DAOs: Why Sovereign Accountable Commons Might be Better

Mutual accountability between the individual and the community attempts to balance the following contradictions:

• We want to increase our own freedom and the freedom of others AND communities need to be able to protect themselves from bad actors

• Each person should be able to choose the context of their life and to do work that fulfills them AND communities need to be able to organize into something more than just a collection of individuals

We designed Sovereign Accountable Commons (SACs) in order to embed mutual accountability in apps and organizations without needing blockchains to secure the integrity of the space. Because all Holochain apps inherently hold the code underlying SACs, any platform built on Holochain has the ability to follow the principles which we lay out in this article.

Despite this article's title, SACs would not do away with Decentralized Autonomous Organizations (DAOs) but rather provide a foundation for them to build on. DAO structures allow for action external to the collective of people making up the organization. They use contracts to form into an entity in the same manner as corporations, simply substituting legal contracts with smart contracts. Like other organizations a lot of their day-to-day activities happen outside the sphere of those contracts. In contrast, SACs allow for accountability and action internal to the group, across all platforms. This emphasizes the day-to-day while minimizing the role of contracts, only implementing them when strictly needed.

This article seeks to describe the main benefits of building decentralized organizations that follow the fundamentals of Sovereign Accountable Commons. Starting with DAOs we consider where decentralized organizations using blockchains fall short of their aspirations, following we propose SACs as a potential solution, and finally we walk through the example use case of a community agreement and its evolution.

DAO’s promise a way for individuals to collectively own and manage internet-native enterprises. Many speak of collaboration and community. They seek a future where everyone has the ability to access communities of their choosing and to lead lives as free agents, uninhibited by the rule of institutions, governments, and third parties. We applaud this drive for freedom. However, we often see DAOs fall short with their aversion to the messy parts of human organizing and community building.

The DAO’s external actions function autonomously via smart contracts based on votes, tokenomics, or the community’s other power distribution mechanisms. Internally though we often find a deficit in the community’s ability to manage conflict. Further, the reliance on coded and autonomous action creates an environment where the individual and the collective are estranged. Rather than a community, we find a collection of individuals in competition with each other for support of their ideas and motions. All this is embodied in the explicit trustlessness of on-chain operations. In contrast, the felt community and its day-to-day activities and decisions of many DAOs actually exists in the centralized off-chain world of forums and Discord channels, belying the very premise of these organizations.  

SACs attempt to bridge this gap. Rather than pushing the hard parts of collaboration and organization to deterministic, coded solutions, we seek instead to use code-enhanced spaces and sense-making tools to support individuals in co-creating community and digging into the messy parts of human interaction.

Sovereign Accountable Commons are coded spaces following a set of fundamental principles in order to collectivize interaction, forming a space where the interests and actions of the individual and the collective don’t collide, but rather mutually reinforce each other.

As a structure implemented in a digital medium a SAC requires these fundamental properties:

• Mutually consented to rulesets which allow peers to operate in a context of equity and clarity.

• Accountability via an uncapturable medium of communication and interaction.

• The ability to walkaway (fork), with data held in common.

Note that these three principles require each other in order to provide the desired outcome. Let’s examine these properties in more detail.

Communities begin simply as collections of individuals, which grow to be more than the sum of their parts because of their interaction patterns. Starting from the common ground of explicitly shared, transparent, mutually consented rulesets lays the groundwork for individual alignment with the group. Historically, the rules of physical social spaces have evolved to distribute power to particular people. They inequitably dictate who can speak when, who will be heard, and who will receive benefit. Breaking this equity failure for digital spaces requires a new capacity that begins with and maintains the ability to be explicit about the rules of engagement.

Uncapturable mediums of communication create the conditions for transparency. Think of sitting around a campfire. Everyone can speak and no one can snatch another’s words out of the air. To disrupt someone’s speaking you must speak over them; you must act openly in the public sphere. The exercise of power becomes transparent in the medium and thus makes it uncapturable. In contrast, we can see an example of capture with Amazon banning particular words in their warehouse worker’s internal communications in order to disable attempts at unionizing. The company and workers have asymmetric abilities to communicate and control information, and hold asymmetric relationships to the visibility of that control.

Accountability requires us to be able to tell accurate stories about what has happened, and everyone’s voices matter to attain that accuracy. SACs enforce individual’s accountability to each other and their community by having everyone sign everything they say and do, thus recording it in the public sphere. Similarly, because of the consent, transparency, and common-ground of the communications medium, the community becomes accountable to its individual members. If one member is treated unfairly, the community cannot hide it, not even from other communities. Accountability in SACs comes from:

• Provenance:knowing who said and did what. SACs achieve this through the signing of all speech acts similar to how transactions are signed on the blockchain.
• Clarity:defining the meanings of particular words, actions, and community norms in order to enable the recording of not only what members say but what they mean.
• Membranes:defining the borders of a community (processes of access and removal in the community, transparency of different information, etc.). The group holds both the barriers and affordances to cross between different spaces in common agreement. This provides a context for interaction.

When a context no longer suits part of a community they also have the option of walkaway which helps to maintain consent through the right to disagree. Each member has the ability to fork the community or join another, taking their data and the public data of the community with them. A non-trivial action, we will explore community forking further in the upcoming article Walkaway or Why Forking Matters.

A SAC that maintains these fundamental properties can take many forms — chat applications or social media platforms come to mind as obvious examples because of the way this description of SACs focuses on social interaction. But a mapping application can benefit from the same principles, as can a film review site or any form of application we might term a “platform”.

DAOs can also benefit from these fundamentals. In order for these principles to apply across the entirety of the DAO, all digital activities of the organization should be performed on SAC compliant applications. This ensures continuity and keeps members accountable equally to what they post on the community forum as well as their votes on issues of treasury management. As all Holochain applications are inherently SAC compliant, DAO’s built on Holochain have easy access to these benefits.

SACs enable new possabilities for the individual (Photo by Su San Lee on Unsplash)

We desire a freer society where everybody has the ability to choose their own work and right placement — freedom of action and association. With SACs we aim to create an underlying structure, a set of principles for systems of communication and organization in digital space, intended to allow greater freedom and to increase one’s ability to consent to relationships rather than being forced into them by the power of institutions. DAOs are, however, institutions. They are organizations of people who come together to do something collectively that no one person could do on their own. As we go on to describe, following the principles of SACs would allow for a more consensual environment as the proliferation of social spaces provides participants with alternative organizations.

In a SAC the rules of a community become clear, available to any, and mutually created/consented to. Because of this, people gain the ability to choose communities that suit their needs and avoid those that don’t. The capacity to easily create new communities through simple setup protocols and especially walkaway, will greatly increase the variety of communities to join. This fundamentally challenges the monopoly on the internet by large corporate players that dictate the terms of engagement.

This would lead to right placement: arrangements and relationships where individuals find alignment between their particular skills, desires, and the needs of their community. Sometimes we know more about what we don’t want than what we do want, so SACs can support the discovery process of moving people towards right placement through a combination of engagement and optionality. As communities would not have leverage to force anyone to do what they do not consent to, the pressure to work as a part of the community without the demand then acts to filter people into activities that bring them joy.

Similarly, to quote James Carse in his book Finite and Infinite Games: “Whoever must play, cannot play.” Thus, choice is a necessary precondition to play. SACs then aim to create room for play through the proliferation of choice and consensual engagement. The ability to collectively rewrite the rules intends to provide infinite spaces and iterations for play, while at the same time building particular contexts for creativity to emerge within.

Imagine a DAO built out of multiple apps running on these fundamentals. People would self-select into communities rather than out of them. With many options for other communities to select into, community members can actually consent to participate rather than having that participation be a necessity. And through an ease of customization, each person can use the version of the apps that they prefer, editing and augmenting as needed to create their ideal digital environment. Building a social space together as a shared commitment, groups can design an experience of meaningful work and community. Each part of the DAO would enable this because the whole structure constantly realigns towards these principles.

SACs help align people's needs and enable communities. (Photo by Alina Grubnyak on Unsplash)

The set of tools that communities gain through SACs center on remedying the breakdowns in understanding that arise when no longer communicating face to face. Foremost of these is accountability. The tools of provenance and clarity allow the community to mediate and work through disagreements that participants have with each other by finding shared meaning and intent behind the participant’s actions and statements. This transformative justice based response leads to healing rifts in the community. When membranes become involved it is to limit harm and if necessary remove a community member, but the system first acts to add clarity and create shared contexts.

Other tools, like those developed with Gameshifting, can be used in conjunction with SACs and aim to assist in setting the context of communication, allowing participants to signal their comfort and understanding in a conversation, shift through the different stages of a discussion, and determine the methods used to make decisions.

SACs seek to make the processes and context of discussion, decision, and community explicit. As addressed previously, the current DAO space views the technical processes as paramount and sees access to a platform equivalent to participation in a community. We see the inverse as true. Communities form out of active participation and interaction. By building shared meaning, communities define themselves. In a decentralized space, openingly accessible and editable rulesets, combined with the accountability of membranes, provide a path towards this sort of meaning making. Thus, these aspects of the technical system would provide a space for communities to work through the difficult social dynamics of being in relationship to each other.

We also find the double meaning of accountability important here. Not just accounting for the motion of tokens, but now also the interactions of speech and intent. The metaphor of accountability refers to both bookkeeping and storytelling. Through the development of non-monetary currencies, which tell stories about how resources get used, a DAO can go beyond market based methods for collectively managing resources.

Take a watershed for example. A DAO set up to manage water use over hundreds of miles will face difficulties if it only concerns itself with the amount of water which gets used, ignoring information about the how, where, and why. Water, a partially rivalrous good, is free to share, but mismanaging it hurts everyone using it. Broader ecological questions would also come into play, as would divisions of power and governance in subject specific matters based, for instance, on Indigenous groups’ ancestral claim to the land and its management. A DAO used for this purpose might need stricter membranes and governance systems; the DAO might also need to develop new ways of accounting, utilizing unique, shifting metrics for understanding water use. Clarity and consent as well as the evolvability of the community’s rules and organization enable all of this, from the development of metacurrencies to contextual distributions of power based not on token ownership but rather deeper social relationships and connections to particular issues.

Evolution serves as a useful metaphor across SACs. Because SACs utilize DNA-like grammars — code blocks that enmesh themselves to create particular contexts — communities and applications alike can grow and change as their macro-social context does. The coded grammar of the app/platform/DAO does not need to remain the same but can rather be added to, changed, or fractured off to create something new. While our watershed DAO might have more issues forking because of the relationships to power in meatspace, it can still evolve over time, for instance to account for new ways of measuring the ecological impact of a dam. The DAO does not have to bind itself to one currency or system of value because SACs maintain integrity even as they shift their protocols and methods of accounting.

Let’s quickly consider how SACs help to mediate and enable the merging of protocols and social processes.

A community can define any number of governance methods for different processes depending on their needs, but SACs always require a few key stages for the editing of their rulesets in order to maintain consent and clarity. Define: the stage of initial proposal and proposition to the community. Refine: the stage of edits and adaptations, whatever the community input mechanism. Align: final decision making and enactment of the new rules, whether determined by consensus, a representative vote, or otherwise. This outlines a standard that defines the process the community uses to edit standards and forms the base for all other governance in the community. The recursivity embedded in this structure allows the social and the protocolary to coexist and maintain their flexibility.

Take the hypothetical example of a community that set in their initial charter the phrase “we will treat all members with respect”. Sometime later a member accuses another of treating them disrespectfully. Documentation of their interactions is available for all to audit, but there remains a lack of clarity on what respect entails. Perhaps cultural understandings of respect clash, each participant working from different traditions of what constitutes “appropriate manners.” In order to collectively remedy the issue, the community does not punish either member for the conflict but rather starts a process to mediate their misunderstanding and to develop greater clarity for the future. This starts with defining what respect means and what it means to act towards each other with respect. This initial definition would then be refined through community input, perhaps in this case particular input coming from discussions with the members in conflict to rectify the confusion that initiated their dispute. Other input might come from a comment period or a survey managed by predefined parties. Finally the community either accepts or rejects the proposal in the alignment phase. These stages focus on the social, but translate that process to effect code. Whatever the social governance process, the accountability mechanisms of SACs keep the system secure.

To sum up, we see Sovereign Accountable Commons as a set of principles that ensure clarity and accountability within and across platforms. DAOs, in particular, have the opportunity to benefit from these principles and their corresponding protocols because they allow for interactions and assurances previously only possible with in-person organizing. By allowing DAOs to move beyond protocolary design, we can bring the social contexts of community into digital governance.

We see SACs as an infrastructure that equally benefits the individual and the organization. By working to align the mutual goals of those two parties, SACs minimize the effects of conflict while emphasizing its benefits. By creating a container for mediated conflict, communities can safely engage in productive iteration. As communities evolve, individuals can seek out right placement, doing the work that best benefits the community while also being personally fulfilled.

While built from a limited set of base principles, SACs open up many new areas of inquiry and design. Stay tuned for upcoming articles on Soft DAOs, the art of forking, uncapturable carriers, and more.

Originally published on the Holochain Blog by Rosalind Marino and Eric Harris-Braun on 23 August, 2022