a16z: Web3 Experimentation Roadmap

Author: Andrew Hall, Eliza Oak Source: a16zcrypto Translation: Shan Ouba, Golden Finance

As we have argued, Web3 governance can serve as a laboratory for democracy, just as online markets allow economists to conduct experiments or social networks provide a wealth of data for network research. Our Optimism study is a specific analysis of a particular topic in constitutional design research. But there are many fundamental problems that we can study using similar opportunities in web3. Here are some ideas. For each topic, we summarize the questions and provide some specific questions that projects have begun to explore.

1. Understanding Voter Turnout

A common problem with DAOs is low voter turnout, and there are many reasons why this happens and many reasons why projects care about this problem (summarized here). A major obstacle to mobilizing voters in decentralized governance is the inability to contact voters directly, but there is a lot of room for designing ways to contact voters directly through user interfaces or applications. Drawing on the extensive literature on voting techniques in political science, potential experiments in web3 could investigate whether different mechanisms that have been documented to increase voter turnout offline (e.g., appeals to civic duty, social pressure, reduced cognitive effort, self-interest, etc.) also explain political behavior in online settings.  

• What motivates voters to participate in elections?  

• XMTP and Snapshot are working with Coinbase Wallet, Converse, and other applications to send messages to addresses about upcoming proposals.  

• Uniswap, Optimism, and others have developed user interfaces that make voting and delegation more convenient

2. Empower good governance actors

Currently, most web3 projects use a “one coin, one vote” model (i.e., voting power is directly based on token wealth) to vote on project decisions. These tokens are all transferable, that is, they can be bought and sold on the open market. Empirical evidence shows that this can lead to a plutocracy where a small number of wealthy actors wield a disproportionate amount of influence. For projects with civic rather than purely economic motivations, this has sparked interest in going beyond token voting, for example, through non-transferable reputation, which aims to incorporate merit and contribution into the accumulation of governance influence. Efforts to collect signals about who is trustworthy or who is competent are old, but only recently, with advances in technology, have attempts to create trustworthy and universally usable reputation systems at scale become feasible.  

• In political representation, how do we reward merit and contribution rather than wealth and connections?  

• Multiple projects are experimenting with Ethereum Proof of Stake (EAS) to base governance rights on earned reputation rather than token wealth.   

3. Designing Strong Institutions

In designing political institutions, web3 projects have tried both traditional and novel approaches and confronted many of the classic problems that political scientists have studied for centuries. The rapid iteration of designs combined with large amounts of public, granular data about collective outcomes provides interesting opportunities for research. For example, some projects are exploring how to give the public the ability to check the power of oligarchs through veto procedures. The veto has a long history as a governance tool — from the Plebeian courts of ancient Rome to constitutional monarchies requiring royal consent — though opportunities to study the impact of such institutions are fairly limited. In addition to institutionalizing vetoes, web3 projects are experimenting with judicial systems, legislative structures, federalism, or various mediating institutions. When is a veto useful for governance? Why? Lido is currently experimenting with designing a governance veto system. Is bicameralism a more efficient way to design a legislature? Optimism is currently experimenting with a bicameral governance structure.

• DriftDAO is experimenting with a three-part governance system.

4. Improving Political Representation

Currently, most web3 representatives are elected based on token wealth or ecosystem status. This has prompted experimentation with other, more democratic ways to elect representatives, such as improving how representative candidate messaging reaches voters and ways to hold representatives accountable. There are also efforts to explore “lottery” methods, such as randomly selecting users to discuss specific topics at citizen assemblies.  

• Is representative democracy more effective than direct democracy — when and why?  

• Over time, many projects have moved from direct democracy to representative democracy.

• When and how to use deliberative democracy?  

• The Cosmos Hub recently piloted a Citizens Assembly to resolve controversial community decisions.

5. Tracking the Strategic Behavior of Political Actors

With publicly available timestamped voting data in web3, we have the opportunity to study how strategic agents anticipate the behavior of others to maximize their own payoffs, which can lead to voting herd behavior or other free-riding behaviors based on backward induction. A peculiar kind of strategic voting has been documented in the US Senate, and it would be interesting to study whether this mechanism works in an online voting setting. Furthermore, with the availability of information on people’s financial assets, we can assess whether different economic motivations and conflicts of interest lead to different types of political behavior. DAOs and web3 governance provide a laboratory for social scientists to understand the role that various constitutional features play in shaping human behavior in democratic governance. We are excited about this unexplored, data-rich area, and hope that researchers and builders will connect about potential collaborations to study governance and democracy at scale.