Criticisms of the DGF project

This page collects arguments against the goals and the implementation of the DAO Governance Framework project and their responses.

The goal of the DGF project is to make a general system for building DAOs. Given the obvious historical failures of crypto projects, and especially the potential for larger, more dangerous failures in the future, we wish to make the many valid criticisms of the project paramount, in the hopes that designers will be conscious of as many pitfalls as is possible. And to make a list of improvements Web3 needs before it can give any serious options for contemporary business.

General Criticisms

Fundamental Criticisms

• Law of Unintended Consequences
• Chesterton's Fence
• Criticisms of government

Over-financialization

Financializing every human behavior degrades the fundamental human impulse to help without expectation of reward. Under this system, everything is tied to a measured value, then accounted for and rewarded according to whatever system is currently in place, even though that system is necessarily flawed. It eliminates the possibility of selflessness, self-sacrifice, for your community.

Answer: It doesn't need to. If this tool is used to help us ignore the trivial accounting, by automating it, we can focus on higher-level concerns. Though this tool needs to be constantly sharpened--re-evaluated, improved, questioned.

Downsides of meritocracy

Meritocracy without cultivating gratitude and humility is corrosive over time. Though we want somewhat of a class structure for efficiency, we don't want the gap to be large enough for the the top and bottom to dissociate. This is built in computationally with hyper-inflationary reputation, but this must also be managed emotionally.

Downsides to transparency

• Threat to privacy
• ...

Downsides of globalism

• Threat to local community
• Inevitability of oppression
• Global-level mechanisms are existential threats

Technical Criticisms

• Blockchain tech is bad
• Bitcoin is well into it's second decade and it is still not useful.

Answer: Bitcoin started as an anonymous post. It is now worth $500 B with no official developers. It has little coordination encouraging outside developers to contribute. It will be slow.

DGF is not Bitcoin. We owe a lot to the first proof of concept of a protocol that holds monetary value while being decentralized in its function. However, we intend to do many things completely differently. The slow development of Bitcoin will not be the same issue on a platform that encourages participation with fair rewards and focuses on governance.

• Environment
  • Bitcoin's PoW uses the amount of energy of Czechoslovakia. That energy is entirely wasted, except for the minor benefit of decentralized consensus of a mostly useless currency. Redundancy of decentralized systems is orders of magnitude less efficient than centralized databases, independent of PoW.
• Slower than centralized databases
• More expensive
• Scalability sacrifices security
• Centralized interfaces with blockchain are unregulated and untrustworthy (e.g., Mount Gox, FTX)
• It's not decentralized: Almost all dApps use either Infura or Alchemy
• Bitcoin is impractical
  • It has half of all crypto market cap, but it's not practical. After 14 years of operation it's still too volatile, too slow, and has no fraud protection. It's not useful for any merchant transaction, much less a major transaction.
• P2P tech is for criminals
  • File sharing is theft: e.g., music and movies
  • Bitcoin has only ever been practically used for money laundering, internet drug sales, and sex trafficking in the last 14 years.

DGF Criticisms

Problems with the goals

• Digital reputation schemes are dystopian nightmares.
  

Similar schemes to quantify reputation include the CCP's Social Credit System (SCS). Watch the Black Mirror episode on reputation scores to get a sense of what visionaries fear from a successful REP token.

Answer: The primary problems with previous digital reputation schemes have been that the systems are opaque and centrality controlled by a monopolistic power which gives a binary judgement of each human based on a single index (the reputation score), and the tools may become so dominant that participation is required to function in society.

In DGF, we recognize the power of such a system as well as the long-term negative consequences of such a system to society. Such fears are precisely why we are building DGF, since we believe it is important to build a system which counters all of those qualities. We wish to build a decentralized organizational system that serves its members better and is more powerful than any centralized social credit system.

Most importantly, DGF DAOs are owned by the people who use them--the entire goal is to allow decentralized control of organizations. This allows users to control their personal data to the maximum degree, while ZK proofs allow users to share data for the benefit of the network, without revealing personal details. DGF is built to encourage open participation, so people can join or leave at will. The P2P software is built to allow decentralized control of the algorithm, which requires transparency for all protocols used. The public-key cryptography is at the heart of the architecture to ensure the privacy of every transaction. The governance structures are designed to encourage weighted democracies instead of top-down authoritarian systems. Finally, the point of making a framework for DAOs is to encourage the proliferation of competing and cooperating DAOs with many domains instead of a single DAO with a single type of REP token.

• Monopolies

If it is successful, one dApp will likely dominate the others. Competition and Economies of scale will lead to monopolies and no higher global level of regulation is strong enough to resist.

Answer: Open source design and digital architecture allows anyone to clone the whole structure within minutes. Competition will allow local versions to give alternatives. People will have the freedom to choose which platform serves their values best.

Counter answer: That ignores the first mover advantage from the network effect. The larger network is irresistible.

Counter counter-answer: Putting your energies into a smaller network that is younger and more appropriate for your talents and outcomes is exactly the first mover advantage. It's true that individuals get more power by joining a large network, but they get diminishing founder benefits when joining an older network.

SGF Criticisms

• Greater communication between scientists can lead to bad outcomes. Science needs independent validations of a theory to prevent bias. So a platform where they can communicate immediately, without careful consideration beforehand can ultimately harm science. Kevin Zollman, e.g., in discussing the social epistemology of science argues that before a scientist's colleagues' results are validated, the scientist being aware of their claims is likely to prejudice the scientist. Related is how scientific results have a statistical problem, that many measurements historical record converge to the most accurate current result from a biased direction (e.g., because the scientists are probably self-censoring themselves, and not reporting results that are too far at variance with the other results).