a16z suggests Machiavelli to fix decentralized governance

Machiavellian principles for decentralized governance

A blog post by venture capital firm Andreessen Horowitz (a16z) suggests that adopting principles from Niccolò Machiavelli's 16th-century political work, "The Prince," can help solve issues with decentralized governance in autonomous organizations.

Understanding social power struggles

a16z's general counsel and head of decentralization, Miles Jennings, believes that Machiavelli's philosophy offers a pragmatic understanding of social power struggles, similar to those experienced by crypto protocols and their decentralized autonomous organizations (DAOs).

Limiting power centralization

Jennings argues that organizations tend to lean towards autocratic leadership, so DAOs should shift many decisions to the client or third-party layer to minimize governance and reduce the burden on the protocol.

Counterbalancing power among leadership classes

Jennings suggests that DAOs should divide their governance into bicameral layers, similar to the U.S. Congress, in order to ensure power is balanced among emerging leaders and open opposition is encouraged.

Challenging the static power balance

DAOs should create a churn by allowing new leaders to force their way into the leadership class, preventing a static power balance. This constant opposition helps drive progress and prevents entrenched leaders from preserving their position and privilege.

Non-token based voting systems

Jennings argues that using non-token based voting systems, such as proof of personhood, may not effectively combat autocracy in DAOs.

Enhancing accountability through lockup mechanisms

Jennings suggests that DAOs should implement lockup mechanisms for holders participating in stakeholder councils, to enhance accountability throughout their ecosystems. This is in response to the belief that large groups of people are inherently unable to properly hold their leaders accountable.

Triumph of web3 over web2

Jennings concludes by stating that web3, with its focus on decentralization, has the potential to drive progress, promote liberty, and oppose power. By incentivizing competition, empowering rivals, and utilizing non-token based voting, DAOs can help accelerate this cycle.