Human Coordination

Sometimes people ask me why I’m passionate about crypto. Yes, there are fortunes to be made here but I’ve made money in stocks before with far less time and interest invested. It’s not simple curiosity. There’s endless knowledge to be gained in a variety of technical fields and I’m plenty curious about genetics and AI but I don’t direct the same energies there (though I once did). I’m not just ‘in it for the tech’ either. While there are some beautiful design elements to blockchain architecture my initial impression of Solidity contract development and the supporting tools hasn’t impressed me as much as other tech stacks I’ve had to learn. Blockchain tech isn’t some shining beacon on a hill of perfection that I sit and marvel at. So why has it kept my interest all this time? The short answer is this field is the only place seriously making progress on the single most important topic in all of history: human coordination.

Outside of crypto progress on human coordination proceeds at the snail’s pace of decades and centuries. Occasionally a new nation is founded and there’s an interesting innovation in a constitution such as checks and balances or ranked-choice voting. Sometimes a new company is founded that has a cooperative ownership structure or offers some new technology like upvote systems that allow us to scale up a network of content authors and direct community attention to the best, most relevant data. But in Defi, new DAOs are seemingly founded every day. Each DAO inspires the creation and restructuring of other DAOs. Today we see the rise of inalienable reputational influence in the Optimism DAO, tokenized bribe influence in the Alchemix tokenomics revision, the rise of liquidity provider tokens as capital voting tokens in Balancer, and retroactive influence redistribution based on the predictive power of voters with UMA’s KPIs. This is the uncharted territory of the new world we’re exploring together.

So why, is this so important? The pillars of technology that enable our destruction have far outpaced the pillar of technology that prevents it. All of our greatest threats are planetary in scale. This applies to everything from antibiotic overuse, to ocean acidification, overfishing, nuclear proliferation, and wealth inequality. Solving planetary scale challenges by definition requires coordination at a planetary scale. Our usual solution to forcing uncooperative parties to behave is to coerce them using military force. “When reason fails, might prevails.” This does not work at a planetary scale without a Leviathan global military and if that’s our only solution the medicine might be worse than the cure.

However, there is value in coordinating with others and that value (if properly aligned) should allow us as a species to work together at a planetary scale. Humans are wealthier and more capable as we work together. Many planetary scale threats (not all) require technology and effort at scale that is not feasible for an isolated tribe of humans. The simplest thing we can do is to deny the people doing us harm the benefits of the rest of humanity. This denies them the value of coordination and consequently makes them less capable of causing harm and poorer.

For those who wish to coordinate at a planetary scale we can direct this coordination through a shared economic system. Commonly this is an exchange of information, technology, and trade. If there is a shared economic system that people have opted into then it can be used to shape incentives for all participants. This leads us back to the matter of planetary scale threats. Many planetary scale threats (not all) are also driven by economic incentives. Actions are being taken that push negative externalities onto others because it benefits the actor personally. This leads to tragedy of the commons scenarios. When the problem has an economic source there can be an economic solution. It must be rational as an individual to do the global optimal thing. The relative costs and benefits of actions can be manipulated by adding logic to the shared economic system. By changing the incentives you can change behavior. This is a deeply powerful thing.

I’ve seen too many proposals to our largest problems that aren’t viable because they require people to act in altruistic ways. “Why won’t people just stop polluting, hoarding, spreading disease, etc? Don’t they know it’s for their own good?” Invariably these solutions ignore human nature. Any proposed solution to our problems that requires fixing human nature is basically an admission that we’re going to have to live with the problem or go extinct. This solution, fortunately, does not require that. Instead it stacks upon the incentive systems that have already been shown to be largely effective.

Supposing you buy this argument that we should work as a species to create a shared economic system and utilize it to solve planetary scale threats by manipulating economic incentives, why does this require crypto? I have two basic answers. First, as alluded to above this ecosystem is the only place I’m aware of where serious experimentation with governance is occurring. Second, blockchains, through smart contracts, offers solutions uniquely suited to implementing this shared economic system. A solution needs to be opt-in because no global government exists to coerce all network participants militarily. The system is going to be massive which means it will need to be modular and composable to tackle the inherent complexity of this problem. Since the incentive system is economic in nature there needs to be a unified monetary system attached to it binding all participants. This monetary system needs to be neutral and not belong to any one participant or else it threatens the sovereignty of the other actors. Executing these incentives needs to be scalable which basically implies a program needs to do it but that program needs to be incorruptible to be trustable. Crypto is providing the consensus, execution, and governance technologies required for such a system to be practically built and adopted. A solution of this form exists nowhere else; without such a solution our lack of coordination will be our undoing.

This outlines the form of a solution to humanities greatest threats. I’m not neglecting the plethora of issues with bootstrapping and maintaining such a system but rather I think breaking down this problem yields other more tractable problems. Here are just a subset of the large challenges before us and solutions being experimented with in crypto to address them:

1. Decentralized oracles. How do we agree on objective reality? How do we prevent misinformation from entering the system? (Chainlink, the Graph)
2. State management. How do we prevent the single version of truth from tampering? How do we scale these systems while making them sufficiently resilient? (L1)
3. Execution. How do we enforce rules upon nation states? How do you contest results? (Smart contracts, optimistic oracles)
4. Governance. How do we administrate these systems when people disagree? How do we distribute influence over them? How do we mitigate the influence of ignorance and malice from these systems? (Proxy contracts, multi-sigs, quadratic voting, Sybil resistance, reputation systems, bonded KPIs, etc)
5. Bootstrapping. Who are going to be the first people/nations to join such a system and how does this system empower them and encourage others to follow? (Airdrops, inflationary governance tokens, dao to dao trade agreements)
6. Trust. How do we prepare humanity for these systems? (Layer 0)

Each of these problems, while difficult, looks more fundamentally solvable then the grander problem does without them and the form of the solution outlined above looks more palatable and sustainable than a global military enforcing its will on us all and better than extinction in any case.

That brings me back to my main point. This industry is the single most important thing any of us can be involved in. Your involvement, no matter how trivial, is contributing to one of the brightest and most significant technology trends in human history. If nothing else, your mere presence here makes you a data point. You can’t walk this path and not leave footprints that help to guide others. Every step we take as an industry is charting territory. If you have received an airdrop, you are helping experiment with bootstrapping mechanisms. If you’ve voted in a snapshot poll you’ve helped improve the UX of governance solutions. If you lent or borrowed funds you’ve indirectly funded a decentralized oracle. If you posted on Reddit or Twitter, you’ve helped shape Layer 0. If you are here in this Rabbit Hole with me, you are invariably contributing to something significant.

We are working to make the world a better place rather than just preparing for the world to be a worse one. This journey will be a long one and there are many dangers along the way but I invite you to walk it with me.

Footnotes

I expanded on some historical examples of applying economic coercion here but inherently when you are talking about planetary scale threats the examples become political and the response was frustratingly divisive.

I did a deeper dive into solving an overfishing example here but it’s comparatively dry and didn’t fit in the flow of this post.