Permissionless does not equal Unrestricted: Citizenship and the boundaries of entry

Posted on October 23, 2023 by B3nnn and Dermotor

Web3 is a giant experiment in designing systems that better reflect our values. We have all benefited from the internet as it is today because of the values already encoded in its design. One reason the “Community” meme is so strong might be that communities better reflect a values system we aspire to. Communities leverage the gifts of their members and are bi-directional: sustained by and working for these members.

But what is membership? Is it holding a token? Repping an NFT? These signals barely scratch the surface of how we embed values alignment in DAOs. Participation in governance using only these types of markers requires little, if any, values alignment. And, as we have seen, they often result in suboptimal and somewhat extractive (uni-directional) outcomes.

The place where open systems and membership really meet is around permissions. Designing open and permissionless systems that reflect our unique values, particularly when it comes to governance, is really hard. In part this is because there is a common misconception that permissionless means unrestricted. This is, quite simply, wrong.

Most DAOs find themselves in an endless Sisyphean struggle of trying to align people with the ambitions and needs of the DAO. For those left with that responsibility, pushing a boulder up a hill might not sound too bad by comparison. The original sin for DAOs is attempting to escape the natural laws of gods and not creating a clear understanding of who should (and should not) have the right to influence how the DAO operates and evolves. Said another way, permissionless does not mean unrestricted. Permissionlessness is about empowerment. It does not mean a right to impose your will on others.

Take Ethereum. It provides blockspace that anyone can read or write to, and you can fork its code (and try) to build a better version. But Ethereum’s community does not permit just anyone to push an upgrade to its protocol.

Even libertarianism, the most permissive of political philosophies, holds “do no harm” as core to its principles. If you want to avoid harm, nobody should have a right to enter and simply do as they please. This is where most DAOs have got the balance wrong so far, conflating token holders with community and tokens with power. DAOs need to do a better job of understanding who their stakeholders are and how they are represented in governance. This question is really about who should be a Citizen in your new digital nation and what kind of rights and responsibilities they should have. Taking a fresh brush to this digital canvas, we can be much more nuanced about how we think about representation, and how these rights can expand as members prove their alignment and value-add in whichever autonomous world, community or network state they are part of. And, of course, how such rights might be restricted or revoked too. If you want your governance to align with a particular set of values, give governance power to those who align with those values in the first place.

While freedom of exit, fork choice, and ragequit are all important, we must also elevate intentionality around the limits to freedom of entry and membership to at least equal importance. Andy Warhol said of Studio 54 that “the key of the success… is that it’s a dictatorship on the door and a democracy on the dancefloor”. With blockchains, we can do even better, ridding ourselves of the need for subjectivity at the point of entry. DAOs don’t need a Sven Marquardt. We can use credibly neutral and meritocratic entry restrictions, and a dynamic and emerging set of rights, to create soulful, productive communities.

It’s important that these entry restrictions maintain a (generally) attainable barrier to entry. What is the right amount? We’d say “just enough”. The desire is for the amount of friction to be a feature and not a bug, dissuading only those who aren’t really aligned in the way that is needed. This is a complex thing to define, and true legitimacy in answering what is “enough” comes from a clear and transparent metagovernance process that allows for iterative tuning of this answer and its evolution over time.

The benefits of clearly defining what it means to be a citizen of your community, and how to become one, extend beyond better organisational decision-making. This type of thoughtful membership and onboarding sets the stage for a deeper sense of belonging, creating the potential for more empathy and the social accountability of upholding your commitments as a member. Otherwise, we end up with low empathy bootcamps or the low accountability adult daycare we’ve seen emerge in many DAOs today.

Operating in communities like this isn’t just more effective, it’s more fun! With fewer distractions comes more focus, and with more empathy comes the safety to be vulnerable, both important ingredients in helping communities (and their members) come closer to their flow state. It should be no surprise, then, that DAOs and communities with more thoughtful membership restrictions tend to see higher engagement and participation.

By more thoughtfully codifying Citizenship into DAO designs, we create a coherent boundary around our communities and make it easier for people to understand how to cross the threshold, what awaits them, and perhaps most importantly, what is expected as a citizen on the other side. While it might seem counterintuitive at first, it is through a better definition of the restrictions placed on the open and permissionless nature of these worlds that MORE openness can flourish within those boundaries. Consequently, we believe that Citizenship within DAOs can unlock what is possible when we create places where people can truly belong and be their best selves.

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