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TinyShmancer

Welcome to (anon), a weekly round-up of spicy DAO-related news that even your ailing mother would enjoy.

After investing several long, painful decades and a few hundred thousand fathoms of blood, sweat and other fluids into this generation-defining newsletter, we at (anon) are thrilled to announce our recent giddy arrival at a considerable business milestone: the receipt of our first “view” from a real reader, which, if you can imagine, takes our unique user count to a balmy one a month—an improvement of literally infinite proportions over our previous milestone, zero, and a surefire winning sales pitch to advertisers.

To mark this seismic success we are launching a new feature, AGONY ANON, in which we will deign to answer any burning questions from our now considerable readership. As it happens, we have already received a question (!) submitted for just this very purpose; we will endeavor to answer it with the usual perspicacity and laconic wit so beloved of our avid reader (whom we promise has no relation whatsoever to this publication).

Here goes:

Agony Anon

Q: Dear (anon): On reading your most recent edition I was utterly enthralled by your newsletter’s perspicacity and laconic wit, and I have forwarded this issue to many of my “friends,” who promise they will open it at some point when they get a minute. I see great promise in this entrepreneurial venture and was wondering: Given your rarefied access to the DAO world and its myriad investors, developers and thinkfluencers, have you ever considered enlisting their help with a view to releasing some kind of cryptocurrency token that you can then sell to readers with some vague assurances about future profit resulting from the efforts of (anon)’s large, diverse and well-compensated staff?

A: No.

The Schmnewsletter

Proof of Inhumanity

“Proof of Humanity” proposes a theoretically great idea: build a vast registry of verified “humans” entitled to a monthly “universal basic income” called UBI—the kind of thing that many real-world governments have been mulling for a while. Central to its project is a rigorous vetting process in which token holders can challenge new entrants to the scheme and make sure they are who they say they are, using online photos, social media posts, etc. It’s a democratic, smart contract-enabled bulwark against blockchain benefit fraud, basically.

And yet the project has been mired in chaos, seemingly because of a deep rift between the founders—a blockchain project called Kleros—and a cohort of new participants. Early on, Kleros, which influences Proof of Humanity at arm’s length through a DAO, enlisted the help of Democracy Earth (DE), a company run by an influential Twitter developer named Santiago Siri. Kleros wanted DE’s token as the standard for UBI, and promised to allocate it hundreds of thousands of dollars from the DAO’s treasury; DE obliged. Soon, though, and inevitably, DE began maneuvering to influence the DAO by means of the modest power afforded to it by Kleros. Siri, for instance, began to use his influence to publicly brand himself as a founder of the protocol, assigned hostile admins to the official Telegram group, complained of overreach and undue restrictions on the protocol by Kleros, and attempted to pass a vote for a fork of the DAO that would dramatically diminish the vetting process—an attempt, Kleros argues, to offer the carrot of free money to a large group of Spanish holders (and Siri loyalists) whose support would allow a complete takeover of the Proof of Humanity protocol (and the destruction of the vetting process, its key technical innovation).

Without going further into the weeds, it’s a great example of the potential chaos of decentralized governance. Complex protocols coordinated through centralized “social layers” like Telegram are easily corrupted by run-of-the-mill politicking and the mass appeal of populist agitators, and the loose, informal nature of DAO communications makes it easy to feign, say, being a project’s founder or the release of official communications. Evidently partisan tweets from Kleros’s official account make it clear that the protocol’s communication channels are not run by anything approaching consensus —indeed Kleros acknowledges it doesn’t even know who’s behind them! The financial incentive only complicates things, too. It’s hard enough to keep order in any fractious community; when a massive cohort is influenced by the additional corrupting promise of free money, arguing for any kind of technical purity is going to be difficult.

Dune DAO Spiciness

A hearty ANON shout out(!) to Foldable Human and his endless thread, here:

https://twitter.com/FoldableHuman/status/1552460615914246144?s=20&t=khhMdNUqJvneuwdIuLklGA

Unrecouped Losses

A DAO called TRIBE DAO suffered an $80 million hack earlier this year. Pretty standard stuff, of course, but the kicker here is TRIBE was the result of a partnership between two distinctly centralized DeFi firms —Rari Capital and Fei Protocol, both of which appear to have sought to undermine an attempt to make victims of the hack whole.

It happened as a kind of covert and unannounced retrenchment of early promises. Soon after the hack, a proposal was lodged on TRIBE calling for full restitution of victims via funds the DAO had specially set aside for that purpose. The vote passed: so far, so good. Further efforts to move the process forward, however, mysteriously stalled, and a veto, apparently supported by execs at the companies who founded the DAO, was passed to retract the vote and redo it on some spurious premise (the voting was “confusing,” according to this useful thread.) A second vote that was apparently constructed to look like another vote in favor of restitution—but was in fact a vote to not compensate victims—then passed with a majority.

The victims will not be compensated and they’re rug-chewing mad! The general consensus on the farrago is that a few wealthy holders successfully conspired to tilt the vote in their favor under the guise of a free and fair vote, taking advantage of the relative anonymity of the voting process. “Decentralization” in this instance served only as useful cover for a fait accompli (I have no idea what fait accompli means) executed behind the scenes. Good, I say!

Thanks for tuning in—don’t forget to like, subscribe, follow and donate your net worth to my charity fund set up to democratically distribute by blockchain consensus all proceeds to my next disastrous drinking binge! Cheerio!

TinySchmancer

Send spicy DAO-related schmtips to: tinyschmancer@gmail.com

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