On value discovery on Fractal democracy and passive income.

in #crypto2 years ago

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Note: A much improved and elaborated version of this post can be found here.

This is the third post on a series of analyses I have delivered regarding fractal democracy. The previous post can be found here.

The efficient discovery of value in fractal democracy systems is a major thing to optimize. As mentioned in my previous post, effective valuation and discovery of contributions may be a determining factor in the viability of any community that chooses to govern itself via this new protocol.

From my perspective, the whole value discovery and ranking process should be performed in real time. That is, whenever a member gets in touch with a contribution from another member, he should be able to subjectively rank it right at that moment. Also, because the real implications from any contribution can only be seen in the long run, that ranking should be adjustable during a generous time window, let's say, ten years.

For example, let's suppose Karol invited Bob to the community on day 1. Then, under current protocol karol would get some respect for this. But what if after some time the community finds that Bob is a super impressive individual who is making groundbreaking contributions consistently? Or what if it's the exact opposite and Bob has become a constant drain of resources for the community? Shouldn't Karol's respect, or more specifically, this contribution's respect be adjusted accordingly?

Now consider Brenda: a very convincing proponent of some very auspicious smart contract. Because Brenda is really charismatic and knows how to market herself, she got some serious budget from Pomelo. The expectation she created was so high that she was given a lot of respect initially. However, after several months of fanfare, Brenda didn't deliver as expected. Shouldn't everyone in the community have the right to adjust respect accordingly?

Let's now introduce Steve, who we'll assume is one of the core developers of the platform. Steve's ideas are profound, and his code is impeccable. This has been recognized by the community by bestowing generous respect on him, consistently. Unfortunately, Steve is facing right now some serious personal difficulties: He is getting through a divorce, he went into a car crash and a Hurricane devastated his house in Florida. Naturally, Steve won't be able to make it to the weekly meetings for quite some time. Should it not be fair that the community continues to give respect to him every time someone interacts with the current version of the platform which he helped to create?

What if, instead of going through calamitous events, Steve just happens to be way too timid and shy to express himself with sufficient eloquence in the breakout rooms he participates? Think about Brenda vs Steve in a room; add to that the inherent difficulty in transmitting complex concepts in a really short time interval to a group of non-experts; mix that with Steve shyness and you will most likely have an inaccurate respect allocation. Okay, I get it: Given enough meetings Steve's average ranking should improve. But, remember, we are talking here about optimizing the value discovery process. So, we must not rely on averages, we must look for the optimum.

To see the problem from a different perspective let's take a look at YouTube and Hive. Both YouTube and Hive are social platforms in which content creators can earn for their work. There are many differences between these platforms; one of them being the level of success YouTube has. Another difference is the possibility YouTube brings for its contributors to create passive income. Such a possibility isn't present on Hive. On YouTube, some videos published 10 years ago are still generating revenue to their creators, even to this day. On Hive on the contrary, the time window to receive inflation from the network is limited to just a few days. I'll dare to suggest that the second difference is a cause for the first one.

The point with all these examples is that every time a member of the community interacts with the work of any other member, some form of respect should be allocated. Furthermore, this allocation should be inherent to that interaction only. It should not be constrained by time, presenter's charisma, shyness or any other factor that obfuscates true value discovery. From my perspective, as much as fractal democracy seems a better form of governance than DPOS, so permanent transfer of respect seems a better form of passive income than simply staking.

One big advantage of real time and adjustable valuation is that it really approaches us to the ideal of the Fractally motto: "Value the contribution, not the person". It's easier to fall into ranking the person when that person is in front of us during a breakout session. Also, it is easier to rank a contribution right at the very moment when we are interacting with it.

The possibility of converting a really good contribution into passive income via a permanent flux of respect promotes quality. This, at its turn, has a whole lot of implications such as disincentivizing planned obsolescence, a phenomenon that has pestered capitalism for decades. This alone can have consequences in entire industries outside blockchain such as music, health, education and many others.

Finally, under this modified protocol, weekly meetings would become just another way of receiving respect. They would not be required. They could be used to multisig the actual transfer of the respect that has already been allocated by the interaction between users and contributions. They could be employed for objection purposes or to direct the conversation towards other activities such as community bonding, having fun or planning new roads for improvement.

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I like your proposal here but would you say it increases complexity (and dev cost) at the benefit of higher accuracy? Would it require design changes or acceptance by fractally chain for integration with the UI/platform they are developing, or would it involve the use of fractally process on another/any chain with a separate UI?

It increases complexity and dev cost initially. The benefits are several fold: One one side we obtain faster convergence to fair allocation of respect because we wont be relying solely on the recurring nature of the weekly meetings. On another side, it will increase competitiveness for those fractals that automatize the process, pretty much as as a completely automatize car factory such as Tesla is more valuable than a horse raising ranch. Yet on another side, it frees human brain hours because the community doesn't have to spend that much time trying to (incorrectly) filter value through the noise.

I don't know the details of what's going to be delivered by the Fractally team. So, I can't answer your second question. However, my proposal doesn't aim to a specific implementation but towards a change in perspective on how to better allocate respect. So, a long term commitment would be required from any fractal that wants to follow this path.