Afterglow: Transformation - Top-Down style

Next: Fusion Economy

After going through the main ideas, its time to wrap up with a few additional notes.

The transformation towards a decentralised world is already well under way. In general organic development tends to create best results and certainly we have assumed it and posts here have been written on that premise.

But could public side have a role in transformation to a decentralised, resilient future and what could that be?

Somewhat naive ideas perhaps (why would politicians work to give power back to people) but let’s give it a spin.

Top-Down Approach

Many governments have programs to invest into new innovations. Different governance models and the decentralised community concepts with scaled-down technology clearly are innovations that could fall under such programs.

This could be tested by setting up experimental communities from volunteers that use the latest and greatest technologies in order to be as self-sufficient as possible with different governance models.

There are two main alternatives – to focus on governance models or on verticals (different communities focusing in separate areas of expertise).

In the first model attention is on finding good decision-making models and the top-of the line technologies are more to attract volunteers. Such attractions could be for example medical innovations to radically extend life span or health in general or robotic flow labs that can synthesise any chemical compound.

Then you set up a fleet of experiments with volunteer human ‘guinea pigs’ using different decision-making models to see how they turn out. Such communities could be

• One that takes existing laws of the nation without any changes and focuses on latest tech testing. ‘Reference model’. Each community would be a self-governing municipality.

• One with own community currency/public utility token and a some general mechanism for reward allocation is used (TechRank, percentage of revenue). Open municipality concept with voting for proposals is used for governance. ‘Central’.

• One with every service having separate tokens with decentralised exchanges doing changes. Here every service is free to select own decision and reward policy. People can choose what service they use or can start own competing service with a different model. ‘Market’. In realistic terms this might require too many volunteers and two much funding to work.

• One where people like to thorough discuss every issue before committing to anything – Dialog or ‘best advertisement agency wins’ model.

• One where people just want all public services to be automated, not to bother and just focus on living own life. Citizen’s Automation Budget concept is used to select what aspects to automate. Close to reference model concept. ‘Automation’ or “Don’t Call Us, We’ll Call You”.

• One where people want to try out all kinds of models - even counterintuitive – to see if they work for short periods and make small adjustments to them all the time using Kanban or similar. ‘Evolution’.

• One where proposals need to be simulated and proven in theory to have no corner cases that break it. ‘Simulation’. Simulators are improved after each failure.

• One that tests the vulnerability of the other teams and lives off the bugs bounties. ‘Pirate Bay’. This is crucial element because trials do not have same kind of stakes as real world where true tangible value is traded. So possible bad actors would be foolish to reveal any vulnerabilities during trial period. The system needs to bring its own diseases in order to stay healthy.

Or they could be based on technology testing. Idea here is that each community is composed of domain experts that test the new thingies and further develop and give feedback. For example, one community could consist of teachers who produce training materials and gain reward when other teams use it. Focus is more on how communities with specialists integrate with each other and how they trade with each other.

• One focusing on producing medicines and health services. (Health)

• One focusing on new and content creation (Media)

• One for education and training (Education)

• Another focusing on energy production (Power)

• Another on food production, restaurants and bars (Eat)

• Another focusing on carbon capture and bio-crude distillation (Air Refineries)

• Another focusing on chemical industries (Chemicals)

• Another focusing on physical product manufacturing (Factory)

• And everyone’s favourite - the Pirate Bay

This top-down approach helps local industries evolve when products are live tested and evolved based on direct customer feedback.

For society it act as an experiment to look into various ways of reducing systemic risk from too much dependency on centralised solutions that are based on fragile global networks and large nations turning adversial and weaponising their production capacity.

This is a concept where centralised power hierarchy invest into testing models that make it obsolete but also make the nation much stronger against external shocks.

The proposed trial model is an example of so called top-down decentralisation. It can certainly accelerate the development of technology partners, provide references and if the trial communities are selected from already existing communities, has a fair chance of success as a test bed for organisational models.

Clearly t this would require company participation (the open source design alternatives for physical stuff mostly does not exist today). To get commercial entities to participate, they need a vision of how this might turn into profitable business for them. There are a few generic questions that any company is about to have when they think of participating to any group effort:

• Lead time. How long does it take for potential customers to make their decisions for any new solutions emerging? Would it take them months or years for them to get accustomed to these new ideas?

• Does participating into this kind of exercise lead to continuous business? How replicable results this would turn out?

• What would be the average size of business? Small deals involving any kind of customisation are pure pain.

• Quality. How to ensure in a network project that all participants commit to the initiative and do not just muck around a little bit with public money as the umpteenth project ongoing in parallel.

• How to prevent cases where someone pulls out as soon as good results are starting to come out to monetise them solely taking ideas, results, employees and customers from other members?

I’ll leave these topics to the capable hands of the gentle reader (writer exists from the unlocked backdoor of the digital stage…)

How cities can DAOdify themselves?

A variant of transformation is where cities become decentralised communities launching their own community currencies.

This could start with a DAO model where citizens are crowdsourcing ideas . This is a sliding, gradual change.

How to do?

City DAO collects funds to its own treasury for example by renting out city properties, putting a certain amount aside for all levies and fees the city collects or allowing residents to divert part of their municipal tax to the DAO. Once there is a sizeable sum in the DAO Treasury, City Tokens are created that are pegged to the money in Treasury. To kick start some amount – say 30% - of the newly minted tokens could be distributed evenly to all residents of the city. People tend can use the city token to pay for all the fees city collects (kindergarten, water, electric grid, public transport,, museums, fines etc.) or even municipal tax when the national legislation allows.

Or the city can just mint City Tokens (CT) from thin air and allow as payment towards the city. To give further incentive, a small discount could be applied if you use the CTs.

Other businesses can – if they wish –start accepting this liquid city token enlarging its usefulness. As the city token only works within limited geographical area, it means that all value captured in it remains flowing within the perimeter. It’s an accelerator for local trading.

Now City Treasury continuously gets payments in tokens that it can inject back to the local ecosystem and it also collects payments in national currency and can mint new tokens pegged to that. They are injected back to the local ecosystem

And the city could start paying its purchases in tokens or even paying part of employee salaries in tokens (latter one may not be so popular as national currency is more liquid and useful).

Then crowdsource part of city tokens use. First through residents own City Improvements Proposals (CIPs) that receive enough support in a vote. Voting could be based on holding a NFT (unique identifier given to each eligible resident) or holding separate city governance tokens that are issued to all residents.

As example of latter, city can launch its own governance token – let’s call it URBI. Everyone is given a base amount in an airdrop. City may then give incentivise for different types of activities that make the city better by issuing additional URBI. Activities like making CIPs with good outcomes (post-implementation results), reporting broken infra (careful that this does not result in people first breaking stuff to gain tokens), reducing CO₂ emissions for example with remote work, carpooling, walking, biking, investing in nuclear energy and other clean solutions or using public transport.

City then uses the treasury to purchase governance tokens giving them monetary value. People with large amounts of URBI can then think whether they prefer to slightly more influence in the city affairs or hard cash. To prevent anyone hoarding large amounts of URBI for extraordinary influence, quadratic voting may be used. To prevent anyone losing their governance power, selling may be limited so amount never goes below the initial airdrop. This also make means holding URBI makes sense only if you live in the city, for outsiders it would just be a fabulously bad investment opportunity.

Quadratic Funding can be used. Here people make voluntary contributions against some idea that they like (like create software to automate a city process or just create an app to make use of services easier) and the City Treasury makes a corresponding contribution. If the proposal saves city costs, the initial team making the proposal could be given a substantial part of it as a reward for set time (30% of savings for two to three years) and the city DAO could also receive part of the reward (City DAO is a separate entity from the city own coffers). Not all good proposals can however be quantified in terms of value saved.

Implementation of project could use the DAICO model where funds are gradually allocated to implementation team based on milestones reached. If milestones are not reached, funding dries up.

City improvement could also be open – anyone can start a project to automate some aspect of the operations and raise money by selling project tokens. Price could be based on a binding curve (the earlier you join, the cheaper it is). Successful projects would be rewarded with major part of savings realised and distribute back to token holders.

The shift towards DAO based city could thus be gradual. First just 5% of funds are in the DAO and used in a crowdsourced manner, different governance models are tried and once a working one is organically found, slowly shift more of the funds to the DAO.

States could also use the same model to DAOdify themselves.