GBA Hot Topics Series-Ethics of Decentralized Networks

In this great paper by Risto Karjalainen about Governance in Decentralized Networks one realizes the numerous ethical considerations that need to be taken into account when evaluating decentralized governance models. The author aims to define decentralization, comprehensively describes all types of governance models with advantages and disadvantages for each.  The author also highlights future work that needs to be accomplished by various experts in the industry in order to abide by the foundational principles of ethics when developing decentralized networks. Several new tools and structures powered by blockchain technology are discussed that could serve as potential solutions for managing the key pain points, such as design and deployment, development, management, conflict resolution that are unique to decentralized autonomous organizations and networks.

This paper clearly underscores that while DAOs have major benefits and solve specific ethical challenges that we encounter in centralized governance models, they certainly are fraught with a new set of ethical complexities that all stakeholders within the blockchain ecosystem will have to address for long term success.

Abstract. Effective, legitimate and transparent governance is paramount for the long-term viability of decentralized networks. If the aim is to design such a governance model, it is useful to be aware of the history of decision making paradigms and the relevant previous research. Towards such ends, this paper is a survey of different governance models, the thinking behind such models, and new tools and structures which are made possible by decentralized blockchain technology. Governance mechanisms in the wider civil society are reviewed, including structures and processes in private and non-profit governance, open-source development, and self-managed organisations. The alternative ways to aggregate preferences, resolve conflicts, and manage resources in the decentralized space are explored, including the possibility of encoding governance rules as automatically executed computer programs where humans or other entities interact via a protocol.


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