The importance of scalable governance — How social insects coordinate their collaboration around a shared goal — How anti-rivalrous goods helped facilitate human progress

Credit: North Carolina State University

Take a moment to realize (and hopefully, appreciate), where we are today as species — for the first time in all of mankind’s history we are a genuinely global, interconnected civilization. Our species have scaled from small, geographically confined self-organized tribes to nation-states and other complex formations, which in turn play actors in even more complex trade, economic, and geopolitical unions. How did we get here? One word — collaboration.



The social and cooperative nature of the Homo Sapiens played a vital role in the survival of our species (okay, okay — we know that Homo Sapiens pretty much wiped out all other members of the Homo family, but my focus is on what happened next ). Collaboration is an inherent part of our life, and a dominant driving force for innovation. Our combined collaborative efforts helped facilitate the rise (and sometimes, the subsequent fall) of nation-states, empires, unions, complex cooperative entities such as the United Nations and the International Space Station, so on and so forth.



In nature, cooperation has always been an organizational phenomenon. During the course of our evolution we have operated through a rather top-down organizational approach — we were organized in either a distinct tribe, carefully constructed hierarchy, or markets. As we increased in numbers and individual autonomy, our societies increased in complexity; thus the effective coordination of our collaborative efforts faced the inevitable challenges of scalability.



Scalability has become somewhat of a buzzword in recent years, especially within the software realm of where I dwell. Give you an example — for the past decade, or so the agile software development framework has been incorporated throughout all technology companies, regardless of size or industry. Why? Because it works better. Simple as that.

It turned out that these small, entrepreneurial groups (called agile teams), designed to stay close to customers to continually implement a constant feedback-loop, and adapt quickly to changing conditions, result in higher team productivity and morale, faster time to market, better quality, and lower risk than traditional approaches. Which is why large technology enterprises are looking for viable ways to scale these practices beyond team level and across their large organizations. This promoted the rise of various scaled frameworks such as the Scaled Agile Framework (SAFe), Large Scale Scrum (LeSS), and Disciplined Agile Delivery (DaD). While careful coordination of software and hardware innovations can help resolve these scalability issues, the one thing which remains a constant challenge is governance. Scale away folks, but lack of effective governance will result in nothing short of a crumbling tower of Babel.



The core challenge of effective governance at scale is how to govern complex systems without compromising autonomy, decentralized decision-making, and transparency. That’s what DAOstack solves, with a valid, authentic bottom-up approach.

DAOstack: The stack for deploying Decentralized Autonomous Organizations

As the hype around distributed-ledger technologies continues to rise, more and more people are looking forward to the rise and mass adoption of the first decentralized applications. The term DAO, as in Decentralized Autonomous Organization, is no longer a conceptual idea, but a technological reality.



In a nutshell, a DAO is an acentric form of scalable, self-organized cooperation operated by smart contracts on the blockchain. Or to quote the DAOstack whitepaper authors:

“DAOs are open, self-organized networks coordinated by crypto-economic incentives and self-executing code, cooperating around shared goals. Powered by the network effect, DAOs provide a revenue model and incentive for the production of open, shareable resources. With the creation of more open resources, the DAO will be able to scale indefinitely while keeping its agility and coherence, and in many cases outcompete existing corporate structures.”

What DAOstack is doing, apart from being the Wordpress for DAOs, goes beyond a bundle of protocols and APIs (although, I pay my respects to the teams behind these invaluable components). It’s an entirely new, bottom-up approach to solving the most complex challenges of decentralized scalability and governance. Its foundations (Ethereum, ArcHives, Arc, Arc.js, and Alchemy) are designed to create a balance between the ability to scale acentric decision-making processes while ensuring the resilience of the system. Meaning, you can scale the number of decisions of a collective over time, while ensuring those decisions remain incorruptible.



DAOstack solves the dilemma of decentralized decision-making at scale by creating a new, collective decision-making process called a holographic consensus, which enables small groups to make decisions on behalf of a more substantial majority in a way that guarantees perfect alignment and coherence.



Two significant ideas helped shape this consensus — the biological concept of stigmergy, and the concept of non-rivalrous goods, as a win-win incentive system of reward.

Stigmergic Collaboration: The Evolution of Group Work

Stigmergy derives from the Greek words στίγμα (stigma) meaning “mark or sign” and ἔργον (ergon) meaning “work or action.” Stigmergy is the universal coordination mechanism: a consensus mechanism of indirect coordination within an environment among agents or actions. While we don’t fully understand all the interactions of self-organizing organisms, the concept of self-organization is found all throughout the natural world. One of the examples from the DAOstack whitepaper talked about the human body as a decentralized cooperative structure:

“The human body is a decentralized structure made of organs, sub-organs and sub-sub-organs, all the way to the atomic cells, which themselves have their internal structure. The functionality of the body is pretty decentralized, and no cell instruct other cells what to do. Rather, each cell is autonomously operating according to inputs it receives from its environment. The sense of an organism — an autonomous and sentient human being, is an emergent phenomenon apparent only at the collective level.”

Social insects are another excellent example of stigmergic collaboration — take the synchronization of the group work of a typical ant colony. Thousands of individual ants are working towards a shared objective. How do they coordinate? By releasing pheromones — a chemical substance that triggers a social response in members of the same species. These “markers” ensure the function of multi-agent coordination mechanism which helps facilitate the common objective — e.g., the creation of an ant colony. Furthermore, if you poke into an ant colony (like I did as a child, out of sheer curiosity), the ants will immediately reorganize to rebuild the newly-inflicted damage. The pheromones facilitate the exchange of valuable information within a dynamic environment, which helps convey the information and trigger the response that some idiot just poked a hole into the colony and that hole needs to be fixed.



The essence of stigmergy is that traces left within an environment — the result of an action — stimulate the performance of future work. This combined positive and negative feedback loop enhances a mutual awareness, fostering the coordination of activity without the need for planning, control, and direct, face-to-face, communication (if I had a dollar for every meeting that could’ve been an email or message on Slack, I would’ve paid my mortgage).



Stigmergic collaboration has four distinct principles:

Collaboration depends upon communication, and communication is a network phenomenon;

Collaboration is inherently composed of two primary components — social negotiation and creative output — without either of which collaboration cannot take place;

Collaboration in small groups (roughly 2 to 25) relies upon social bargaining to evolve and guide its process and the creative output;

Collaboration in large groups (approximately 26 to n) is enabled by stigmergy.

Stigmergic collaboration occurs when individuals (or so-called agents) work without explicit knowledge of others. Adding a block to a blockchain isn’t controlled by a central function; it’s organic. Editing or changing a wiki page relies on a shared pool of content for mass collaboration and consumption. Stigmergic interactions are coordination of activities that, over time, use decentralized control. Specific rules guide the orchestration of the activity — there are no instructions, just a shared self-awareness for actions and the sharing of information.

Within the context of DAOstack, stigmergy is the natural phenomenon which defines the operation within any given DAO, as defined in the whitepaper:

A DAO is a centerless mesh network of agencies, which is also an agency in itself. There is no single point of control, or failure, in the organization. Instead of central management there is indirect coordination between agents, also known in biology as stigmergy, triggered by incentives and code. A DAO is a self-organizing entity, and at large better resembles an organism rather than an organization.

The topology of the DAO, offers three main modes of decentralization — assembly mode, fractal federal-governance mode, and complex mesh-network mode .

The assembly mode of a DAO

In an assembly mode of a DAO, a large number of agents are interacting in decision making within a single agency via its smart contract, assuming that reputation, and thus decision-making power, is fairly distributed. Despite being the simplest, this mode is inherently in tension with scalability and has a limit on its processing capacity, while maintaining resilience. We will introduce tricks to extend the process capability of this DAO mode as well, but by itself it cannot be the entire answer.

The fractal federal-governance mode of a DAO.

In the extreme fractal federal-governance mode of a DAO, the DAO is an agency with a a few agents, each of which is itself an agency with a few agents, each of which is itself an agency, and so on and so forth. In reality, the DAO would probably be somewhere in between those two modes, and well beyond, as a nested mesh network of agencies, interwoven with other DAOs through shared agencies:

The complex mesh-network mode of a DAO.

The complex DAO mesh network will naturally arise from its building blocks (agencies) with the infrastructure provided by the DAO stack. Power can be well distributed in a meritocratic way across the DAO in order to effectively utilize its collective wisdom and benefit the organization as a whole.

Rivalrous, non-rivalrous & anti-rivalrous goods & win-win crypto-economic incentives

A necessary clarification needs to be made about the differences in rivalrous, non-rivalrous, and anti-rivalrous goods:

Rivalrous goods: zero-sum, like the cakes at the office — a scarce resource, which I can’t share, because it’s too damn delicious and this is the last piece;

zero-sum, like the cakes at the office — a scarce resource, which I can’t share, because it’s too damn delicious and this is the last piece; Non-rivalrous goods: non-zero-sum, when I go to the movies with friends, we all watch the same film;

non-zero-sum, when I go to the movies with friends, we all watch the same film; Anti-rivalrous goods: the type of goods which usage increases the value, e.g., the more people use Linux, the better Linux becomes.

There are countless examples of the value of anti-rivalrous goods. Take language as an example — our pre-historic humanity gained a significant survival advantage in a rivalrous environment by spreading this anti-rivalrous innovation. The further building on spoken language enabled the emergence of written language, which helped preserve our collective historical heritage, and ultimately expanded into timeless (okay, mostly rivalrous at the time of this typing) goods such as books, and other knowledge-sharing mediums.



Anti-rivalrous goods such as language have also been utilized within a rivalrous environment. Take the economy of India as an example. India, as a former British colony, has adopted the English language within its culture to the point where it ranks second only behind the United States in English-language literacy. India entered the global market economy and ultimately benefited from this anti-rivalrous commodity by capitalizing on services such as customer support to the English-speaking world.



Another painfully familiar example of anti-rivalrous goods turned rivalrous commodities is open-source software. Throughout the history of the movement, people would use open-source code to create rivalrous goods, as Apple did. How do we make lemonade out of these lemons? How can we speak of decentralized, open cooperation and sharing of anti-rivalrous resources when our current economy is not compatible with such principles of operation.



Well, the economy is organic. Maybe not according to the Keynesian models, but as Hayek pointed out about Kayens — he actually knew very little about economics. The economy is us, it adapts to our models of organization.



This is where DAOstack introduces the model crypto-economic incentives designed to reward the sharing of reusable resources (or anti-rivalrous goods). At the end of the day, the more anti-rivalrous goods available, the better for the growth and efficiency of DAOs. As the white paper puts it:

“Open organizations are the means to shift from the current non-cooperative Nash equilibrium to a future cooperative state. However, DAOs will replace the existing corporate structures not because they are nicer or more moral, but rather simply since they will be far more effective.”

Give you an example with an existing DAO application currently in beta — Sapien. Sapien is a third-generation social news platform that gives users autonomy and control over their data and rewards content creators and curators. If you think of the world of social media, there are many players — Facebook, Twitter, Instagram — but only one winner. The platforms themselves — they control all user-generated data and content monetization. If you are like me — an active social media user, who engages in debates and loves sharing and creating content, you are on the losing end of the deal. While I don’t share information and generated knowledge for the money, given a chance to receive rewards for my contribution would actually incentivize me to craft higher quality content.

The core values of the Sapien ecosystem

The Sapien network is powered by the SPN token — it is the key to controlling your data on the network. Additionally, contributors are incentivized to create quality content by receiving rewards in SPN tokens, which would be used throughout the platform. This new approach to social platforms will revolutionize the social networking experience for users, publishers, merchants, and advertisers, all of which will extend benefits when transacting with SPN.



In a nutshell, what I believe the team behind DAOstack is attempting to do is create and nurture a soil from which a thriving ecosystem can emerge and create DAOs designed to tackle complex wicked problems. More about complex wicked problems, and a technical dive into the building blocks of the DAOstack — next time. Stay tuned.