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From YouTube: Why Crypto Protocols Are Failing at Governance, and How to Fix It by Charles St. Louis
Description
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https://archive.devcon.org/archive/watch/6/why-crypto-protocols-are-failing-at-governance-and-how-to-fix-it/
Governments have failed and evolved over thousands of years. But some web3 projects were built as though they’d get it right on the first try. That’s not realistic. And it’s not working. People don’t vote, the rules are complex, and protocols aren’t inclusive.
No one solution fixes all our problems but what we can do is build more adaptable governance systems. With a flexible, upgradeable, and modular foundation, governance systems can increase innovation & participation and decrease turmoil.
Speaker(s): Charles St. Louis
Skill level: Beginner
Track: Governance & Coordination
Keywords: governance,DAOs,community
Follow us: https://twitter.com/efdevcon, https://twitter.com/ethereum
Learn more about devcon: https://www.devcon.org/
Learn more about ethereum: https://ethereum.org/
Devcon is the Ethereum conference for developers, researchers, thinkers, and makers.
Devcon 6 was held in Bogotá, Colombia on Oct 11 - 14, 2022.
Devcon is organized and presented by the Ethereum Foundation, with the support of our sponsors. To find out more, please visit https://ethereum.foundation/
A
A
A
A
A
So.
Today
we're
going
to
talk
about
our
governance
structures.
Why
they're
failing
are
Dows
and
protocols
and
how
to
approach
fixing
it
I
might
have
a
small
life
throughout
the
presentation,
so
I
hope
you
can
spot
it,
but
yeah
again:
I'm
Charles,
St,
Louis
I'm,
the
chief
operating
officer
at
element,
finance
and
head
of
governance.
A
A
A
The
next
came
Empires,
which
introduced
a
large
amount
of
hierarchies
and
power
inequality,
but
the
thing
about
Empires
is
that
they
always
fail
from
Empires.
We
came
to
democracy,
it
didn't
come
easy.
There
was
a
lot
of
battling
and
fighting
to
make
this
happen,
but
it
truly
introduced
the
first
concept
of
the
vote
where
everyone
in
society,
or
at
least
some
people
in
society
inclusivity,
didn't
take
that
much
time
to
like
develop
through
that,
but
each
person
had
a
say
in
their
governance
decisions
and
how
things
move
forward.
A
So
how
can
we
expect
this
to
be
an
efficient
system
from
democracies
we
had
republics,
which
weren't
too
far
away
from
each
other,
as
you
can
see
here,
like
they're,
not
mutually
exclusive,
the
only
difference
is
that
we're
essentially
trusting
people
who
are
paid
compensated
to
be
experts
in
their
area
to
make
decisions
for
us
and
obviously
with
republics,
became
constitutional
republics
and
so
on.
It
is
paraphrased
history.
A
A
A
A
A
So
these
are
some
of
the
pioneers
of
the
governance
systems
that
we've
seen
in
ethereum
and
generally
in
blockchain
and
I'm,
not
picking
on
these
protocols
at
all
they've
done
so
much
for
the
entire
ecosystem.
But
there
definitely
are
some
challenges
in
these
systems
around
adapting
too
slowly
or
not
at
all.
A
We
have
a
lot
to
thank
to
maker.
They
were
the
first
on-cheam
system
in
ethereum
and
they've
done
so
much
great
work,
but
at
the
same
time
they
aren't
easily
adaptable.
They
have
a
smart
contract
system
that
was
deployed
once
in
order
to
change
anything
you'd
have
to
completely
redeploy
the
system.
You'd
have
a
token
migration.
You'd
have
a
lot
of
technical
debt,
user
disruption
and
much
more
so
it's
not
simply
easy
to
evolve
in
a
similar
case
with
compound.
A
Yes,
they
did
Master
upgradability
of
smart
contracts,
but
that
also
comes
with
the
technical
debt
user
disruption
every
time
they
want
to
add
a
feature
or
a
security
feature,
and
that
is
a
problem,
because
a
lot
of
protocols
in
the
space
have
actually
forked
compound
governance.
We've
gone
from
alpha
to
Bravo.
A
Projects
like
uniswap
and
Bitcoin
are
both
following
that
system
and
they
have
to
upgrade
their
systems
each
time
too,
or
unless
they
fall
victim
to
vulnerability
security
and
lack
of
features.
We
also
have
a
big
favorite
here
urine.
The
protocol
is
absolutely
awesome.
They
have
this
upgradability
via
modularity
system
in
their
core
protocol.
However,
on
the
governance
side,
it's
still
a
little
lacking
because
it
is
relying
on
a
lot
of
semi-centralized
parties
with
multi-cigs
executing
transactions.
A
Lastly,
not
so
related
to
defy,
but
we
have
Aragon
to
be
able
to
be
one
of
the
projects
who
invented
the
term
Dao
and
and
really
brought
it
to
the
market
and
they've
done
a
lot
of
customization
with
their
projects.
So
you
can
do
a
lot
of
different
voting
systems,
different
types
of
quorums,
etc,
etc,
but
because
it's
so
customizable
the
smart
contracts
structure
suffers
a
little.
It's
almost
too
upgradable
in
the
sense
of
smart
contract
upgradability,
not
just
modularity
all
right.
A
So
here's
the
little
lie
that
I
told
you
about
so
I'm,
not
going
to
tell
you
that
there's
one
solution
fixes
all
our
problems.
There's
way
too
many
to
address
there,
but
there
is
something
that
we
can
do
to
help
significantly
improve
the
failure
of
all
our
governance
systems
and
help
them
adapt
way
faster.
A
And
that
is
to
build
adoptable
governance
systems
from
the
start
and
I
know
that's
big,
but
what
we've
done
at
element
is
to
build
a
very
minimal
core
structure
at
the
foundational
layer,
and
everything
else
is
modular.
That
way
you
can
upgrade
quickly.
You
can
remove
things
if
you
don't
like
them
and
it
evolves
more
quickly
with
the
political
dynamics
of
your
protocol
or
Dao.
A
What
we
can
do
is
allow
the
actual
people
in
the
trenches
on
our
GitHub
on
our
discords
speaking
on
community
calls
to
have
a
say
in
governance
as
well.
To
equalize
that
Capital
burden,
the
second
one
applies
to
all
of
D5,
of
course,
in
governance,
and
that
is
to
make
voting.
Not
a
burden
for
people.
A
A
It's
very
simple,
that's
it!
That's
all
all
this
does
at
the
center
of
the
governance
system
is
to
define
the
voting
process
for
those
with
governance
power
in
the
system.
It
tracks
proposals
and
counts
their
voting
power
and
it
retrieves
user
voting
power
from
approved
sources
which
I'll
get
to
in
a
quick
second.
A
A
In
a
way,
this
allows
you
to
sign
voting
power
to
any
person,
use
case
position
Etc,
so
it
breeds
inclusivity,
but
also
Capital
efficiency,
which
is
a
huge
problem
with
D5
voting
governance
voting.
The
next
is
optimistic
grants
and
that's
kind
of
a
Twist
on
optimistic
Roll-Ups,
but
also
the
literal
sense
of
the
word
optimistic,
because
many
grants,
programs
with
dials
or
organizations
are
very
pessimistic.
They
assume
the
grantee
is
going
to
fail
at
their
work.
A
A
If
a
dow
team
has
to
go
through
the
regular
governance
process
that
everyone
else
has
to
go
through,
decisions
take
forever
processes,
you
developed
kind
of
become
outdated
and
it
results
in
a
lot
of
people.
Just
not
wanting
to
get
their
daily
work
done
because
it
takes
a
month
three
weeks
to
pass
a
vote.
A
It's
a
little
more
on
the
governance
during
Council
like
I
mentioned,
it
was
definitely
inspired
by
traditional
corporate
governance,
because
we
can't
discredit
that
it's
worked
for
Generations,
it's
been
battle,
tested
I,
get
that
we
like
inventing
new
things
and
trying
new
things,
but
this
stuff
works.
So
why
don't
we
try
it
here?
The
way
it
works.
Is
you
become
a
GSC
member
by
getting
delegated
votes
from
anyone
here?
A
Once
you
reach
a
certain
threshold,
you're
then
able
to
join
the
GSC,
and
what
that
means
by
joining
the
GC
is
like
you're,
given
authority
over
your
work.
People
trust
you.
You
should
be
able
to
do
things
The,
Authority,
we've
baked
into
this.
Is
the
ability
to
push
boats
on
chain
automatically
so
without
having
to
go
through
that
long
external
governance
process,
so
they
can
make
the
calls
for
people
at
the
top
level.
A
The
second
one
is
they
can
spend
part
of
the
treasury
up
to
a
certain
limit,
but
they
can
still
do
one-off,
Brands
bug
bounties,
you
name
it.
They
don't
have
to
pass
that
vote
through,
like
a
month-long
process
to
spend
some
of
the
treasury,
which
is
good
in
some
senses,
which
is
why
it's
capped
at
petty
cash
levels
and
the
last
one
like
I
mentioned.
Other
councils
within
the
system
can
be
formed
using
the
smart
contract
structure.
A
Dow
teams
can
have
authority
over
their
expertise,
so
a
treasury
management
working
group
could
spend
the
treasury
without
a
resistance
or
a
protocol
team
could
basically
deploy
things
to
the
protocol
without
having
to
be
burdened
with
the
rest
of
the
voting
process,
all
right.
So
this
is
my
favorite
and
it
is
voting
vaults
and
the
reason
I
mean
the
main
reason
we
developed
this
system
is
that
a
lot
of
governance
systems
today
make
you
lock
your
voting
tokens
in
the
governance
contract.
A
All
you
can
do
is
vote
if
you're
a
small
minnow
in
a
sea
of
whales.
Your
vote
barely
matters.
Why
wouldn't
you
go
use
your
tokens
and
put
it
in
defy
or
make
some
Capital
out
of
it?
So
it's
really
inefficient
from
that
standpoint.
So
what
we
did
here
is
we
allow
you
to
assign
voting
power
to
those
types
of
positions
or
reputation,
and
those
people
are
automatically
given
votes
in
the
system,
so
it
balances
out
the
like
Capital
barrier
of
people
just
buying
tokens
and
they're,
also
modular
and
upgradable.
A
So
what
I
mean
by
that
is,
let's
say
you
assign
voting
power
to
GitHub
contributors
and
you
find
that
their
voting
power
is
too
little
or
too
high.
You
can
change
that
through
governance.
You
can
also
upgrade
these
things
quite
easily
and
I
get
that
this
is
very
theoretical,
so
I
did
highlight
a
couple
examples
to
make
it
real
for
everyone.
A
The
first
one
is
probably
the
most
interesting,
and
that
is
a
compound
Ave
maker
voting
vault.
So,
like
I
mentioned
before,
you
have
to
lock
your
tokens
in
those
systems
to
get
voting
power,
but
in
this
system
using
Council,
you
can
essentially
borrow
against
your
CL,
like
your
collateral
in
these
systems,
but
still
maintain
the
ability
to
vote
or
delegate.
A
So
you
get
the
best
Both
Worlds
in
a
similar.
In
a
similar
case,
you
have
the
lp
volt,
so
you
could
be
in
a
liquidity
provision
and
still
maintain
the
ability
to
delegate
or
vote.
And,
lastly,
the
identity
verified.
Vault
is
pretty
cool,
so
you
could
verify
your
identity
on
chain
and
get
voting
power
for
that,
or
even
a
reputational
thing,
where
it's
an
aggregate
score
of
your
work
and
GitHub
discourse.
Community
calls
working
groups
and
it
scores
it
and
assigns
voting
power
and
the
last
one
is
an
nft.
A
So
if,
like
you
own
an
ft,
you
could
basically
map
that
to
voting
power
in
the
element
system.
When
we
launched,
we
gave
a
gift
to
the
community,
and
that
was
the
lfiverse
nfts.
So
right
now,
someone
in
the
community
is
building
a
voting
Vault
to
give
anyone
with
an
nft
voting
power
in
the
system.
It
really
spreads
out
the
inclusivity
of
the
whole
Community,
which
is
absolutely
amazing,
so
dry
here
all
right.
A
So
the
next
is
optimistic
grants
which,
like
I,
said
it's
an
optimistic
Twist
on
the
pessimistic
view
of
grand
systems,
whether
it's
just
from
an
organization,
a
Dao
and
whatnot.
So
the
base
like
the
tldr
is
that
you
can
set
a
schedule
and
a
Time
expiry.
The
grantee
can
claim
that
Grant.
If
the
time
expiry
is
hit
without
it
getting
clawed
back.
So
when
the
Grant's
allocated
it
contains
that
expiry
date,
if
it
isn't
removed
by
that
date,
they
can
withdraw
and
get
their
Grant.
A
Foreign,
so
what
does
this
entire
system
look?
Like
I
said
it's
modular,
so
there's
many
options,
the
first
one
being
what
we
chose
for
element
Dao
and
it
is
a
refined
form
of
rep,
like
representative
democracy,
so
with
the
GSC.
It's
basically
like
representative
democracy,
but,
as
you
can
see
here,
this
is
this
is
only
the
core
contract,
so
it
tracks
the
proposals,
counts,
voting
power,
retrieves
retrieves,
the
voting
power
from
the
defined
voting,
vaults
and
basically
the
time
lock
up
here,
can
add
new
Quorum
or
change
the
voting
vaults
as
we
go.
A
A
Your
system
could
also
look
something
like
this,
which
is
liquid
democracy,
so
you
take
away
the
GSC,
because
you
just
want
simple
delegation,
and
the
last
one
I
want
to
show
is
just
inclusive
governance.
I
also
took
out
the
time
lock.
The
time
lock
is
definitely
a
recommended
security
feature
because
it
has
a
pause
between
when
you
make
execution
in
calls.
But
if
you
want
things
to
happen
quicker
and
you
don't
care
about
that
risk
like
you
can
remove
it.
It's
like
D5
Legos,
but
governance,
Legos.
A
So
by
now,
I've
talked
about
the
long
history
of
failing
governments
and
how
it
takes
so
long
to
improve.
I've
talked
about
our
considerations
with
how
we
built
this
system
and
the
core
and
the
modular
aspect
of
our
architecture.
So
now,
I
just
want
to
talk
a
bit
about
the
council
protocol
in
action.
A
So
we
launched
governance
for
element
on
March
31st
of
this
year
and
we
were
really
excited
to
just
see
the
traction
happen.
I
mean
a
lot
of.
This
was
a
big
experiment
right,
the
GSC,
the
rolling
the
rolling
delegation
was
very
new,
so
we
weren't
sure
if
it
was
going
to
work,
but
today
I'm
happy
to
say
that
the
GSE
is
nine
people
and
they
all
have
together
pushed
forward
quite
a
few
proposals
to
improve
the
system
on
the
social
layer,
but
also
on
the
protocol
layer.
A
We
also
have
two
voting
vaults,
a
vesting
one
and
a
locking
one.
The
vesting
one
essentially
allows
like
the
core
contributors
who
created
this
protocol-
investors,
advisors
key
Partners
to
have
voting
power
in
the
system,
but
a
lower
multiple.
So
the
community
outweighs
the
actual
core
team,
which
is
a
pretty
cool
balance
of
voting
power.
A
A
Right
now,
I
mean
they've
pushed
proposal
forward.
They
haven't
spent
any
of
the
treasure.
Yet
we
have
to
see
if
that
actually
helps
scaling
these
decision-making
processes,
and
if
it
doesn't,
we
might
go
back
to
the
direct
democracy
that
everyone
else
uses
where
everyone
just
has
the
ability
to
delegate
their
Vote
or
vote
themselves.
A
So
what
can
you
do
with
Council
today?
Well,
you
can
do
a
lot.
I
mean
you
can
Fork
us.
You
can
build
with
us.
It's
all
open.
Any
dower
protocol
can
use
this
for
their
own
governance
system
and,
like
I
mentioned,
the
system
is
very
upgradable.
It's
modular,
it's
literally
built
for
experimentation.
We
want
people
to
try
things.
Add
it
to
our
system
create
a
voting
Vault
so
that
your
governance
protocol
can
have
vote
in
ours
and
vice
versa.
The
possibilities
are
endless,
so
you
can
use
this
system
or
you
can
add
more
to
it.
A
So
with
that
I've
gone
over
all
the
problems
with
governance,
how
we
can
adapt
faster
and
the
architecture
of
what
it
could
look
like
if
you
were
to
adopt
this
model,
but
right
now,
I
just
want
to
say
that,
like
governance
is
evolving,
as
always,
it's
going
to
fail.
As
always,
so
we
should
build
these
systems
to
adapt
quicker
and
for
us,
governance
systems
are
literally
the
make
or
break
for
our
protocols.
A
B
You
that
was
super
interesting,
I'm,
really
Amazed
by
the
way
that
you're
thinking
about
Governors
and
the
upgradability
of
it,
and
so
my
question
is
a
little
bit
philosophical
sorry
about
that.
But
delegation
I
see
it
as
a
way
to
handle
this
problem
that
people
don't
want
to
vote
right,
but
delegation
can't
always
work
because
it
can
very
easily
if
people
don't
care,
it
can
very
easily
turn
into
popularity.
B
Games
like
who
do
I
know
that
I
can
delegate
my
votes
to
so
like
we
have
this
problem
that
people
don't
want
to
vote
and
delegation
is
not
really
a
solution
to
it.
So
how?
How
in
your
experience,
can
we
have
people
engage
more,
be
more
I,
don't
know
socially
responsible
and
all
of
that
and
I
have
a
second
question.
I,
don't
want
to
monopolize
so
feel
free,
not
to
answer,
but
I
also
think
that
reputation
is
kind
of
very
key
element
to
solving
governance
issues.
A
So
if
I
choose
you
as
my
first
one
you're
my
second
year,
my
third,
if
you're
away
for
a
weekend
with
your
family,
it
reverts
to
him
and
then
to
you.
So
it
just
kind
of
plays
more
to
that
human
level
of
governance,
like
people
have
their
lives,
they're,
not
always
going
to
be
online
and
so
on,
but
also
adding
the
time
expiry
of
Delegation.
So
if
I
delegate
to
you
and
I
forget
about
it
for
a
year,
my
votes
are
basically
just
wasted,
especially
if
you
stop
voting.
A
As
for
the
reputational
thing,
it's
definitely
a
tough
one
maker
did
a
really
cool
experiment
with
Source
cred,
where
they
like
had
a
custom
algorithm
that
took
months
to
kind
of
filter
in
their
discourse
forum,
but
it
assigned
kind
of
incentives
for
those
participation.
People
I
think
the
reputational
layer
can
definitely
be
gamed
and
whenever
you
add
metrics
to
something,
there's
definitely
risks.
A
But
if
you
could
aggregate
like
certain
scores
and
like
for
like
my
involvement
in
Discord,
my
involvement
on
community
calls
the
or
the
more
tangible
things
like
GitHub
commits,
and
you
aggregate
into
a
score.
I
think
you
can
kind
of
give
you
some
level
of
their
like
participation
in
the
system
or
if
they
own
an
nft.
So
you
kind
of
have
to
pull
from
a
lot
of
different
sources
to
even
like
vet.
If
they're
like
an
active
member
versus
like
the
gameable
aspects
but
yeah,
it's
definitely
a
tough
subject.
C
Charles
you
talk
about
here.
You
talk
about
a
delegation
expiring
after
certain
amount
of
time,
I'm
wondering.
Are
you
guys
creating
certain
rituals
or,
let's
say
re-elections,
every
every?
Let's
say
certain
amount
of
time
and
yeah
I'm
asking
this
is
because,
as
you
said,
some
people
use
delegate
and
then
they
forget
about
it
and
and
yeah
there's
no
retools,
there's
no
like
a
way
for
coming
back,
like
as
we
do
it
in
traditional
governance.
We
have,
let's
say
in
governments,
we
have
like
four
years
election
or
stuff
like
that.
A
Yeah
so
when
we
originally
came
up
with
a
governance
steering
Council,
the
idea
was
to
have
like
election
Styles
like
every
six
months
in
the
beginning
and
then
like
maybe
like
every
year,
but
there
is
a
big
problem
with
that
and
as
the
off-boarding
of
a
member
who
is
a
big
delegate
or
a
council
member,
you
have
to
create
a
very
like
stronghold
process
involves
governance.
So
that's
why
we
went
with
the
rolling
King
of
the
Hill
Style
with
like
a
delegation
threshold.
A
A
C
A
So
it's
a
roof.
It's
representative
democracy
like
but
mixed
with
liquid
Deli
like
democracy,
that's
a
mouthful
but
yeah.
So
it's
a
group
of
people
on
a
council
being
able
to
do
things.
Someone
does
something
malicious
or
they're,
just
not
doing
a
great
job.
People
stop
delegating
to
them.
So
that's
liquid
democracy
aspect
and
then
once
they
fall
below
the
threshold,
someone
kicks
them,
they're
no
longer
in
Authority
position.
A
So
it's
a
lot
quicker
than
having
to
do
an
off-boarding
proposal
where
it
takes
a
month
to
Upward
someone
where
they
can
still
do
bad
things
or
be
an
active
and
get
compensated
for
it.
We'll
see
if
it
works,
I
mean
the
election
style
is
not
out
of
the
question.
I
think
it's
just
a
worthy
experiment
to
try
for
sure.