Is Crypto Governance Dead? w/ Eugene Leventhal | Devconnect 2025
In this episode recorded at DevConnect in Buenos Aires, I sit down with Eugene Leventhal (researcher at Metagov, podcaster at Governance Futures, new head of governance at Octant) to discuss the current crisis in crypto governance. The general feeling is that governance has been declared dead, foundations are being pushed aside, and the decentralization theater is being abandoned now that Trump's election has lifted compliance pressure. Eugene unpacks what he calls the "original sin of DAOs" ...
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Transcript
The current version of society is on a downward spiral and it's not going in a great direction. And I'm not sure that more capitalism is the solution. And it was just decentralized is better. More people is better. Human centric is better. And I still agree with some of that, but I'm more nuanced with, well, decentralization in certain areas is better. And in certain areas, it's actually gonna hurt the collective more. And it's not a big group of people, but there are at least some projects in the space that genuinely seem to believe that decentralization of power is more sustainable in the long run. We're getting to the point where some of these centralized orgs are so big that they feel the pain from being that central.
This episode is sponsored by NIM, the world's most private VPN that protects your Internet traffic and metadata. Unlike traditional VPNs, NIM uses a decentralized mix net to scramble your Internet data, hiding who you're talking to, when, and how often. You can switch between full mix net mode for maximum anonymity or a faster VPN mode for everyday use. Pay in crypto or fiat, and even your payment stays anonymous thanks to z k powered anonymous credentials. Take back control of your online life at nim.com. Sign up today using the code blockchain socialist and get an extra month for free. Hi, everyone. My name is Josh Davila. This is The Blockchain Socialist, and somehow, once again, I am at Dev Connect, and I have been able to get my own set by booking this room. Thanks to Eugene, my guest here, actually letting me use some of his privileges for using it at the space at DevConnect in Argentina in Buenos Aires. But, yeah. So today I'm here with Eugene Leventhal. He is a researcher at Medigov and a fellow podcaster for governance futures. And, yeah. Today, I wanted to kind of talk a lot about governance since Eugene has been kind of on the forefront of thinking a lot about these things, the implications of crypto in governance, and, yeah. We can just get right into it. I mean, I think first to start off maybe for people who don't know what Medigov actually is. That's also just, you know, maybe to say I work for DAOSTAR as a freelancer as well on the side, which is a part of Medigov and
yeah. But what is Medigov maybe in total? Sure. Sure. Yeah. And just one small addition to the intro, I did just announce that I'm joining Octant as well. Oh, right. Which is exciting to get to do more on the governance and public good side. Yeah. Medigov is a governance research nonprofit. So we're an actual five zero one c three in The States, and the focus is on decentralized governance more broadly. If I'm remembering the tagline offhand, it's that we're a laboratory for digital governance and digital community. So mainly looking at digitally native communities, but it's not specific to any industry. Right. So It's not a specific crypto thing? Absolutely not. So Josh Tan, who founded it, he kind of got towards crypto as part of exploring the solutions towards potentially improving digital governance. But initially, when they were getting started, it was much more about creating an interop layer between all the different tooling that was available at that time and thinking about what are the new things that they need to build. So folks like Amy Chang out of University Washington with things like PolicyCraft and Nathan Schneider out of CU Boulder with the community rule and exit to community. I mean, so many projects. Friend of the podcast. Yeah. Friend of the pod. Yeah. Amazing guest and I love his episodes. And, you know, Seth Davis, Prima de Filippi, like so many amazing folks who were looking at decentralized governance in different ways. And one of my favorite examples actually Seth's work because I just thought this is such a fascinating way to observe governance in the wild. Right? Like, where do you actually go to see how humans are organizing? Why not study Minecraft servers? I thought that was such a cool way that especially as someone who came at it from a totally, like, more corporate and political governancy. And I just never thought of why not look at open source communities and just see how people are organizing. So, yeah, MetaGov was much more in that domain as as they started exploring kind of potential tech solutions. Josh got excited about DAOs, hence the evolution of DAO star and creating standards in that area, and that's kinda snowballed to some more and more activity, especially as like Prima and Nathan and some others also dabble in web three. Mhmm. So I would say web three is one of our components at MetaGo. You know, Josh is also pushing public AI and AI governance elements. Yeah. Liz Berry, who's the executive director, she has a tremendous background in deliberation and deliberative tooling outside of web three fully. You know, she's working with governments around the world. She used to be COO of the computational democracy project which managed polis. So she has an amazing background in that domain. So I really get so excited about and love Medigov because it's just such a wonderful place of just like true governance nerds who are insanely deep on the specifics, and there's just so much great information to learn. And I forgot, like, Zargum and all of his work too and Yeah. Yeah. Yeah. There's just so many cool people there doing great work. So Yeah. Yeah. I am but a small part of that and initially was focused on the granting side of things in Web three. So the governance and capital allocation specifically, but as I've gotten more into hands on working on governance previously at Scroll Foundation and now at Okton, I'm much more getting into the world of direct governance research.
Cool. Yeah. No. That's I think if you look through my episodes, you'll find a lot of people who have connections to MediCove actually and just the work that that they do is obviously very relevant with a lot of the, you know, topics that I like to explore in the podcast. But yeah. So I think talking specifically about maybe getting into to crypto just because we're here at DevConnect, we've been talking crypto the entire time. One of the things that I wanted to maybe get your takes on and and and insights into is kind of what kind of from a high level, I wanna get to the point of understanding what is the current state of governance in not even just in crypto, but, like, kind of in various places that are kinda related. We'll get there. But I think maybe first, I would be interested to learn from you or, like, hear your thoughts on where you were coming from and how initially, like, when you got into, I guess, the crypto space or thinking about governance, what were the things that
you were looking into that you were interested in and then we can kind of talk about how those things have changed over time. Okay. Okay. I'll just start with the first question very quickly and then I'll jump back to the journey and we'll come back to it. Just because there's a governance geeks hub here and I'm one of the organizers there and one of the things we have is a wall of post its of give your hot takes on governance. And it is very interesting to read already half a day into Dev Connect Yeah. With the resounding theme being governance is dead. So I that is the public sentiment amongst dev connect attendees at least to stop by the gov geeks hub. So let's pin that and then come back to it in a moment. Right. Right. So my general journey was very circuitous. So I went to business school, did finance undergrad, double majored in psychology. You know, I was born in the Former Soviet Union. My family immigrated to The States. So culturally raised kind of Russian, but in The States in New York, which is, you know, a very international place in its own right. Sure. But I'm mentioning this because as the child of Russian Jewish immigrant parents, you had three career options. It was either medicine, law, or finance and like everything else wasn't real. Kind of surprised that engineering didn't make make that list because that was a big deal there, but like everything else was either not understood by my parents or not relevant. So like startup culture or anything in that world was highly unknown until later. Mhmm. So for me, I was like, well, I don't wanna do more schooling. So law and medicine are out. So I guess I'm doing finance. And from day one, I did not like finance. I remember I had a business I did not know that you were a finance bro. Yeah. Right. Right. Right. On that note, I was in a finance ethics class in my business school. The one student in the finance school. That would be even better. I think you like this story though. But we were discussing, like, imagine that you are one of three water suppliers to this island nation. Natural disaster occurs. The other two suppliers are unable to supply water to the island. What do you do with your prices on water to the island? I was the only one in the class who argued that you drop them because they just experienced a natural disaster, you monster. And they were trying to describe, like, what do you do with monopolies? And blah blah blah. And I'm just looking around in the bar at how everyone's describing, like, hiking up the prices. Right. And my friend next to me is like, dude, why are you in business school? That that was when the seed started planting. I'm like, I don't know that I belong in this world, but I don't know what else I wanna do. So I guess I'm still doing finance because I can make money. Right. But I graduated in 2010. So all of the jobs that I thought I would get disappeared because financial crisis. So I went to work at a recruiting company, not exactly what I was planning for out of school. I joined them in a research capacity, which that's a weird thing. Recruiting companies don't always have research, but tremendously thankful to them. Options group my first employer and I was kind of just frustrated with life, wanted to change the scenery, spent most of my life in the New York area, convinced them to move me out to Hong Kong. Spent two and a half years out there, came back to do consulting. Seven years it took me to finally gather up the courage to be like, this really isn't mine. I need to jump. And when I moved back to New York in 2014, I slowly started doing, like, startup weekends and, like, dabbling in that culture that after a friend exposed me to it. And that kind of led me to eventually, actually from a former intern of mine at my last consult, my last kind of web two job. I guess the CMU was my last two job. My second to last web two job where he introduced me to Bitcoin that got me excited, went down that rabbit hole, worked on a DAO project to try to do crowdfunding on chain for communities where it would be targeting schools and nonprofits, but the governance of each community would be owned within that community. So, like, nonprofit government and the citizens of that community have governance rights Yeah. Over, like, a Indiegogo or a what is it? A Kickstarter for the nonprofits in your area. What was it called? Edge You Down. But anyway, so, like, started going down that rabbit hole. All my friends who worked on Edge Now with me, like, went into the space right away. You know, they were either already at consensus or decided to go. I'm generally a little more, like, conservative and cautious with that things to now to my financial chagrin of, like, not diving in head first at that point. But I wanted to go back to grad school. And I was like, hey. I have exposure to corporate governance from working in the corporate world for seven years. I've had the chance to get exposed to nonprofit governance because I was on the board of two nonprofits in the New York area. I started working on this web three decentralized governance thing. Where else can I learn? Like, where else is the major one? So I went to get a public policy degree. And so I felt like that would equip me with a very well rounded foundational view of governance in its different domains, and then I convinced the university to hire me for two years to help them build a blockchain research initiative and do a podcast on the impact of tech on society. And at that point, I already knew governance was my thing. But at that point, I'm like 31, 32 in a decade out of college with another grad degree. Right. But it I don't know. It it was even one of those things that I started recognizing of, like, hey. I keep wanting to spend my free time reading and learning about illicit markets while my actual fascination is the governance of it. Yeah. Right. Right. How do you, like, illegal cartels organize and, like, get inform so just I just realized that the human coordination and how people come together, set a goal, and create the processes and functions to work towards that goal, ideally without creating inequality in the process, like, that feels super exciting to me as kind of the main thing. And the secondary one is just feeling that the current version of society is on a downward spiral and it's not going in a great direction. And I'm not sure that more capitalism is the solution. Right? I'm not pretending that, oh, we just totally throw it out of the window, but I always found the arguments on the other side of, like, hyper pro capitalist as being disingenuous. Like, I'm not saying don't do capitalism. I'm just saying, like, add a flavor of caution or add some guardrails or do something. Sure. So those two kinda combined in seeing web three governance as the place where you can actually go experiment with democratic innovation and ideally export it out of web three to the rest of the world. Because who else has been, you know, now it's different. We'll touch on that. But who's been spending millions of dollars on playing around with governance primitives. Right? Yeah. Like, web three did seem unique in that. Yeah. And my spiel, especially when talking to non web three people was like, look, I know you probably think crypto is all a bunch of horseshit, but, like, that's fine. 99% of it is. But let me tell you about the 1% that's really cool. Right. Right. And that would, like, that would disarm people. Like, oh, great. You're not just shilling me or whatever. So I don't know. That long winded way of getting to, like, the human coordination, the personal level change around it, and how do we just create a more sustainable society.
Yeah. That's super interesting. I mean, at the time, what do you think was kind of like the impetus for people generally getting into governance and the excitement around DAOs? Like, I think let's I think it's it's good to maybe outline that because now we're a couple years away from that particular moment in time in 2022. I think it's probably around that year when everyone was getting into DAOs and everything was just chucking the word DAO after another word and saying that they're this decentralized group that's going to achieve x y z and Yeah. It's a totally new paradigm and we're gonna get rid of corporations or whatever. Yeah. I mean, for me, it was a really fascinating time because it was I felt like it was the first time where I saw kind of, like, live funnel of or, like, tunnel of people going from, like, kind of libertarian ish or, like, apolitical or just whatever, just into a kind of, like, what you can call as, like, a very, very vulgar, like, socialism or, like, collectivity that they didn't really Yeah. Fully understand. And then there were always people that were just, like, those are socialists. Yeah. And, you know, kinda, like, those are communism, basically, but it works. You know, there's the the amount of takes that I've heard from the Internet on these things kind of drove me mad as well. I can imagine. But, yeah, I guess I'm curious from your point of view. What what did you feel was like that moment in time? Why was it interesting? And how have we lost it? Yeah.
Yeah. I mean, I think about that a decent amount and it feels like right. So I got in kind of beginning of twenty sixteen and this is a few months before the DAO is happening. So should I give a quick recap? I feel like you've done some DAO. I feel like I remember hearing the DAO on your previous episodes. I mean, for sure it's been mentioned, but I mean, you can I mean, I'll do a thirty second recap? Want to. But basically, first major DAO effort, right, DAO decentralized autonomous org. First attempt at doing that as a VC fund effectively as a DAO on chain early twenty sixteen. If it it it raised, if I remember correctly, 15% of the Ethereum supply at the time. And what it went for three, four months before the exploit was found where someone was able to put money in a sub DAO, funneled roughly a third of the funds. Very simple, like, had they audited the contract by current standards, it would have been caught. They were more excited, whatever, not to comment on socket team at the time. Yeah. No need to get into that. But that got me super excited. Because at first, I remember hearing fear Your money getting stolen?
I love it.
No. Sorry for the lack of clarity there. No. The DAO itself. Like, I don't care about VC or whatever. That's not I mean, it's left financially. Sure. Sure. But just like, woah. A $150,000,000 just came up from randos on the Internet and we are coordinating to do a thing. That's kinda wild. Right? The only things close to that felt like Kickstarter campaigns. Right? Like Right. Oh, I wanna launch a new video game. I just got a bunch of people supporting me, but then you don't have any involvement with the thing you just funded at most to get it and try it and whatever. So this was like, woah. This adds another loop to that dimension. Mhmm. If if I'm not mistaken, this was also around the time that equity crowdfunding was becoming legal. So there were just general changes in how the masses can get involved in certain small reference. So to me, it felt like a much cooler version of that where it's like, sure. I wanna be part of a crowdfunded thing, I guess, but, like, how can I be involved? How do I get to be part of the decision making? And so I feel like it was that decentralized ethos. Right? Then it was to me, it felt the most ideological, where it's like we want cypherpunk values. Like, we're hearkening back to the pre modern Internet era of the ideals of, like, the Homebrew Internet Club and PBS servers, and at least parts of it were like that. Right? As I've gone deeper into it and looking back, I'm like, oh, there were also, like, white nationalists using Bitcoin to slowly build up those communities and, like, all kinds of other stuff. Right? There were huge libertarian commute. There were a lot of flavors that I was ignoring. But at that point, at least the ideological corner that matched my ideology, and I will fairly call it that because it wasn't as robust, detailed, and researched at that point to know what works, what doesn't. It was just decentralized is better. More people is better. Human centric is better. And I still agree with some of that, but I'm more nuanced with well, decentralization in certain areas is better. And in certain areas, it's actually gonna hurt the collective more. And you need to just understand, like, what problem are you solving and how does it help you solve it. Yeah. So it felt like 2016 till, let's call it, COVID Mhmm. Was those who cared about governance were, in a very fun way, were very ideological. But and I remember going to a bunch of crypto events and that went on being like, hey. Can I talk to you about governance? They're like, dude, that's my seventh order problem. Right. Consensus and scaling and this technical thing and that technical thing. Yeah. I was like, okay. Like, who can I go jam on governance with, especially at the bigger orgs? And it was just never serious, unfortunately. Yeah. Then as you were alluding to, DeFi summer started building up. And then post DeFi summer, which I think was 2021, in '22, all of those DeFi protocols had massive treasuries. Yeah. And all of a sudden, it's like, so we have, like, $500,000,000 that our community needs to manage.
Right. Right. Right.
What do we do now? And so that's when I felt like the Dallas became a little slow. AirDrop was like a big moment, I think. Yes. Yeah. And yeah. The UniSwap and there was a sushi swap and then the pancake swap and then all the swaps and the swap season. But that felt like it was changing, but potentially in a good way. I was very hopeful at that point because more groups were just getting into it. And, like, they were not saying that governance is my seventh problem. Governance is now a top three problem. Right. So that actually got me excited. Looking back on it though, in my opinion, what was done wrong then and what I now call as the original sin of DAOs is that that was purely done for regulatory reasons. Right. Right? And, like, they might the people launching those DAOs might not have realized it at the time. Right. I don't know that they would have put those words on it back then, but I do remember, and this is on a podcast, I'll call it out, that Eric Voorhees was on Epicenter talking about, like, shape shift in their transition to a DAO. Yeah. And he straight up said, I'm doing this so the SCC can't come after me. Yeah. And to me, I I even remember. I sent that around a bunch of people. I'm like, I bet you this is when the SCC starts, like, screwing us all over right now Mhmm. Just because they spit in his he spit in their face. But then it was kinda quiet for a while. Like, there were some things, but it it didn't become as big of a thing as I was concerned about. However, this year showed its true colors. Mhmm. Right? An administration change in The US. Right? Weekend one of Trump season, it's Trump court. Right. So he just came right out the gate swinging and just pretty much saying directly, like, don't worry about it. I'm launching a shit coin. You can do it. However you want. Crime season is here, people. Right? And, like, I remember flying to DevCon was the night of the election and I, like, I was so sad. Oh, yeah. Yeah. I was not happy with the results. And I just get in talking to so many people at DevCon. They're like, dude, what are you worried about? Like, don't let some people get screwed over. Make your money, dude. Yeah. It's just like, you guys are monsters. I don't anyway, so they're like, that was its own jarring moment of the reality of some political opinions of people around me. And it's okay to have different opinions, but it's like that's a little too aggressive for me. And so now, like, this year has been mostly pulling back. So it's either saying that I can throw governance out the window. I'm launching. I don't even need to consider governance. That feels like the extreme of the of the trend. Mhmm. Next will be Foundation Labs merger of some kind. Like, Eigen didn't officially merge, but they're kinda moving it back under. I think Morpho had their Foundation by their Labs entity out if I remember correctly. You know, we just saw like the unification post which has its own implications about labs and foundation getting closer. Yeah. And I remember, I feel like the a 16 z end of the foundation era article is very emblematic of this. Mhmm. And that they pretty much put that out as, hey. We don't need to pretend anymore. Yeah. And if we're invested in you, we're gonna make sure that your whole team read this and hears this and stops wasting their money Right. And goes into founder mode more quickly. And so right? Like, look at every a 16 back project. Yeah. They're scaling back on governance. Even some big ones that are, like, real deep in governance. Yeah. It feels a little weird right now. Like, I wish I could bring this back to all the people who are, like,
trying to tell me that a 16 z was, like, funding socialism or something through through the creation of these doubts. But maybe, like, an important context, maybe from I'm sure Nate would love hearing that. Maybe from important context for maybe people who don't realize that, like, a lot of crypto projects and so do the big ones that receive a lot of funding. The usual playbook was to create, You have a for profit company and the found a foundation, which is nonprofit, I guess, usually based in The Cayman or something like that. First, I think it was Swiss, then now most of them are Cayman, some BBIs. There's a couple of other regions where they've got Yeah. A lot there. If you like what I'm doing here, consider supporting the show on Patreon. Your contributions help me keep doing this work and dive deeper into the politics of decentralized technologies. I promise you absolutely zero financial returns, no airdrops, and your investment may go to zero. But you will get good content. Check out patreon.com/ the blockchainsocialist to support the show. Yeah. And so then, I think there is I mean, there was, like, you know, the for profit is worried about the building of the protocol and the foundation is worried about the governance of the treasury that the DAO holds, their DAO or, like, some sort of governance body holds, which is, like, usually as a kind of post, I guess, post TGE or token generation event, post, like, having a token, having the foundation to manage it then also protects you from regulatory risk from the SEC saying that the token is a piece of equity or whatever else. And I think, you know, we had this in the lead up to Trump, you know, that all this, like, EAC, like, effective accelerationist, like, kind of stuff on the Internet of people being really, really into among many things, the hardcore libertarianism, deregulation. There should be nothing stopping you from building as much AI or crypto, whatever you want. The technology does not need to be monitored by the state at all as a way to reach some sort of singularity event or something like that, whatever. And then also Marc Andreessen, head of Andreessen Horowitz, like, making it very clear his political position and thoughts on accelerationism. I think the paper was called Accelerationism,
whether it's on acceleration or It was a big manifesto. Accelerationist
yeah. Or EAC manifesto. Something like that. Something like that. Anyways, Yeah. So I think like and of course, they were also big supporters of Trump coming into the White House. And so now we're at a it's interesting now. Yeah. In the lead up to that, the amount of people who are just like, our bags, like our bags are going up, like, and we are a year into it and everyone's bags are suffering. Like, the tokens are down across the board generally at the moment. I mean, depends on where they're going. Yeah. Yeah. Maybe it's just this particular week, but Everyone's too busy being here. Maybe. Yeah. I'm too busy to buy right now. But and then there's, like, maybe a lot more context in there about the actual experience of being in a DAO for a lot of people being disappointing. Yes. So, I mean, just, like, lots of, you know, companies that would have an airdrop, but their investors would hold a significant portion of them and having a token governance model where one token is one vote, then, of course, investors are gonna get what they want or they're going like, there's no point as, like, a individual to really engage in voting and, like, trying to make a change because in reality, if a six and z owns, you know, 40% of the tokens or however much it is then, like, they're going to decide the outcome of the vote. Yeah. But then, I think there's, like, a few other things. I don't know if you want to mention, like like, how did we get to what were the the pain points throughout the way that got us to this point where everyone is everyone's putting on the post it notes how much they dislike governance.
Yeah. Yeah. I mean, it feels like high school accelerated in a hyper financialized way. Right? It feels like the worst version of humans coming together a lot of the time where you show up in an org. No one's telling you what to do, where to go, what's the mission. You have no clarity on function purpose, etcetera. You have, like, a vague sense of we're affiliated with that labs entity in the protocol. Then you try to talk to people. You wanna partake in voting. You have to go buy your own delegation, which means you're probably small unless you're very wealthy, which is perfectly fine theoretically. Right? In more liquid democracy esque things, it's like, oh, you have a penny's worth. That's enough to have your voice heard. Right? Like, you don't need to be investing whatever amount to actually clear a bar of importance. In reality, whether it's delegated or one token, one vote systems, they become popularity contests where even if officially the governance is happening on the forum into a snapshot into an on chain vote. In reality, it's a lot of backdoor deals. It's a lot of, oh, we're at DevConnect. Let's the 10 biggest delegates go out for dinner and discuss the thing that no one's gonna get to hear about, but then we all vote yay or nay. And everyone's like, why did that happen while no one else heard about the context? So Right. They feel like they're highly pluriocratic. A lot of them feel captured by a small amount of people. If you actually on that note, if you look at the and I just saw Anti Captures updated, what's it called, tool. I love the views that they're showing now. I I'm so excited. So, like, plugging Anti Capture, they're amazing from the LockFull team. You can literally see in at least the DAOs they've covered so far, like, for DAO x, how many of the top voters have to vote to ClearCore? Right? So, like, you could see that there are How easy is it for top voters? Might have four people that can clear quorum. Right. Right. That's bonkers if your goal is to be decentralized. Yeah. Right? So I feel like there's this general shift of everyone shouldn't vote on everything, which I fully agree with. Like, that's one of my things. It's just like, why did we have to fail and learn that the hard way? We could have just looked at the rest of the world. Right? So I am not a technical person. No one should ever ask my opinion and to be the final decision maker on a protocol upgrade. I don't know. I, like, I I can tell you what I think. Yeah. I can also tell you what I think about a lot of stuff. That doesn't mean I know what I'm talking about. So it makes sense to orient around specialization. Right? You know, like, if you are a CS PhD with relevant knowledge, yeah, sure. Like, I would love to hear your opinion. If you've been spending the last thirty years developing no matter what your educational background is, yeah, I wanna hear because you have relevant experience. You've been building it. It's not just about pedigree. I also don't wanna make it that kind of thing. But whether, like, you had to showcase that you are able to interact with that information in a meaningful way. Sure. And depending on the risk of letting a wider set of people interact, right, security councils, things like that where it's like, hey, emergency protocol. How do we deal with, like, this thing's going on fire? Sure. You want a small group of highly specialized people with a lot of authority to move quickly, but they are held accountable by the community. Like, I I like those kind of models. So we started seeing optimistic governance come up in some way. I guess it's kind of optimistic governance. See, but, like, small group makes a decision, larger group can potentially veto or at least hold it accountable. So now we're just starting to pull from org design theory, right, of just, like, how do you make effective organizations? And for me, the big thing that Web three still has to offer is, a, transparent finances. Like, that is still a big deal. For me, it's just not the exciting thing, which is, like, why I don't get animated by DeFi. But for transparency and accountability, it is very important. As a quick side note, when we did EdgeDAO, like, our actual eventual vision was getting the Department of Education on a blockchain based ledger. Right? Like, I wanna know where every penny of the deal goes. Yeah. Not to gut it like the current administration is gutting it, but to say, we can get you cheaper computers. We can get you cheaper pencils. We can run that at a like, let your citizens help you do better at what you're accomplishing. Right? Like those kind of systems make sense where you don't say of like, hey, you, Joe the plumber, go redesign our education system. But it's saying like Joe the plumber might have a friend who owns a computer store who can better source computers, who can like just get you get the school where his kids are going a better price for the computers. Right? So, like, there are ways that you could engage your community and citizenry to just have better prosocial outcomes. So I feel like I've tangented enough that I forgot where the original was. So I'm gonna take a pause and let you be orient.
No. I mean, look. I think in general, I think the the point that here I'm trying to share with people at, you know, reminding ourselves of how we got to this point in the in the space where there was a moment where everyone was very optimistic about governance. I think there's a big thirst for it. I think in part, we just have been living in maybe some decades of institutional rot. Yeah. People were hungry for something else. Yep. We tried it. Part of the problem why it wasn't successful in my view was the I mean, yeah, just overpowering influence of venture capital on how, like, using capital as governance ended up, like, making the experience great for people who had a lot of capital. And if you didn't, it wasn't that great. Yeah. There are plenty of caveats or, like, you know, organizations that had something that were different that weren't like that, but they were the minority. They were the weird ones, you know, the odd ones out in the group of ones that are continuing like, still today, I mean, yeah, I was gonna say that, like, a lot of the biggest DAOs are basically DeFi related DAOs, but also now, I mean, I still need to, like, fully understand this recent thing with Uniswap. Foundation. Yeah. The Unifords. So, like, they're they're turn like, these big organizations that are now just, like, getting rid of their foundation, are do they have a DAO anymore? It's kind of like, I think it's a little bit up in the air at the moment. Yep. I think we're all leaning towards like probably not. It seems like they I think what we've kinda shown is that governance was for those who own the companies was a bother. It was something that they didn't like. They didn't really want to do, and therefore, now that the regulations have been I mean, the political situation has changed in The US to where it's okay. You don't have to pretend anymore.
Now they're not pretending. Not at all. At worst in the past, they were pretending. Yeah. And everyone was getting frustrated by it because you say one thing but you do another. Yeah. And so I guess to come back maybe even to reference that a 16 z article on the end of the foundation area, I reread it recently after my own beginning of fun employment a couple of weeks or a month ago. And rereading it, I actually saw it in a new light because I remember the first time I saw it at the start of the year. I'm like, oh, this is some, you know, like, justification for gutting DAOs and whatever. But now I actually think about it more and I'm like, well, labs foundation split don't always make sense in how they run. Like, there are some foundations that actually act like long term ecosystem stewards. Mhmm. And I think that makes more sense than just, like, a thing to be the DAO space. Like, your labs can be the short term focused entity on growth, immediate deployment, etcetera, etcetera. Like, things we hit this quarter, next quarter, and foundation could be how are we not burning down our project or the world ten years from now and, like, let those two entities keep meeting, and it's okay if they're at odds sometimes. But then, like, you should have them funded by this. And, like, there there are things that just weren't making sense in how it's run. Mhmm. But even just hearing the way you were mentioning it, I feel like part of the core issue with most DAOs is that they don't have a purpose. Right. Right? Like, what is Uniswap DAOs' purpose? What is Optimism DAOs' purpose? What is ScrollDAO's purpose? What is x DAOs' purpose? Right. Right. Right. To help the thing? The community. Right. It's for community. The community. Right. But then why not just have a community effort? So I think that's where that article feels like it's throwing out the baby with the bathwater to use that wonderful metaphor is that, hey, We tried introducing like, we know startups can do a thing. We added two new entity types to startups that have no clear purpose, and that kind of failed. So let's just go back to startups. It's like a a way of crudely summarizing. Right. Right. Where it's like, sure. But how about you give one of those a purpose Right. And see if it works. And I'm forgetting where I got this quote, but I I was hearing someone who does a lot of research on open source communities give a talk. And they said that, hey, what what we actually see it was something when I was going down like the exit to community rabbit hole. Mhmm. And it was that well, when do you actually see exit to communities happen effectively? It's not in the early days because, like, initially, a lot of open source movements actually did need a benevolent dictator to get it from nothing to something. And then once it's something, once it finds its product market fit, then you can really aggressively broaden the scope of governance and be like, the thing works. We know what it works for. Now I want the community to run it because I don't deserve not deserve. It's not in the best interest of the tech or the community for me to be the only one running this. Mhmm. So, like, a lot of open source tech projects have followed that trajectory. And it was it felt kind of insightful for me because a lot of the startups don't have product market fit. They don't know what they're doing as a startup yet. Yeah. And they're introducing these other stakeholders supposedly with equal or similar waiting without clarity of purpose of what does one do and the other not do and vice versa. And then everyone's like, well, I don't know. I guess it's not working. It's just a weird confused hodgepodge outside of labs. Mhmm. But yeah. Because you did a weird new thing that you didn't think through in detail that you started for all the wrong reasons that you didn't actually invest in any of the interesting experimentation in. Yeah. So for me now, like, looking forward, you know, there are a couple of exciting things to me. One, I know we were speaking about before was that, like, the surprise that some large international organizations, whether it's corporates or NGOs, etcetera, you know, they're not coming at it in the 2017 way of I just want an article just because the buzz, but they're actually like, no. No. No. Like, we have some core engagement Yeah. User ownership problem or co op style problem, and we think this connect something around here can potentially be part of the solution. But and they're saying potentially. You know, like, even the conversation we were having that we we can't directly allude to the name, but but with a gentleman from a large NGO where he was like, oh, well, in the first version, if you don't need a blockchain, like, I I don't care. Just if you can help us solve the problem, that would be great. Right. And like, that's a healthier attitude. Right? Already of like, I'm not a hammer running around looking for nails. Right. So that's one element. And the other side of it is I do think there are it's not a big group of people, but there are at least some projects in the space that genuinely seem to believe that decentralization of power is more sustainable in the long run, and they admit that they don't know how to do that, but they wanna keep working on it. Mhmm. That to me feels wonderfully genuine and honest. Right. I don't think any of us really know how to solve this problem alone. The only way we're gonna get there is if we coordinate and experiment and share more of that knowledge amongst the people who care. Mhmm. And yeah. And just, like, see where that goes. And for me right now, I keep bringing up the sense of urgency and even, you know, like yesterday was the dove day, the research day, and I kinda opened and closed it with the sense of urgency. But I'm just sharing my own personal view that I'm worried that at this event two years from now, if DAOs and governance don't lead to business ROI or some kind of return on investment or some kind of monetary view, which I already hate that that's the way I'm thinking relative to where I started. But the reality is no major treasury will justify spending energy on governance. Right. Like, we still have some. If in two years we make no progress, that might be too long of a window. But I'm just putting this arbitrary. In two years, no progress, no DAOs are doing anything interesting governance wise besides the small, like, the meta DAOs, the, like, the small community run groups. Mhmm. You know, like, Red Chain Co. Like, there are a bunch of amazing communities, but, you know, like, is BlackRock or the US government gonna be influenced by that? Right? Yeah. Might they be by a $100,000,000,000 treasury? More likely. Right? Again, I don't like that those are the realities, but I'm just more aware of what it takes to make certain forms of change happen. Yeah. And I'm really trying to also square away my own, like, morals, ethics, personal desires where I'm just, like, why can't we just be happy in a co opie, more chill world? But, like, most people, I guess, aren't thinking that way. So how do we square that with that reality? And the fact that, you know, like, I live in Washington DC in The States and, like, I love America. My family immigrated there. We are all tremendously thankful that we are there and not in The Soviet Union or Russia. But at the same time, I don't exactly love that there's national guard walking around my street. I don't love the direction where my country is headed. And especially because my family and I see this exactly oppositely. Where my family views this as, like, strong man doing good things. Oh, wow. And I'm trying to tell them, like, do you not see that's literally our like, we have centuries of that. It doesn't end well. Right. Yeah. Like, how do you not have the writing on the wall for this? Like, we're Russian Jews. We get this story. How are you for this? And, like, it constantly blows my mind. Yeah. But, like, we came here well, not here. We're in Argentina. We came to The states illegally. They are anti immigration aggressively. Wow. Right? Like all these things that I'm like, how are you squaring this away? So, like, on just so many personal levels right now, it feels that, like, we have to aggressively innovate with, like, deliberation, with better tooling, view governance's product. Just try more stuff and see what actually works towards which outcome. And as soon as we can start exporting these understandings to local governments, to nonprofits, to activist communities, to co ops, to even the corporates and large governments, I think that we can create a counterforce to the current rise of centralization and authoritarianism that we're seeing in different ways.
Yeah. I mean, I think you're touching on something that I think is part of this particular I mean, I think in the past couple of years, cultural moments of, like yeah. It's almost like the fake failure of DAOs, but fake in the sense of, like, we were never doing it right in the first place, has been used as a way to basically completely justify authoritarianism within the context of, like, in the business world or, like, in our industry as well and that I mean, now everyone is just like by removing the foundation, it is just accepting the Andreessen Horowitz kind of like ideology of like, no. No. We just need we need the we need a few people to go founder mode. Just listen to them. They're the ones that are going to, you know, lead us into greatness and that's about it. And that's, like, totally parallel or, like, there's a matching with that and, like, authoritarian government. I mean, like, traditional corporation is in many way it's an oligarchy or it's a it's a plutocracy. It's a it's a dictatorship. It can it's whatever it is, it's not democratic. Mhmm. You can look at the alternative is the cooperative world. It's cooperatives. I mean, my organization, Bread Cooperative, we didn't call it BreadDAO because to me, there was still just like DAO doesn't didn't mean anything, but cooperatives had a real tradition and, like, meant something that we could emulate versus the DAO was just too much of a nebulous thing that I think people just imbued the things that they wanted it to be rather than looking at the reality of what it actually was and also just the history of more horizontal ways of governing Yeah. Economic bodies. Yeah. I mean I am
and push back on this because this isn't a well thought out thought, but this just came up as you said that I don't know that I agree that I view corporations as authoritarian y full stop. I see the essence of, like, why did corporates become a thing in the sixteen hundreds to take more risk. Now we can unpack why is that risk, who is taking that risk. So it's more of like the legal protection to take risk. And colonialism. That was the and that was in a harrowing time. It's like colonialism, the exportation of religion, export like, dom a lot of other negative traits. But the essence it's set like, if we rewrite history and make people be less asshole y at that time, they still might wanna do the corporation thing even if they have positive outcomes that they want wherever they landed. Mhmm. Of course, it's not the reality we live in. And I do agree that most corporates are run as authoritarian. I guess just this is just relates to a conversation I was having last night where I'm, like, debating with someone like, if we're starting a certain type of consulting cooperative, does it literally need to be a co op to start, especially if it's national and it has, like, some logistically challenging questions? Sure. First, just start as an LLC and put it in the bylaws and put a co op ideology in the bylaws. I mean, that's what we do. Yeah. Yeah. Right. So that's where I'm like, well, the the entity type isn't the problem. It's what we've done with it. That, like, we've mostly led to hyper consolidation, multinationals capture the full vertical integration, and, like, these things which then tend us there. But just like an LLC in its existence or an s corp, and these are, like, American specific, but, like, corporate filing structures. And this is a thing I I struggle with personally. So like again, please push back on this. But I don't think the existence of the legal thing is the problem. I think it's the limit of accountability on the thing that allows more illegal money law and like, again, I love researching illicit markets so that we can really get into the governance of illicit capital. Studying, guys. You know, like, I literally have shelves of book on, like, illegal money movement, drug markets. It's a very weird I don't know about weird or not, but fascination. And like, yeah, The US is the biggest hypocrite and biggest culprit here because like with I didn't even realize until a few books I read, like, Nevada and I think it's South Dakota are like some of the hotbeds for questionable corporate filings. Nice. Where like a lot of really, really like the groups that would be doing Panama paper type stuff filing ten years ago, going through La Fonseca and all those questionable orgs, if it's starting from butchering the name, they now have Nevada LLCs and stuff like that. Right. Right. And it's wild how we've both implied FATCA, which I'm forgetting what the acronym stands for, but it's like the thing with which America polices global banking. Yeah. And we've also made these wild exceptions that like lets all the criminals just come to us. It is insane in that sense. Sure. Yeah. It's not necessarily about the legal structure per se, but it's social reproduction of, like, capital accumulation and like what that kind of leads to and how that pushes the boundaries of maybe what was legally intended and this this, you know, back and forth between state and capital of what you can and and can't do to some degree.
But I'm just thinking of it more in I don't know if I can articulate this incredibly well, but, like, I think the rise of the second rise of Trump, I mean, even in the first rise of Trump and the, like, increasing interest and fascination with, like, the dark enlightenment, I think is, like, very entwined together in a in both in interest like, both in a real way and a very dumb way. Mhmm. Although we're also at this moment where, like, the right seems to be imploding in The US, but that's something else. But I think there is Everything seems to be imploding in The US. It's borderline impressive. Yeah. Just to say that, like, in the crypto space in particular, it's an interesting instantiation of everyone, like or not everyone, but just a lot of people, I feel like, having this darkly enlightened moment of like, oh, actually, groups are bad. Mhmm. You know? And they and kind of like this this flip flop. Yeah. Yeah. Like, there's plenty of people I've seen flip flop tremendously around, you know, being interested in DAOs and now
whatever. They're just doing the kind of traditional startup playbook. Yeah. What is it? I'm forgetting like the more popular business seats and be like or not business seat, but like, is it the dictator CEO or something along those lines that like that's the vibe right now. Right? Yeah. Yeah. Yeah. Full founder mode, one person making all the decisions. That's how it's best to do anything
including our government. Right? Right. Exactly. Yeah. Yeah. Yeah. The only things that work are the, like, giant tech companies in America type of thinking. Yeah. And I always also love
remembering or seeing the stats of, like, what portion of the American and global economy they are. Mhmm. And it's like they're not even driving the majority of, you know, like tax payments, low jobs for people. Like, they're not actually the cornerstone of the American economy, and yet they're talked about as the only thing that works. Even though they're like, I think sub 5% of the economy if I'm remembering correctly, but I might be wrong on that stat. Maybe like in terms of employment, but In terms of, like, that number specifically if I remember is their collective revenue as a portion of full American GDP. Oh, wow. Okay. Yeah. I think so, like, revenue not market cap because market cap because market cap is mostly distorted. Yeah. Yeah. Yeah. Okay. Because now there's, like, what, multiple trillion,
like Yeah. What is it? Musk's payout assumes that he will get a trillion dollars if he hits an 8,000,000,000,000 valuation. I mean, this is I think that's a very particular I mean, Elon Musk's entire trajectory is a particular instantiation of kind of like dark enlightened thinking. Yep.
Yeah. And now, especially like, what's his name? Peter Thiel and all of his antichrist stuff, which is taking the whole other Look at the fucking mirror, brother. It's yeah. It is it is wild. Reveal recently did I don't know if you ever listen to Reveal. It's a investigative reporting podcast. I would say it's phenomenal investigative reporting, but they did a report on connections between, like, Peter Thiel tech world y people, this conservative movement that's, like, highly aligning with them and, like, pretty much trying to get at, where did this come from? Like, how is this guy talking about the antichrist after getting Trump in office now? Like, what's happening here? And it it just shared a lot of details that like I have been very blind to. So that was a if you're into that kind of thing, I highly suggest reveal. It's I think it was about two months ago, highly illuminating. Yeah. But it's really shocking some of like the background connections that are happening. And especially because when the progenitor of all of those movements, whether it's like that specific thing that led to Peter Thiel and now his antichristiness or like Trump or like a lot of these things that we're seeing. Yeah. You know, like look at Barry Goldwater in the sixties. That guy was considered a fringe candidate. And like he him on steroids is Trump now. And like these elements that like the problems aren't new just post World War two heading into Vietnam, they were aggressively pushed back on in certain ways. And I don't wanna pretend America was perfect in that time because civil rights, the reaction to it, everything else, prison incarceration system, etcetera. But at least we were pushing back on like those fringe ideologies. And then Tea Party happened once Obama came and social media came and then it went off to crazy land in my opinion.
Yeah. I mean, Tea Party was very active where I grew up. Yeah. Yeah. Yeah. A lot of, like, very old people in their lawn chairs, like A lot of ceremonies like a suburban field telling like get government out of my health care or whatever. The nindies. Yeah. Well, all this to say though at the same time, so like not to be totally pessimistic. It does seem to be pretty interesting what I what you kind of like were saying earlier is that a lot of people in the crypto space that were doing all the innovation or trying to do the innovation in the in the crypto space have now kind of soured on it tremendously, not in the sense that in the sense that also Soured on governance. Soured on governance, but also the money soured on governance. I think also, like, back then, you could get funding very easily by starting a DAO. No problem. And now, like, VCs are completely uninterested in that type of thing. Like, you know, friends with benefits would never happen right now, for example. Or at least they would, but it'd be like a tiny community with no money. It would be way different for sure. But at the same time, we're seeing an increase in institutional interest in kind of findings in experimentations and governance that kind of crypto was the place where it kind of originated into some degree or like, yeah, they're interested in using the tools now. Yeah. Now that the the kind of regulatory pressure seems to be releasing and that's, you know, a double edged sword because that's coming with Trump. But
yeah. Yeah. I mean, on the one hand, I think the nature of that kind of large scale org being more open to web three is different depending on the thing we're talking about. Right? Like, say for DeFi. Right? Like, we see BlackRock and all these major orgs Yeah. Jumping in. Robinhood granted they're not, you know, like as long standing, but like them making the arbitrum deal, etcetera. You know, for anyone that's deep iMaxi, like, I don't know. It feels like almost as good as it gets. You're getting old money on new rails, like, and and you're the one building at AK. K. You're the new billionaires. Right? So, like, it seems like a lovely journey for them. I never cared about DeFi. I wanted to refinance, put it on a blockchain. It doesn't get me, like, I don't know. For me, that's not the exciting part. But, like, when I personally justify government or how I stay in web three, it's governance and I don't do anything for z k, but, like, I'm just happy that all the z k stuff exists because privacy and, like, governance are the two things that I think Yeah. Even if blockchains prove to all be, like, a dumb distraction for twenty years, I think those whatever we accomplish there will be positive exports. Right. Right. But yeah. I don't know. So, like, once we go beyond there, I mean, like, say some of the grant innovation lab work that we've been doing at Mediga, like, super cool to see traditional funders wanna come hang out with us and talk with us and be like, are you actually using new mechanisms? If yes, we wanna learn about it. Yeah. Like one of the Flashpods founders is actually a program manager at ARIA, which is The UK's version of DARPA, which these are both, you know, like government military oriented massive tech funders, which whole baggage to unpack there. But nonetheless, like, whatever you think of DARPA and the American military, it goes to a complex. If you like the Internet, if you like most of the modern tech that you have, you have to at least say thank you to DARPA because it came from their dollars. And, like, again, from a governance perspective, you look at DARPA, and it's like that and Bell Labs are like the the darlings of Yeah. Like technological innovation. Right. Like the money is complicated, but the actual humans that were involved and, like, interview people who are in the midst of, like, ARPANET and all these things. So, like, with the scientific funding agencies or with any, like, just older funders, like, they are open to better mechanisms, better accountability, better impact measurement. Mhmm. Those are great things. Like, sure, we might have very different opinions about where the money comes from this and that. I think all groups should care more about if I spend money, I wanna be able to hold them accountable and people hold me accountable for that spending. I wanna know did anything happen from that money and how did it impact the world on a ten year scale. So, like, that seems good. You know, like the NGO example we were giving, that's more in the direction of, are there DAO elements we could add to, like, donor management and engagement? Yeah. Yeah. Yeah. Theoretically, what is a DAO but a thousand people co owning the end to a thing? Like, if you have large corporates funding into a communal funding pool for nonprofits, like, don't the employees of those orgs wanna potentially partake? Like, how can you activate that? Yeah. So, like, that feels like a really exciting direction as well. And I feel like that one resonates with my new role at Octant because it's all about, you know, the sustainability of Ethereum public goods. And, like, Web two has not solved public good funding. So public good funding is a problem full stop. You know, we can look at, like, commons in Switzerland or, like, some specific examples, but especially in the digital realm, like, I'm unaware of that many clear cut examples of truly sustainable funding that isn't just effectively an endowment or a long term commitment of, hey, I'm loaded. I'm gonna give you money indefinitely. So, like, that's its own domain of excitement. And I think it was who said this yesterday? I think it was the same gentleman from the NGO that we were just catching up with before. I think he mentioned that governance day yesterday, something to the effect of, you you know, we're getting to the point where some of these centralized orgs are so big that they feel the pain from being that centralized. They don't wanna be that centralized. Whether it's and it let's take more and say like the government non profit domain. Those are such highly bureaucratic systems that you can, I guess, argue of where centralized or decentralized in like a robust bureaucracy? Yeah. But I mean, it it is high pretty centralized. Like at each point, you need a specific person to keep moving it up a chain and, like, an unfortunately long chain of command. So, like, they're feeling the pains, and they wanna pull more people around them that are involved in their missions to be like, how do we empower you to have your voice heard, to have you to have more impact, and help us know where to go? So, like, this is also not new. I remember when I was in business school looking at example, like, you know, undergrad business school almost twenty years ago studying examples of like GlaxoSmithKline, you know, not exactly the beacon of charity or whatever, but, like, they just produce home and consumer goods. And they're like, we're a 100 to two 100 to 200,000 person company. We just need to hear from our employees to build better products. I'm like, how do we crowdsource intelligence? You know, do the collective intelligence exercises to be able to come up with better product ideas? Right. And, like, citizen science has some elements there of, like, how do we get ideas from the collective to let them bubble up, and then whoever is able to is able to go execute thing. Mhmm. So I think there there are examples where we see the benefits of open source. And actually, Ray from Open Source Observer, I feel like gave one of the better arguments I've heard in a while, which is just like listing the stats of how much of the current Internet is open source and how much of the global economy is reliant on open source technology. So I don't know. To me, when especially when you hear it that way, it's like, oh, if a capitalist hears that, why don't they wanna support open source? Right. Like it's literally saying, do you want more money person who loves money? Support this thing and you get more money. I mean, there is kind of like I mean, it's also like I think you made that argument for taxes as well.
Thank you so much for coming on at DevConnect. Last thing I want to show, I've been working we've been doing some public webinars from Red Cooperative where we're starting to share some of our findings and how we govern some of our assets together. We did our most recent webinar was on how to use multi signature wallets for democratic organizations. So we gave a little bit of a demo on how we manage our funds democratically as a cooperative tailored and meant for nonprofits and NGOs. Also, there's a a guide book as well. It says on YouTube and got PDF which I'll link to in the show notes. But, yeah. Anything else you wanna say?
Yeah. I guess like a concluding thought would be I I realized a lot of what we just said can leave people feeling with more existential dread than less. Personally, where I'm looking towards for grounded optimism around this is the idea of we are actually at a point in time where we have had more tools for improving democracy than ever before. Yeah. We just don't know where they best fit and how to best use them yet. So whether you are in web three, whether you are not in web three, deliberative tooling is a bucket that I am trying to much more aggressively shoehorn into DAOs given that's the domain that I'm working in and to just like speed run-in that collaboration with other DAOs that care. Let's understand what we mean by governance. What is being governed? What is the process? And then what are the tools and processes along each step of the way to make it possible? So I I'm really excited in that, like, deliberative tooling direction, and the majority of work happening there is still very much outside of Web three. But I'll quickly plug, like, Agora Citizens Network has one awesome project in that direction in Web three. Cool. Well, thanks, Eugene. Thank you for having me. Brother. Cool.