Bi-Cameral Design, Daos and Lean Startups?
This article will go into the specifics of bi-cameral design in governance systems and it's use cases in Daos (decentralized autonomous organizations).
I have research topics cooking up right now and none of them specifically follow the previous article on Bitcoin so as a small reminder, my mind is nomadic and this is the particular territory it has landed on: Bi-Cameral Design and decentralized governance. Inspired by the Optimism Collective’s approach.
So… What is bi-cameral design?
Bi-cameral design typically refers to a “two-house system” in governance systems. The type of system present in many world governments is where the legislature is divided into an upper and lower house (like the Senate and House of Representatives in the USA). It boils down to being a way for groups of people to make decisions more efficiently.
Why is this interesting?
Well, if you don’t live in the world of web3, blockchain, decentralized finance, or political science academia then you may not have heard a lot about innovation in governance systems mainly because most governments are long-established and haven’t been able to innovate on their governance systems quickly, ironically because changes require the governance system itself to work efficiently. One of the core virtues of blockchain is that experimentation is at the forefront of everything built in the industry, and unlike traditional governments, industry innovators can move fast and test with thousands of real and willing people. This offers an incredible opportunity to build out fresh governance systems and do rapid experimentation like one might do while releasing a product at a tech company.
This approach sounds simple, but the application of rapid iteration in tech products can lead to incredible results as indicated by the success of the “Lean Startup” methodology proposed over a decade ago and its application in companies like Dropbox, General Electric, and Qualcomm to name a few. Applying these concepts to governance systems creates the opportunity for innovation, and innovation creates beautiful and often better things.
Back to bi-cameral design; after reading the description you’ve probably realized you’re very familiar with the topic as you have probably voted and participated in such a system many times in your life. Suppose we’re going to think about how bi-cameral design can be improved. In that case, we have to find points of failure and inefficiencies, then ideally implement solutions and experiment with them until one solution does better than its predecessor.
To do that we’ll look again at a bi-cameral system that most people know, in the US government, and pick three of the most common “points of failure” mentioned.
Gridlock and Partisanship: for example when two chambers are controlled by different parties votes that require both houses to pass won’t go through.
Election and Re-election concerns: because cycles are 2 years and 6 years for the two houses in the US government, this causes short-term thinking for re-election versus long-term thinking and policy.
Money and Lobbying: this one is simple, chambers are often susceptible to the influence of money and lobbying.
Now I’ll start with the fact that I have no idea how to solve any of these problems but I am optimistic that using a modern lean startup-type methodology is one way to begin to tackle them. But of course, this would have to be in an environment where such things are possible, and luckily, Daos can provide that environment. If you don’t feel like reading the New York Times article linked about Daos, I’ll try to explain what they are. I like to think of Daos (decentralized autonomous organizations) as small digital governments where members can collectively make decisions, much like citizens would in a democracy. The real innovation is the fact that decisions can be automatically executed via smart contracts based on the established rules and votes of that digital government.
So how could you experiment with a Dao to attempt to solve one of the common problems of a bi-cameral system? Note first, that Daos also faces these problems and many other problems like low voter turnout.
In the example of gridlock, many governments will use a specific elected committee or group to help break the gridlock and come to a decision. With Dao technology, you could implement rotating or randomly selected councils/committees to tip the scales on a gridlock decision. You can do this in a way where you write a smart contract that automatically rotates the council say once a quarter, and randomly selects the council members amongst token holders. Even better, you can use Delv’s voting vaults to simplify the experimentation and smart contract writing process (shout out to my twin Charles and a deeper dive to come on what’s possible with this tech).
Say you try this rotating/random council selection and it doesn’t work for some reason. Well, the beauty of Daos is that there is the possibility and flexibility of implementing new systems over and over until you arrive at a solution that works. Maybe, the issue was that many of the randomly selected council members didn’t turn out to vote and were inactive in the community. Then you can tweak the voting vault rules such that only token holders who are also active in the community can be selected, etc. I bet if you keep doing this over and over you’ll wind up with a better solution than most governments have implemented today.
Let’s say you are dealing with the problem of money and lobbying influencing your governance system. More specifically, the fact that most Daos are one token = one vote, means that people with more money have a much larger influence in the voting system. I.e if I buy a large amount of the tokens I could always have significant influence in the vote if I wanted to. Enter implementations like quadratic voting where your vote is the square root of the amount of tokens you hold, reducing the power of majority-share token holders.
In the last example, say you want your ideal voter/member to be someone who has a monetary stake in the organization, cares about the organization, is very involved in the community, and contributes open-source work to further the development of the organization. You could, using council kit or your custom smart contracts, create a weighted system where votes are allocated based on how you weigh those different attributes. This could look something like this, where voting power = (number of commits)*weight0 + (meaningful activity in discord, commonwealth, etc.)*weight1 + (use of the protocol on-chain)*weight2 + (number of tokens)*weight3 + (number of delegations to that member)*weight4. Where the weights can constantly be tweaked based on historical data to find an ideal balance that works for that organization.
If you think about this concept and apply it to the world outside of the blockchain, it raises some serious ethical, practical, and philosophical questions. It challenges the principle of equal voting rights, a cornerstone of most democratic systems. I hope that through iterative experimentation with Daos, some of these questions can be answered. For that reason, the future of many types of governance may be on-chain!
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