for such cultures and institutions to actually develop. It always stays an ambition more or less vague. A pop-up can ask can we create a different social world for a few weeks and yes sometimes we can uh especially if everyone shows their best side for a while and we suppress conflict. Uh but a

permanent space has to ask harder questions. Can any of this survive repetition? How does culture evolve over time? How does culture emancipate itself from charismatic individuals from so how do we overcome the founders problem? Uh how does culture become an invisible layer guiding interaction into smoother more expectable paths? And that is a quest for institutions. Permanence, however, does not solve these problems automatically. In fact, it often makes them sharper if they're not addressed.

Permanence introduces property maintenance, neighbors, local law, recurring conflict, uh, governance fatigue, and and long-term responsibility. Uh, and I've been facing all of that over the last five years. I just, if you see that, I hit my head two days ago and working on the electric grid of the house. So, it is a different kind of beast. Um yeah but precisely for that reason it is also institutionally interesting. A permanent hub cannot only uh uh live on the vision cannot uh remain a vision only. It has to become operational. It has to meet the local social world and keep on meeting the and dealing with the local social world as it does not end

after four weeks. It has to develop rhythms, roles, boundaries. It has to deal with with conflict rather than suppressing it. And it has to let culture emerge. Now this uh and excuse my shill uh is where my own work comes in. Over the last five years as I mentioned I have been uh co- building the commons hub in the Austrian Alps which is a place-based experiment in communal living working and institution building and Valley of the Commons is our next step in this direction. Uh it will launch as a four-week pop-up village in late August uh 26. So formally or initially it is still a temporary uh event but the

intention is to use it as a springboard to our uh permanent plans of seeding the valley of starting to build co-workings uh sorry co-l livingiving uh co-l livingiving so shared mansions uh shared villas uh shared housing uh either among families I'm currently looking with uh two three other families to to purchase a house and uh and live there uh permanently, but also more for digital nomads that want to have a semi-permanent base, stuff like that. But then also beyond that, not just living, but also um co-working, I said, but also co-producing. So we're looking into uh cosmolo ways of production into fab labs uh into local manufacturing and

doing that as much as possible as a commons. So as commonly owned property, not as a co-working uh um company renting out spaces necessarily, right? Uh and then we also face lots of other questions, but uh I'm happy to go into that uh in more detail if you come by our booth that is over there in the community area. We also have a nice 3D printed model of the valley and stuff. Um, but yeah, I do want to finish this presentation where I derail a bit. Um, the question for me is is not only how to host another good gathering of which we've done many in the last years. Uh, the question is how temporary communities can become entry points into more durable infrastructures, shared

spaces, shared ownership, local production, cooperative housing, and commons governance. And for me in a way this is also a continuation of my research. I did not want to stay in academia after finishing my PhD. It's too dry and boring. I want to build stuff. But still I want to continue in this inquiry, right? Um so my PhD looked at how cryptos try to build decentralized institutions and how they use social scaffolding to strengthen social norms against market pressures. Uh common hub and value of the commons now explore the same question in practice. How can communal life become uh beyond sorry how can communal life beyond extractive systems grow into durable institutions?

By the way, that warning sign should be a QR code. Told you my bot betrayed me. Um you can come by. We also put out some flyers here. So, uh or just come and talk to us. We're at the community booth. Uh these guys are there as well. Um but I'm going to make quickly my closing claim which is simple. Crypto has developed powerful tools for coordination. Yes, but coordination is not the same as institution building. Durable institutions need mechanisms but they also need memory. They need social norms. They need legitimacy and they need communities that can hold each other accountable over time.

Temporary gatherings show that this desire exists. The current move towards hubs and villages asks whether it can endure. >> Thank you. >> Thank you Fix for the great presentation. Do we have any questions from the audience? If not, there is a question. Perfect. Thank you for the presentation. So I've been around um um some of these pop-ups for the last like three years now and uh you're right in terms of the like

temporal aspect is good for experimentation time bound helps people to get out of their shell to connect to innovate to iterate very fast right so they serve a purpose but I I am seeing this trend in terms of moving towards more permanent and then having anchors and roots in addition to traveling to share information and to share knowledge. So my question is that are we aren't we overengineering this? Aren't we trying to force community where community should be naturally emerging in terms of the shared values or interest? Are we over aren't we overdoing things? Because sometimes we just need to plan the scaffolding and then just allow people

to come come and take over. >> To some degree I I certainly agree with you. Um we can risk overengineering uh the social question or or prefiguring the the institutions uh that or the social side of institutions, right? Or even even uh not just the social side, the whole thing. Yes. uh build a community and its its culture, its rules and its institutions will come. But I do think that it's also and especially as we are using technologies to to facilitate some of these or for the architectural side of some of these institutions uh and that needs active development and takes

time and so on. uh uh we need to think about these things the social side yes we need to give it some some wiggle room to to figure itself out and constitute itself um to some degree uh I do think that uh creates the community or creates the space where people live together actively as an intentional community and they will develop their institutions yes but as we are uh in a in a technologically driven uh uh sphere here I'd say uh this this question of choosing the right mechanisms choosing the right technological substrate is a relevant one and uh like some think like

if we don't look at that consciously right we risk uh importing mechanisms developed for elsewhere with different political values baked into them importing them because it's easy because this code already exists but then we also inherit uh the the political uh baggage with it and the assumptions that went into it >> there was some more hand I think here in the front yeah >> yeah thank you for the talk and I think it's it is indeed like from a social perspective really interesting look at permanent hubs from a sustainability perspective how do you see that changing from doing temporary gatherings in

different places to having one face. How do you look at that? >> What sustainability are you talking about? >> The sustainability from a from a capital perspective. >> Well, I guess that uh it it shifts. Um I think it could be more sustainable to stay in a place, not travel around and book hotels all the time, if that is what you mean. But um I certainly hope to bring down cost of living as compared to the conference uh circuit but I'm I'm not sure that is exactly what you're asking for. Um there are so many aspects of sustainability, right? There's the

sustainability, social sustainability of the group. Uh does our culture um uh condense and and do we actually build one or does it fall apart? Uh how do we deal with conflict and such? So that's that's one question of sustainability. Then there is the local environmental sustainability. There is global. Is it sustainable to fly around uh the conference circuit all the time? No. Better to stay in a place. But yeah, many dimensions. Do you want to specify? >> Well, I think it allows very different business models to have a permanent place.

>> Absolutely. I think I think in the the uh the temporary gatherings are a first step and many of the temporary gatherings we've seen pop up in the last years are starting to think about permanence and that's not by chance right and it's yeah as that said it is maybe one reason is that many of us want to have kids and such and not travel around all the time but it's also a more uh institutional um reason behind that and one of them is also building uh building businesses uh and having stability uh to build businesses. Um so this is something I'm also thinking about a lot with the the commons hub I'm building that for me the common hub is first the economic engine that makes uh

the bigger project uh viable by providing uh providing capacity providing jobs and such. But it's also it's also a platform for uh future businesses uh to plug into and to build their own uh their own thing on top. And this stability is something that I think uh uh u temporary gatherings cannot provide in that uh in that way. >> Great. Thank you very much. Uh so we can thank the speaker again.

>> Thank you.