TL;DR: A recent interview with Joel Monegro, one of my crypto heroes, highlights the need to assess and vet governance models when exploring the future value of decentralized networks.
I was listening to Laura Shin’s great podcast, Unchained, and her guest was Joel Monegro.
To understand why I think this is important, I will share the following.
If there is one person in the world whose fault it is that I am as deep into crypto as I am, it’s Joel Monegro.
He and I met via Fred Wilson at USV when I was thinking about the post-Sprinklr phase of my career. After a meeting with Fred, he called in Joel to go deeper with me on the topic of blockchain. That conversation (spring 2016, BTC around $350) confirmed for me I was really onto something and, at that point, I decided to go “all-in.”
Joel and I have had a number of in-depth conversations over the last two years and I view him as one of the savviest minds in the world when it comes to crypto. Probably why I have blogged about him so many times.
He is perhaps most famous for the seminal piece, “Fat Protocols” that, it could be argued, kicked off the ICO revolution. I know it was transformative for me. However, he has many, many accolades, including, most importantly, a contributing piece in the classic, “Blockchains in the Mainstream: When Will Everyone Else Know?” that was my first work in the space and was received exceedingly well.
Bottom line, Joel knows his crypto.
So, Joel gets on the podcast and makes a pretty compelling case that, the blockchain networks which will ultimately survive are the ones that that the best form of governance and the strongest communities.
It resonated with me, because the T3CG framework for assessing tokens and networks has “Governance” already included in the “G” part, thanks to PeerMountain’s CEO, Jed Grant’s suggestion. (discl: advisor to PeerMountain)
However, my appreciation for governance as a differentiator was heightened after my experience working with ARK.
Their DPoS model is, in my mind, a great example of how to think about decentralized governance at work. I’ve blogged about them twice (here and here). (Disclosure: I was an advisor for a time and own ARK tokens.)
It’s also why I am so excited about DAOStack.
I was in Israel recently and spent some quality time with the team. While their vision is admittedly quite big, it’s very sound conceptually in terms of how to scale small groups into larger groups, while maintaining resiliency and agility to adapt and evolve faster. (Disclosure: advisor to DAOStack).
Now, Joel is very bullish on Decred because he really likes the way they think about governance and community. In fact, it was the first investment that his new fund, Placeholder Ventures, made in the crypto space after closing a $150mm round from people like USV and Andreessen. Here’s his explanation.
I haven’t really done my own research on Decred yet, but my interest has been piqued because of how much I respect Joel.
I guess the thing I am taking away from all of this is, even though it’s not sexy, good governance is really, really useful and it’s important to understand it.
Take it from me, I live in Washington, DC! Talk about dysfunctional governance 😉
It’s going to be particularly important, I believe, as enterprises start to integrate with crypto systems. Imagine P&G buying some tokens from an up and coming crypto ad-tech project only to find out later that the governance model allowed for people to secretly mint money and devalue their currency without their knowledge.
P&G is going to need someone to help them figure out who they can make that kind of bet on. That’s where, for example, the NSM Research & Insights, Blockchain MarTech Team comes in.
That team is going to assess all the Blockchain MarTech projects against the T3CG framework as well as against the business/marketing needs to help enterprise buyers make sense of what is going on in the crypto martech startup world.
Stay tuned for info on that.
Bottom line: if you are investing (either money or career) in the long haul of crypto, it’s worth spending some time understanding decentralized governance. (You could always start with Switzerland)