The evolution of Polkadot's political economy

Assessing the emergent evolution of Polkadot’s political economy

Polkadot’s first decentralised governance system was pretty interesting at the time: a tri-cameral (three-chamber) structure with a technocratic committee managing upgrade timelines, an approval-voted, elected executive “government” to manage parameters, admin and spending proposals as well as a general voting system for everything else which rewarded long-term stakeholders with increased influence. - Gov2, Polkadot’s Next Generation of Decentralised Governance

The original political design philosophy of Polkadot’s on-chain governance system was a tricameral system, inspired by parliamentary democracy, with three key chambers created to moderate and direct the development of the network.

With the arrival of Gov2/OpenGov, this explicit tri-party system has been removed - however when we dig deeper, we can see that it is maybe more accurate to say that the system has been devolved.

The tricameral system of V1 of Polkadot still exists - but it is less explicit, but no less relevant and understanding this new (crypto) political context - namely where influence is moving and to what ends, is worthy of investigation and discussion when we consider the long term incentives within an expanding, interoperable and cooperative ecosystem.

As has been seen in the challenges faced in Edgeware’s ‘blocked’ council where disagreement was based not on what to fund, but how to fund, and then in the recent ‘governance attack’ on Mangata, it is imperative for new teams and old, to spend time not just understanding the technical aspects of the political systems, but also discussing and pre-empting the second order effects caused by launch strategies, token distributions and even use-cases, as in the wild, they are all subject to the emergent qualities of these interoperable sovereign social networks.

As stated here, on-chain governance matched to XCM opens up whole new avenues of opportunity - and peril.

How are things changing, how are things staying the same?

It is pretty to easy to see how the the Technical Committee has devolved into The Fellowship - a “rules-based ranked-membership organisation” launched on the collectives system parachain that will recommend upgrades for the network and become the technical hivemind of the protocol.

The Fellowship can be seen as a political collective in that it has an on-chain voice controlled purely by its members according to some algorithm. It can also be seen as an incentivisation mechanism to help induct and retain expertise and talent important for the network. Finally, it can be seen as a vessel to help guide and support the personal development and maximise every individual’s potential to contribute.

However The Fellowship is not just a techncial initiative, it is far more complex and nuanced as it represents a fascinating attempt to create foundations for persisting a collective culture, political ideology and set of philosophical principles.

The rank of Master indicates a move into the upper three ranks of the Fellowship and with it a refocusing from the predominantly technical qualities surrounding invention, design, architecture and development into the more philosophic,strategic, socio-political and sophist qualities associated with good leadership.

So what about the second group in the previous three party system? Where has the council gone?

The council was voted in based on holders nominating those they believed would operate in their best interests. By delegating your votes to an account, you essentially vested your decision-making power in an address (an on-chain individual or organisation) who you trust, and whose decisions you would be happy to follow.

Initial council nominations across the ecosystem were also a proxy for founding teams who could generally direct enough stake towards filling these positions of power. Over time, many councils have evolved somewhat, but in general they tend to remain the product of initial distributions. It is interesting to consider that since these blockchains are in practice emergent social systems, the initial members, may not turn out to be the best qualified.

Time and time again, technology designed for some express purpose, has been remade or accidentally reimagined in the wild by its users - its worth remembering that both Facebook and YouTube were both initially conceived as dating apps. As the saying goes:

man plans, god laughs

With OpenGov, and no hard-wired council able to operate with network super-powers, this same system takes on renewed significance, in a new form.

Now there is not just one council - the hope is there will be many, each one presenting some emergent proposition to the network, each politiking holders for their votes, each, aiming to establish their own vested governance authority - namely, the ability to make decisions on behalf of others with some internally evolved governance structures, social etiquette and shared culture.

The Fellowship is intended to be only the first of its kind. Should the concept (probably after
some iteration) become proven effective, we might reasonably expect more instances of expertise-based orgnaisation “fellowships” for other disciplines not covered by the present Fellowship.

Given the influence these on-chain organisations may wield. it is highly likely that they will become the outward facing ‘representatives’ of the protocol - in fact in the relatively near future, a comparitively small number of people may engage directly with the protocol, with most contributing directly to these on-chain collectives, who in turn, deal directly with the underlying system.

Within the Fellowship whitepaper for example, the awarding of Dans (upgrading of reputation) will happen at specific events and it seems intuitive that media, editorial and educational materials may also end up emerging around this core concentration of protocolistas.

At least once per year the members of the Fellowship should gather. This should be paid for by the treasury. Lower gradings (I-III Dan) should happen here (though I and II Dan may happen remotely).

These on-chain entities are the foundations of an emergent network service economy that bridges on and off-chain worlds, a parallel experiment to our current nation state economies, that may in time teach us much - about what does, and doesn’t work, with that knowledge and proof enabling on-chain collectives to exert political will and agency back in the real world.

These councils will not be based on the relay. They are hosted on Polkadot’s collectives system parachain - with Kusama sharing this capabilty via bridged communication. The movement of relay functionality from the security protocol and into parachains, is another fundamental move within the tricameral devolution.

We can now clearly see that relays and parachains are both core to the governance of the overall system - and in turn, that on-chain collectives represent a third party in a supra-protocol organisational political economy.

Tension in the system

As first noted in The State of Dotsama, there exists an economic - and therefore a social tension between the crowdloan model for onboarding parachains with their own independent economic model that are generally backed by venture capital and the (d)evolving tricameral system of onchain collectives and system chains that aim to expand and advance the core functions of the polkadot protocol - namely the system that is contained definitively within the confines of on-chain state and by proxy the associated governance.

The first waves of crowdloans and auctions generated marketing hype which in turn drove demand for slots and so pumped up the price and the relative value of Polkadot’s security model, demonstrating the value of a shared security umbrella, whilst also covering up many sins.

With the recent popping of the crypto bubble and economic reality setting in for parachain teams big and small, it is is an interesting time to be asking just how co-operative this new political economy really is?

If we accept that the tricameral system is alive and well, and mediating the system from new vantage points, we can also begin to question whether this system is evolving into a security oriented technocracy, or a productive network economy - where people not only have voice in the system, but are also central to the value creation, and narrative development of the network, rather than just contributors.

In essence, Polkadot’s future rests squarely on its ability to nurture and sustain real economic activity, creating work not just for developers, communicators and politicans but for skilled labour across every possible dimension of society.

Why is this important?

It is worth stating that with relays, parachains and on-chain collectives, we are building within the emerging architecture of something entirely new in blockchain land.

Polkadot is not Ethereum, nor is it Cosmos - its design is so radically different, that to compare is to entirely miss the potential contained within the social system.

However it is not perfect, and recognising the continued existence of a triparty political economy can give us pause to consider whether the underlying economic system aligns to this emerging design.

For the network to fulfill its true potential we need to expand our horizons beyond crowdloans, to a model that seeks more powerful incentive alignment between the relay, the parachain and the on-chain organisation.

We believe ParaNotes that are currently in discussion with Kusama, are a path to realising that innate potential - and the foundation for enabling more balanced and sustainable economic growth in a truly cooperative network economy that can allow us to rethink many of crypto’s current orthodox concepts to better align people, politics and power over the long(est) term.

If we are to imagine new (network) publics, then their populations need to be representative of the real economies we aim to impact and to change. We should not consider our potential users based on their relative understanding of the arcane and opaque language of the crypto industry, but on their ability to understand what employment feels like.

If we are to succeed, then adoption will come through projects that operate in much the same way as they do today - by paying real people, with real skills, to do real work, that you can see, touch, feel and benefit from day to day in the most mundane, but profound ways possible.

This is in many ways a very dull way to look at the transformational potential of crypto - it does not require the marketing of a metaverse, nor the escape to some perpetual play to earn game world whilst public services and resources are degraded, it simply requires us to consider how the technology we possess may help us to rethink a new kind of (network) public service - from energy, to transport, health and civil duties.

If we can do so, then we can address all of the issues facing the ecosystem and crypto in general - namely creating sustainable and scalable alternatives to real needs in society - if we can do that, then all of the biggest worries of the ecosystem… awareness, adoption and value accrual will look after themselves.

I’ll note this need to audit runtime upgrade code is potentially addressed by this RFP (under review) - if it is able to be implemented in Substrate…

There may be features, related to this use case, that should be added to this RFP?

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Thanks for sharing.

I’m not really familiar with the testing process you’re proposing but I get the gist.

The quote you reference (that I’d referenced) touches on a really meaty topic, but doesn’t really dig into the depth of the challenge - especially wrt the messier side of things since governance (decision making) is token weighted and socially derived so the attack surface - if we can call it that, is vast.

This is generally why there is movement towards governance delegation and on-chain orgs such as The Fellowship, whose decision making, policy and structures are not dictated by token weighted governance.