The vision is clear
The leadership is outstanding
The communication gets better by the day
The community grows with A players.
The technology is unparalleled, even in crypto…
Even having said all of this, I’m far more interested wrinkle braining counterarguments for awhile…
I think the biggest risk (for this and other dApps), is long-term governance. I believe in a future of DAOs, but the initial drafts of the DAO governance systems we have now are still young, a bit simplistic, and unproven.
Sure, very simple ones like MakerDAO are large and doing well, but what they do is fairly simple and algorithmic.
WSB is essentially building a collection of crowd-sourced managed funds (an inherently complex thing), and will be using (at least initially) a simplistic voting platform to accomplish this.
Here are some challenges and risks:
How much control and autonomy will the management team be able to retain over the dApp as it matures? How could that control be hurt or impacted by extreme success/failure in the near term?
What if there’s a major exploit, everyone losses money, and the project gets bad press? How would that situation be managed?
How will bad ideas or bad actors with large holdings of WSB tokens be censored? What if institutions bought large amounts of WSB token to sabotage the project? Who would have control to block or censor these bad actors? How could we be sure this censorship power (if it exists) is not used against the community to take control? Censorship is often one of those (damned if you do, damned if you don’t) types of things.
How will the project evolve/innovate as the defi space shifts, and who’ll have the power to make the drastic changes necessary to do that? For example, if Solana or ICP became drastically cheaper and more secure platforms to use within the next 12 months, how could we safely migrate everything onto those platforms and how would we finance that (as well as manage exploit risks during the migration)? What if we wanted to upgrade to quadratic voting, or the liquid democracy governance system of ICP, or the futarchy system of Gnosis?
How will we beat out competitors? For example, we’ll need to innovate and beat out tough competitors like Cindicator’s Stoic app, which passively made investors 318% in 2020 and has been delivering excellent gains this year as well: https://cindicator.com/stoic
What if decentralized funds are made illegal in certain countries? Regulatory crap already threw a wrench into the presale (blocking most USA investors), and the institutional assholes will definitely try any slimy tactic to fight retail investors, especially as our project begins to gain success.
I believe in this project’s future, what we are doing, and how we are doing it! I just hope we can continue to remain agile, innovative, secure, decentralized, and competitive while navigating the fast-changing defi space.
Great reply, staying on ahead of the curve is paramount right now.
Thanks Isaac. I have some more research to do after reading this excellence. Damn.
You’re right, on my 3rd Busch latte.
Great analysis Isaac!
In my opinion especially point three must not be neglected
How will bad ideas or bad actors with large holdings of WSB tokens be censored
The risk of bad actors buying in to manipulate and trying to kill the project is existing
Yep! But then, if you create a way to avoid this, then how do you keep that safety mechanism from introducing a new exploit channel? Who chooses what’s censored/ignored and what isn’t? How do we make sure the censorship mechanism itself isn’t misused or taken over by bad actors?
So far, I think the best defense against this is quadratic voting. This makes it exponentially more expensive to influence the network. However, if we implemented this we’d need to first give the WSB token a dividend or some other additional utility, since quadratic voting would basically deter against holding very large sums of WSB (which isn’t a bad thing in itself since that would also increase token distribution).
In my person opinion, I think the perfect governance system would be quadratic voting mixed with the Neural Networking System with liquid democracy the ICP runs on, with a little futarchy sprinkled in. Those seem to be some of the most advanced and innovative governance tools created so far, and fusing them together would be complex but freaking awesome.
Great post! Some thoughts:
How much control and autonomy will the management team be able to retain over the dApp as it matures? I think the plan is for the management team to effectively renounce all control over the DAO etc. once enough tokens have been distributed out into the wild, so that the network is sufficiently decntralised. I think end of Aug is the current timeline for that.
What if there’s a major exploit, everyone losses money, and the project gets bad press?
A major exploit would be pretty terminal to the whole project, is my guess. But I have complete faith in the team that they know what they are doing and will build everything very securely, so that can’t / won’t happen.
How will bad ideas or bad actors with large holdings of WSB tokens be censored?
I think the beauty of a DAO like this one, is the very fact that you cannot control or censure the WSB holders from exercising the right to vote that people obtain by buying/holding WSB tokens. The whole aim of the project is to show that a community can be built that is big, strong and diverse enough to guide the pooled capital and resources to success. It’s an amazing, real life experiment to see how that will go - and there is no way to know or manipulate the natural outcome - good or bad.
As for “bad actors” buying loads of WSB tokens to influence the project (potenially to bring the whole project down) - if institutions feel the need to pay attention to WSB and the ETPs, I think that will only happen if/when WSB has been a HUGE success and the ETPs start having an impact in the real, traditional stock markets. If that happens, the WSB tokens will already be a y higher price than they are now. And if institutional money comes in to buy tokens, the sky is the limit for what the token price could be. That is the ultimate and best “problem” this project could EVER hope for. That is my ultimate best case (moon case) scenario.
How will the project evolve/innovate as the defi space shifts, and who’ll have the power to make the drastic changes necessary to do that?
I think theplan is for the WSB token holders to vote on how the platform develops over time. It will be fascinating to see how it all develops.
How will we beat out competitors?
By having a great product, successful ETPs and staying nimble to evolve the product and platform as the whole DeFi space evolves.
What if decentralized funds are made illegal in certain countries? Known unknown regulation is a concern for the whole of crypto. The beauty of this project is that regulators can only make it difficult for people to buy and trade WSB tokens and the ETPs - but they can never completely stop people trading them, if they are resourceful enough to want to find ways around any new regulations.
Great points. I agree with all these scenarios being weaknesses that we need to address. To your last point about blocking users gaining access to WSB token. How is it that robinhood allows trading in doge? This baffles me all the time. So why wouldn’t Robinhood, a regulated exchange, not allow WSB to be traded as well?
I agree that their are answers to all of these risks and concerns!
Regarding the risk of an exploit, I don’t think it necessarily has to spell the end of this project as long as we plan ahead. Platforms in recent exploits have used treasury funds and insurance to reimburse losses and regain (and even gain additional) trust. Since new things like flash loans are being invented all the time and we can’t predict what will be possible in the future, I think it’ll be smart to prepare for some type of unforeseen future exploit. Surviving something like that would make the community even stronger!
Regarding censorship, I do see your points. However, I still think quadratic voting would have major benefits. Even outside of making it harder to buy your way into influencing the platform, I think it’s important because richness and brains don’t have a linear correlation (sometimes it’s even inverse). Therefore, more WSB holding having a linear relationship to more voting power means a handful of rich morons could have significantly more voting power than everyone else, and then they could blow all our money chasing bad ideas.
In other words, bad actors aren’t the only risk. Large groups of people are often stupid and irrational. I mean, people used to believe leeches could heal you, there’s no limit to how stupid people can be, especially when they are in a mob.
Quadratic voting would spread out influence, diversify token distribution, and protect against centralization of voting power. The long term staking process used by the Internet Computer Neural Network System incentivizes people to think about the long-term and their liquid democracy architecture increases voting participation while making it easy, passive, and fast. If accuracy history was layered on top of this (using a system that takes ideas from Cindicator), then that would give more weight to people who actually know what they are talking about and lower the influence of morons who are wrong all of the time.
Also, voting on making a major change to the platform isn’t the same as actually implementing it. The community will need a way to hire contractors for platform development, marketing campaigns, or other roles that require specialized skills and full time effort to implement complex projects.
Now this, is an excellent and very insightful post/thought…
I completely agree that it would be excellent if past WSB voter’s performance of their ideas was somehow able to be taken into account and their future vote weighting increased.
But that sounds fiendishly difficult to implement, in practice.
Not enough exposure. I literally just got kicked off the WSB telegram for shilling the WSB token. How does admin not know about the token and how is shilling it not allowed? Just my 2 cents.
Yeah man…good call good call.
I think the bot auto-boots on certain phrases, such as “pump” - but I’m not sure what those phrases are. Message @MeowMeow - he’ll sort you out!