July 28, 2021: Revenge of the Shadowy Super-Coders 🕵️🧑‍💻

Lessons in good and bad governance, and introducing PACMAN DAO to solve the latter

Today we see a good example of governance in action at Curve. They’ve submitted a proposal to the governance forum to replace the emergency DAO for the purposes of pushing decentralization towards stakeholders, which will guarantee continuity for the protocol moving forward.

We see a variety of rock stars from the Curve universe, as well as major protocols built on Curve like Yearn, StakeDAO, and Convex. Smart move as always by Curve.

Contrast this with the punchline that is Washington DC (or for non-American readers, s/Washington DC/Your Capital City/). Did anybody hear any of the various pronouncements coming out of Washington DC these past few days and think to themselves, “Wow, these people are brilliant. The fate of world is in such capable hands.”

The banking committee discussed cryptocurrencies with all the sophistication of a user shouting at tech support “I don’t see the ‘any key’ on my keyboard.”

I wouldn’t even trust these bozos with non-toxic paste and a set of rounded scissors. In particular, the oft-befuddled Senator Elizabeth Warren saw an opening to earn some free media.

With the same frustrated energy of a confused grandmother trying to make a phone call on her iPad, Senator Warren came out swinging against cryptocurrencies.

Massachusetts is a state with highly competitive technology firms. Brilliant young programmers seek education at top schools like Harvard and MIT, and now we see why they always leave for other tech hubs. How embarrassed must Massachusetts voters feel to have a Senator stupid enough to try and demonize programmers. Technology is subsuming the world, your constituents stand to directly benefit from these trends, and then you take the opposite stance. It would be as bizarre as a Senator from Idaho declaring a war against potatoes.

To avoid too injecting too much rancor into the conversation, I’ll say something nice. She looks to be in phenomenal shape for being 71 years old. When I’m that age, I can only hope I select an e-girl avatar that looks so good.

She only declared war against shadowy super coders. It’s very insensitive of Senator Warren to pick on a group of citizens for occupational hazards incurred while working to make an honest living. In this case, many top coders stuck at the keyboard all day suffer from Vitamin D deficiency, and therefore require shadowy working conditions to avoid skin conditions like melanoma. Senator Warren should not single them out for their pale faces.

Fortunately, nobody turned any shade of red over her announcement. She’s always been a stunningly ineffectual politician, so the community mostly shrugged and embraced the label.

It’s great that the community is able to adopt insults and wear them as a badge of honor — see also the sudden support for Ethiopia. But, this is also a tactic of the powerless. The crypto community are no longer powerless. The crypto community is wealthy and given the direction of the world, growing increasingly powerful.

As long as a community gives in to bullies, it will keep getting bullied.

Senator Warren is not an intimidating boogeyman for crypto. What is obnoxious is that the crypto community is not being well represented by politicians, and keep getting the business end of the big stick.

Of course, this problem is easily solved. Like everything else, politics is a business, and it’s a particularly simple business, albeit an ugly one. It’s a simple engine to convert money into influence.

Congresspeople nowadays spend about 50% of their time fundraising — mostly cold-calling donor lists. It’s considered particularly ignominious work for people who consider themselves as members of an elite. Have you ever worked with a graduate of a top tier school and tried to get them to make a sales call? Good luck with that, they’re too busy doing “thought leadership.”

Politicians would surely prefer a more efficient way of fundraising. Knowing that politics is just a money business, the incredibly wealthy crypto community can simply flex this wealth to get politicians lining up in our favor.

Relative to crypto spending habits, buying the political system is cheap. The cost to win a single House race in 2020 was about $1.1MM. For comparison, that’s only about 40% higher than gas lost in failing to mint Ashton Kutcher’s Stoner Cats NFTs.

The combined net worth of this newsletter’s mailing list alone could easily buy a significant voting bloc in Congress, if the proper rails were in place.

On top of all this, as we mentioned above, the crypto community has arguably found a superior form of government in the form of DAOs. DAO voting has its drawbacks — it is biased towards the wealthy and poorly architected DAOs are at severe risk of creating DeFi Education Funds (https://defieducationfund.com/). Nonetheless, it’s far more rational than other systems.

Therefore, we propose a DAO for spinning up Political Action Committees (PACs) around topics of interest to the community. A sort of PAC manager, which I’ll refer to as PACMAN for short.

It’s still a work in progress, but here’s the architecture I’m imagining: a primary DAO we’ll call PACMAN charged with minting sub-DAOs we’ll call a dPAC (decentralized political action committee).

  • PACMAN serves as the main contract responsible for spinning up, tracking, and possibly issuing funds to subsidiary PACs. PACMAN is responsible for managing legalese and incorporation for qualifying dPACs.

  • The variety of smaller dPACs should all be organized around a narrow cause, (much like a pro- or anti- gun rights group in the US). Users can directly fund dPACs based on their issues of interest. In turn, the funders of these dPACs receive voting rights on how their funds should be deployed towards their goals.

The dPACs can decide for themselves how to raise, manage, and deploy funds. Any issue of interest to the community, (ie Bitcoin mining rules, tax policy, stablecoin legislation, etc.) could spin up a dPAC around this topic. We could imagine very imaginative concepts getting created, so the larger PACMAN contract gets to determine the threshold at which a dPAC qualifies to create a meatspace entity with legal standing.

The old style system meant politicians had less accountability, but the blockchain mechanics of a DAO make it possible to organize politicians with far more efficiency. We expect dPACs can set incentives and rewarding politicians with funds on chain and voting to unlock these funds to reward good performance. They can offer tricks like the following:

  • Put $1MM in USDC into a wallet to be provably unlocked if politicians vote for or against legislation of interest, otherwise funds revert to the dPAC.

  • Putting 10 BTC toward a specific race, to recruit a credible opponent against a hostile politician.

  • A GM-dPAC focused on the narrow issue of wishing people a good morning could offer 1 ETH every time a politician wished their dPAC “good morning” on live TV.

While the issue-based dPACs focus on how to spend funds, the global PACMAN entity will be tasked with making sure the legal foundation is solid, implementing strict KYC as necessary. Once a successful template is deciphered, the cost of spinning up new dPACs is as simple as incorporation fees.

Fortunately US campaign law has made great strides towards buying off elected officials, including approving Bitcoin donations and even limiting identity disclosures in come cases. The PACMAN DAO could, for example, leverage Wyoming’s DAO law (where CityDAO is making strong progress).

I’m writing in an America-centric fashion because that’s what I know, but there’s no reason it can’t also be exported to other countries where governments is sold to the highest bidder. Ideally PACMAN can make buying politicians worldwide as easy as buying NFTs.

Thus ends my back of the envelope description of PACMAN. If you want to discuss further, join the new Telegram group.

FWIW, outside of the idea and helping code it into practice, the author does not plan to take a fiduciary or leadership role in bringing PACMAN DAO to scale, due to the fact that author is too controversial and cannot stand politics.

For more info, check our live market data at https://curvemarketcap.com/ or our subscribe to our daily newsletter at https://curve.substack.com/. Nothing in our newsletter can be construed as financial or political advice. Author is a $CRV maximalist and long USA despite its patent flaws.