Distributed Self-Government in Protocol Communities: An Introduction and Index of Examples

Abstract

We live in exciting times for governance. Large and powerful institutions used to come in only a few standardized types, such as nation-states and commercial corporations. But the advent of distributed organizations, built on computer code and fueled by digital cash, has supercharged the evolution of social coordination systems. Richly capitalized global communities worth hundreds of billions of U.S. dollars now spring up seemingly overnight. They die just as quickly, too—taking high hopes and huge fortunes with them. This article introduces the fascinations of distributed-protocol communities and analyzes the self-governance of several of the largest and most innovative. It defines seven measures of governance and grades the performance of each of ten protocols on a scale of safe, caution, or danger. The resulting Distributed Governance Index organizes and summarizes the latest developments in the evolution of distributed-protocol communities and provides a framework for continuing observation of this rapidly developing !eld. From these early efforts might come the next South Sea Bubble or better forms of self-governance.

Keywords: blockchain, cryptocurrency, governance, decentralization, distributed protocol

JEL Classification: L10, L14, L19, L86, L89, 030, O31, O32, O39, P40, P49, P50, P51, P59