About Decentralized Decision Maker (DDM)
The fund raising problem of decentralized autonomous organizations (DAO) and related communities has always been a hot topic of discussion within the blockchain community. We have deeply felt the advantages of DAO at solving work and management problems of open source communities. We have also noticed the shortcomings and flaws of the ICO system in the fundraising stage. As a result, we have decided to propose Decentralized Decision Maker based on the cooperation method of decentralized structures.
Decentralized Decision-making Committee（DDC）
Decentralized Decision Maker（DDM）
1. What is Decentralized Decision Maker
Decentralized Decision Maker is mainly based on the cooperation method of a decentralized system. Taking a partnership system in a business partnership for example, this is commonly seen in financial, accounting, and consulting fields. We believe that for a decentralized system, financial activities are currently the easiest to implement. Hence, the Decentralized Decision Maker we propose can be of reference to companies in related fields when conducting financial activities. Furthermore, Decentralized Decision Maker provides an improvement to the unrefined ICO. Blockchains should be able to self-monitor and promote community improvement.
1) Libertarianism and Community
In the annals of human history there is a grand chapter called the Roman Republic. A very important belief of the Roman Republic was freedom. Freedom was a shared belief in every Roman that was chasing power, as a result, all political actions and debates were within the structure of this belief in freedom. We can state that the Roman Republic was a “community made up of libertarians”.
Roman politicians have all kinds of different understanding and applications of the concept of freedom, but in reality this belies the principle of escaping monarchy and gaining freedom – the rights of Roman citizens: to be equal in the face of law. To a certain extent you are protected from autocratic oppression, and have the lawful right to elect administrative officers.
Yet, people that believe the Roman Republic was a democratic system forgot the truth of one thing: political power doesn’t exist in a vacuum, but in society and economic structure. Those are the places where it is decided if democracy can become reality.
We believe that, in a community’s development, no matter if it is a blockchain community, one must ponder a question – what is its social and economic structure? In reality, when we participate in an event, regardless if it’s voting or investing, it will be because there is a social or economic structure. To put it simply, social and economic structures decide the reason and nature of our every activity.
In a community, no matter if it’s based on an internet app or one that utilizes blockchain, we should consider these important question:
1) What are our relations of production?
2) How is power delegated?
3) What are our economic activities and what regulations are there?
Founders of blockchain communities often propose grandiose dreams, and attempt to create industry platforms, but life isn’t always what you want it to be – they lack actual product landing. Many valuations of blockchain projects are established on the assumption that they can achieve an immense autonomous community. What we have to be aware of is, an autonomous community requires specific social and economic structures.
Take Bitcoin for example, it has three categories of characters: core developers, miners, and users. They make up the social structure of the Bitcoin community. Miners and users contribute the main economic activities, or the transfer of coins. Only Bitcoin’s core developers aren’t able to fully participate in economic activities, and don’t have an effective protection system to ensure their interests. As a result, later founders of cryptocurrency used ICOs to secure their economic activity status. What’s dangerous is that this method allows core developers too big an advantage in social and economic activities. This makes the development team absolute “kings” of the community, and the “rights of kings” are supreme.
England’s William Pitt, 1st Earl of Chatham, once said: “the wind may blow through it — the rain may enter — but the King of England cannot enter”. When at the same time ensuring the social and economic structure of the core team (expanded below), we must also think of where boundaries should be drawn. Even the country, a highly complicated and autonomous beast is able to do so, not to mention a group of people in today’s society. The history of the Roman Republic and Ancient Greece has taught us:
We need a “king”, but what we need more is a “parliament”!
2) Team and Organization
A group, or in other words a team, becoming the basic unit of politics, economics, scientific research, and other activities has been on the rise. We believe that an organization is just a team with a more complicated structure. Only a team with a clear organizational structure (minimalized social structure) and economic structure will have a more stable development and evolution. We have noticed that in blockchain projects nowadays, only the team is introduced and lack elaboration on organizational structure.
Although an organization is only just a team with a more complicated structure, but it is this structure that increases a team’s decision making efficiency and execution ability. We have seen that trending blockchain communities like Ethereum and EOS have a concentrated organizational structure, for instance, Ehereum’s Vitalik Buteran and BM of EOS. Although no official statement has been given about the organization, but the structure of the organization can be inferred.
If a team can push for change in the world using some kind of technology, in the beginning they often rely on a central leading figure. Afterwards, they rely on a stable and efficient organization to complete their goals. We believe that the Bitcoin core team and Blockstream were lacking in promotion in the latter stages is due to the glory behind Satoshi Nakamoto fading and at the same time they were unable to form a self-growing and improving organization.
In the early stages of a project, a self-growing organization that is based on a decentralized system to establish connections isn’t looking for how well-known their team is or their backgrounds, and definitely not if the industry is trending. It is based on how competitive their organization is.
3) Interim Summary
After examining some historical cases, and combined with cases in today’s blockchain economic activities, we should have a firm understanding that blockchain projects must have a clear social and economic structure.
Social structure: in a community based on blockchain technology, how should token holders be distributed, wield their rights in the community, and interact with other characters in the community.
Economic structure: how should the economic resources gathered in the tokens be managed – this is usually a problem when investing in currencies (e.g. Ethereum). New communities are often not mature enough, and are defined by a more mature and widely accepted alternate resource, like copper coins for example.
At the moment, blockchain fundraising and the scene they paint often only explain what problem they solved. These fundraising activities also represent the ecosystem. As a result, in a decentralized community based on a decentralized system there must be a decentralized “constitution” – a document that details the characters and structure of the community and their relations. What is even more important than writing a constitution is creating the basics of an organization to write and edit said constitution. The scope of a decentralized “constitution” is on par with the founding of the United States of America and its constitution.
2.Value: Anchoring, Market, and Price
The blockchain community has always been undecided on its stance towards anchoring of listing tokens. On one hand, they are unable to form a stable anchor because they need a future with unlimited possibilities, and on the other hand, they wish to profit from a stable anchor. Before we discuss this problem, we must first face another question, has currency ever been stable?
The answer is obviously negative. If we look at time on a larger scale, we will easily discover that if we use a natural resource as anchoring, legal tender will also undergo a large fluctuation. As a Chinese citizen, having a coin with the former president of the Republic of China on it (main currency in use during the Republic of China era) nowadays will see a ten times increase in worth of the coin. With the changes in social activities like war, decline, and upheavals the basic mechanism of legal tender is ever changing. Yet, by its nature, the core of price anchoring doesn’t rely on external conditions, but on social regulations and activities. Social regulations sometimes don’t even have to define an actual object to anchor the value of a currency, for instance when central banks issue currency. In this condition, no matter how much currency is issued, the market will regulate itself and price all products.
The market is seemingly ever changing, that is because power shifts too fast.
People with an advantageous social standing never seem to have to worry about currency problems. So, currency, or the price anchoring surrounding currency, shouldn’t be the core of this great economical experiment that is blockchains. The core should be in what forms should blockchains or distributed systems define constitutions – the economic and social structure, more civilized and democratically. The anchoring should only be a byproduct – a supplement – quantifying and combining the reasons for the change in this type of structure.
We hope to be able to clearly point out the essence and then realize this ideal. We will attempt the simplest economic form, investors and an innovative organization – the BitRabbit team.
3. Realization: Parliament and Government
The ideal of the BitRabbit team is very simple, we need a committee.
The BitRabbit team has a clear goal, to attempt to use a blockchain method to establish a correct and controlled investment process. There are two categories of blockchain investment projects:
1) Simply allocating equities onto blockchains, where the blockchain is only used as an investment and financing tool for recording uses. The main purpose is only to cut down on the cost of equity investments.
2) An unrefined ICO method. Everybody says that hope is born in desperate times, as for how effective it is, we won’t elaborate further.
The BitRabbit team wishes to propose a middle ground between equity investment and an ICO method where both party’s powers are kept in check by each other:
1) The committee (Decentralized Decision Makers) have the right to control the government’s financial budget;
- Investors decide the monthly team budget;
- Investors have the right to vote on decreasing or even withdrawing investments;
2) The government (team) can increase funding through reaching performance targets: by committing to a performance standard and getting a bigger allowance, or even by transferring partial administrative powers to facilitate certain actions, for instance;
- Increasing the value of seats;
- Increasing the number of seats;
We will clarify the rules of procedure and enforcement mechanisms of the system in the appendix.
4. Transitional Contract: Making Smart Contracts Legally Binding
Does there exist a society: where it is highly advanced, the constitution is implemented by procedures, everyone consents to obeying the constitution, or the constitution is the product of everyone’s consensus? Although this is highly idealized, but it isn’t entirely impossible. In this society, we would happily write out something akin to company policy and all activities would be carried out and ensured by constitutional procedure. This world may sound unbelievable, but the advanced development of our business society is based on the spirit of observing contracts.
The spirit of the contract can’t only be upheld through a centralized government and its power, it also needs to be able to function in a decentralized system. In our framework:
1) Both sides of the contract upload their legal personal identification documents through private key encryption onto an interplanetary file system (IPFS);
- Including one photo ID, and an authorized photo held in hand;
- To ensure that photo IDs will only be used for the intended purposes, a watermark that blocks optical forgery will be added to the photo. The watermark is the public key address of your self-signed smart contract;
2) Both parties exchange private keys to confirm each other’s identities;
3) Both parties sign a smart contract;
4) If one side loses personal identification or the smart contract private key, a new IPFS identity can be issued and the license agreement can be changed. If both are lost, then after contacting your partner your identity can be re-authenticated. Here we use license agreement contracts to ensure the user’s private key signature is legally valid. We wish that this action is able to be verified and effective in legal activities.
The above clauses are what we wish of the Decentralized Decision Maker. We have made some beneficial attempts, although it isn’t completely decentralized, but it may be an attempt at making smart contracts legally binding. We will invite lawyers to seek further legal help regarding this new method.
Attached Constitution and Rules of Procedure
The Decentralized Decision Maker proposes using a constitution to restrict actions within it.
- Abide by smart contracts.
- Acknowledge the effectiveness of non-procedural parts within a smart contract.
- Refer to the smart contract event log.
- The government is the initiator and executor of distributed decision-making projects and is responsible for the specific implementation of the project.
- The committee consists of all that hold voting power, or token voting rights. The unit of voting is counted in ballots.
- Topics are binary, with choices being: yes, no, or abstention.
- There are mandatory issues and non-essential issues.
- Mandatory issues are discussed monthly, and must include the topic of whether or not to liquidate.
- The topic of liquidation is the topic of whether to terminate the project. When over two-thirds of the committee vote in favor of liquidation, the project should be cancelled according to liquidation terms. Liquidation terms should be enforced by a smart contract.
- Topics pending discussion are chosen by the government, and given different priority status. All mandatory issues should be included. When topics pending discussion have been decided they should be published on the blockchain through log functions and labelled.
- There should be a monthly meeting to discuss all pending topics.
- Voting on topics is divided into absolute majority and simple majority. Apart from the topic of liquidation, the government can decide which majority to choose.
Welcome to BitRabbit Exchange, https://bitrabbit.com/
January 15th, 2018