3/11/2024
One World Government DAC
If we have smart contracts.
If we have reliable data.
If we want to have dividends and other business structures.
Why don’t we just decentralise and auto…
… that’s what I was going to say.
2013 is the year cited as when the concept of DACs was spurred into this side of existence. Early imagineers of the DEX, Dan Larimer published “Creating a Fiat/Bitcoin Exchange without Fiat Deposits” and a couple of months later espoused Decentralised Autonomous Corporation
Dan was working with Stan Larimer and Charles Hoskinson at the time, their output would create one of the first DEXs, BitShares. Stan would go onto other ventures, now at GetTangi, Dan would establish EOS and Charles went to work with Ethereum.
Vitalik was quick to write about DACs in Bitcoin Magazine after Dan uttered the phrase, providing a three-parter:
Many years ago, there was this fella called Solon and he is an amazing character. He was a successful merchant, great diplomat but what I find more remarkable is his brief stint as Archon of Athens. He repealed the strict and harsh Draconian Laws, he cancelled the predatory loans that was stripping the poorer citizens of their land, and he installed extensive reformations to alleviate the class tension.
He inscribed the laws into wooden tablets and this was for all to see, not just the elites – laws previously were only known to the top, how convenient. Despite having it all, he then stood down from his position.
This provided a foundation to Athenian law. This did have its ups and downs as people vied for power and the good old days of enslaving the lower classes but Athens did go on to have a golden age. Solon was most likely the first person to eliminate birth as the sole basis for holding government office.
The point I am getting to is Athens did not have the benefit of blockchain, he only had stone and wood to carve into. Blockchain can help against corruption, this is invaluable to organisations and corporations. Solon left and squabbling began but with code you can install an incorruptible protocol, Bitcoin is a perfect example – there will only ever be 21 million tokens.
The protocol designed for a DAC that keeps the business in check. Buterin makes the point for monopolies, if a monopoly cannot be held in check by market forces, what will?
Stan Larimer has the 3 laws of DACs:
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Integrity: A DAC must always obey its own published business rules.
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Incorruptibility: A DAC must never change its rules without consent of its stakeholders, except where such change would conflict with the First Law.
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Self-preservation: A DAC must protect its own existence, as long as such protection does not conflict with the first two laws.
He goes further to recognise the qualities of the DAC:
They are corporations – They are, and of a right ought to be, free and independent persons.
They are autonomous – once up to speed; they no longer need (or heed) their creators.
They are distributed – there are no central points of control or failure that can be attacked.
They are transparent – their books and business rules are auditable by all.
They are confidential – customer information is securely (and incorruptibly) protected.
They are trustworthy – because no interaction with them depends on trust.
They are fiduciaries – acting solely in their customers’ and shareholders’ interests.
They are self-regulating – they obey their own rules like, well, robots.
They are incorruptible – no one can exercise seductive or coercive influence over them.
They are sovereign – over their digital resources. They don’t need governments to exist.
The door that Bitcoin opened is quite astonishing, then Ethereum became the first platform for widely successful smart contracts allow the idea of DACs and DAOs come into being.
11 years on from Dan first thoughts on the DAC, Metis is helping to scale Ethereum and has always led with the idea of tokenising business since the beginning, after all co-founder Kevin Liu was wanting a way to tokenise businesses when he met fellow co-founder Elena Sinelnikova.
The Bitcoin economy encourages hoarding and now we have Michael Saylor stacking sats and encouraging everyone to do so. Ming Guo, Chief Scientist of Metis, sees decentralisation as a efficient way forward for companies as it can provide more equitable value. We can provide more data on-chain, we can quantify activity and that means work that previously would not be recognised can receive reward.
DACs provide a method of understanding and incentivising contribution. It is a positive-sum game, centralised systems have exploited individuals, just look at Web2 businesses and how they harvest data without giving us any percentage of its worth.
In the token economy, with a DAC, participants can agree on a shared consensus and through contributing to it the DAC gains strength and participants are rewarded. DACs can be remarkably efficient for business operations and that is a core drive for a lot of finance, health care, businesses to adopt blockchain – it makes admin work.
Supply chains have a lot of intermediaries because commodities need checking, paper work needs to be analysed, and lost ID and misplaced authorisation can take weeks to fix. However, blockchains and DACs can cut out a lot of the fuss and cost meaning goods will be cheaper as we do not need the intermediaries that provide a 5% increase.
With the business world, they operate in government realms, they need to stick to the law. Forms of ID will need to be present but people will not want to have all their information to be out in the open. ZK-proofs are common in blockchain to help shield vulnerable data whilst still utilising it to ensure validity.
Metis incubated ZKM, Ming has a background with MIPS-architecture and he along with his team are put zkMIPS to use. This will help bring privacy and interoperability to Metis. Lets say you are in supply chain management, this genius use of zkMIPS can help secure supply-chains, secure identity, secure the necessary information that needs privacy.
This can help voting, payrolls, internal-decision making. Furthermore, it can help with high volume transactions thus reducing the fees it would cost otherwise to operate. ZK-proofs can be expensive on computation but MIPS is not, which is why it is a brilliant idea that ZKM is bringing zmMIPS to Web3.
There is still some way to go for mass DAC adoption. Asset managers are gradually coming onto chain, insurance companies will utilise DLT and as the large funds and utilities become automated, the DAC economy will blossom. More businesses will come into the Web3 world, Millennials, Gen-Z and subsequent generations will have Web3 lives, seamlessly engaging with Web3 protocols. Those that adopt DAC structures early have great benefit.
People debate, converse and they can organise themselves into providing a robust DAC for their needs. Metis is providing the scaling, and soon the privacy and security for this new world.
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