Silvio Micali's (Algorand Founder) Decentralized Governance Proposal 11-24-2020

Governance
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Btw, there is also idea for consideration… What happens when some country blocks all internet? For example russia or china…

What happens to the russian companies that owns algo and want to do transactions?

Basically they should be able to do the transaction in isolated networks, and later combine them… But this contradicts with the idea of no forking…

Perhaps the financial market will prefer other crytocurrency? The whole point is, is the governance going to be able to settle this type of issues?

Is there somebody from official algo company in there or is this discussions only between algo users?

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I for one, want a completely decentralized system. Anything that requires KYC, is anything but. Requiring verified identification is the same and I definitely don’t agree it is desired or necessary.

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@aojjazz Totally understandable, and you are probably right.

And just to clarify, I too agree that the payment network itself should be as decentralized and anonymous as possible, and the earlier discussion wasn’t intended to apply there.

I personally hate the current KYC rules in the banking world, where I understand the governments’ desire to fight money laundering, but I also know from personal experience how the KYC and AML regulations also hurt 100% legal operations, especially small businesses. For example, if you are a small business in one of the many legal but so called “high risk” industries, most banks won’t even bother doing business with you. Because in their mind you wouldn’t bring enough business to justify the “risk”. And I truly hope that cryptocurrencies will change banking from being a “priviledge” afforded to some, to a “right” that all individuals and (legal) businesses around the world have access to.

Now, my interest in such digital identities that can be mapped to actual human beings comes from the desire to bring democratic decision making to the digital era. In democratic decisions such as voting, we need the ability to enforce “one person, one vote”. And therefore in online voting, we need such digital identities that can be mapped to actual human beings.

I admit that my comments about applying these more democratic decision making systems to Algorand governance were not fully thought through, but just quickly brainstormed ideas I threw out there. And I might be wrong.

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Hi, how would you like to comply with regulations?

How do you want to protect finanancing terrorism or financing illegal activities?

Lets say example:

Corrupted Judge will require payment for his decission. He pays on algo wallet. Then he does the trades in decentralised finance world without KYC… Then he swaps it to USDC… Then he uses paypal to buy things… Do you think this is ok? I dont think so… government must have ways to create verification of judges so they are not corruptable

Example 2.

Someone pay fe million algos to person B to commit terrorist attack on algorand headquaters… Terrorists will have to purchase some guns or explosives, so they use decentralised finance without KYC to get USDC or USD… They buy them, and commit attack. The price of algo goes way down, and financer will make a lot of money. I dont think that this should be possible. Government must have some way of preventing this use case…

KYC is good and there is no way around if we want to be legislation compliant…

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Sorry, these arguments are just silly. All fiat on/off-ramps already require KYC/AML because of numerous regulations there. Crypto is completely traceable and entry/exit through money handlers ensures tracking of these things. It’s not remotely the chains role in any of this - none of it. It’s like saying each dollar bill should have KYC of every person that ever handles it.

To top it off, none of this has anything to do with the governance proposal.

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Actually, every dollar bill is traceable… I have experience with eur, but in my real experience when person tried to bribe me and police took him, they have search every bill with fingerprints and they traced it to the atm by the id on every bill… This is real, and it is good thing in my opinion… In Slovakia there is even law that you cannot do more then 5k eur transaction in cash in your accounting, so that everyone is traceable in banks…
Believe me that it is for our protection…
Yes, I know that the digital trace with blockchain is even more transparent than those in banks, but that gives no reason to say any bad about the KYC…
The real question about the govenance is, how algorand will protect the business cases to stay in legal site and supress similar ideas about the KYC not being required…

You should communicate it much better…

My vision of perfect govenence is following:

First, few categories are created: eg Legal, Protocol, IT, Marketing, Financed/Grants …

Each person has one vote. Each person can delegate his vote or partial part to other persons. F.e. I trust Silivo with Protocol, so i give him 90% of my votes. I trust also my friend, so I give him 10%. I trust some lawyer so I give him 100% of my votes.

Everyone who has power more then 1-5% of the network can suggest proposals. F.e. we want to change protocol not to allow 1000 transactions per second, but 20 000 and we will give more money to indexer nodes becase its more transactions to store and traffic to handle… So everyone who feels to vote will vote, and end person should see that is voting 99% for and 1% against… The delegated voting should finish sooner so that if end users are not comfort with their vote they can change it…
At the end the sum of voting is published and decision is made.

This knowledge based democracy/governance is much better because the trust of knowledge in specific area is moved to the delegates who make decisions with the wisdom in specific area.

Disclaimer: I am not in any way affiliated with algorand inc or algorand foundation, and i do not know what they consider to be the governance except of information in this forum or on their web…

I would prefer to see more information.

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That’s a great example (as was your example about the corrupt judge), and I would certainly agree with you that it’s for our protection if it was limited to scenarios like yours where an actual crime has been committed (or at least a crime is suspected by law enforcement).

My personal experience however (that I mentioned in my previous post), is one where KYC/AML regulations are used to discriminate against 100% legal transactions, where there is no crime nor a suspicion of a crime. And that’s why I hate the current state of KYC/AML even if I agree with the underlying goal of fighting money laundering, and even more importantly, having mechanisms in place that would allow catching corrupt judges.

Interesting that you mentioned delegated voting. There is an academic paper showing that under certain assumptions, when voting is done by representatives each of whom representing multiple other people, then the voting weights of those representatives should not be simply the number of people he/she represents, but the square root of the number of people. To an extent, this applies to delegated voting too.

And that is also why I proposed the usage of square root earlier in this thread as a mechanism to further democratize decisions that otherwise may be too centralized. (I should try to find a link to the paper so I could share it.)

I apologize for having gone off topic myself, but the discussion we are having is very interesting (and important) and shouldn’t be stopped just because it may not all be related to the governance proposal. Perhaps it should have been split off to another thread…

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From the discussion on the discord is the result that the grants approvals is not subject of the governance as proposed, and the only thing that the governors will decide is how many algos and what proportion is distributed between each grant channels…

The staking will transform from participation rewards to 3 months locked governors rewards.

Algo foundation/inc does not accept any public proposal in this matter… They make rules by them self and no public opinion is accepted… This can be seen by yesterday presentation when they were doing marketing presentation, and at the end they have picked up only questions they like… No public interaction was allowed - eg my question when subscribing to event was not mentioned, and no way how to ask during the presentation was proposed…

The decision about the governance is basically that algo ethem is monopolism and hypercapitalism - those with money should rule this world… (the founders or early backers)

Also no transparency is going to be improved in regards how many algos which person will receive/received because they claim that the receivers of these free algos do not wish that…

Still no date set when official algo wallet source code will be released.

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@scholtz OK, we should seek to contact Prof. Silvio Micali himself. But I think that the points raised should be organized first to a coherent document… What do you think? Do you agree?

And the points should be classified according to theme, importance, etc.

I think too, that the most important question is: Where is the money?[ edited] Prof. Silvio’s network has grants, staking rewards etc, but alas, there is not enough transparency. And I think that is the second most serious issue. The third is secrecy: what about the technical roadmap? What about making the official wallet open source? etc etc

Finally, and I stress that it is only a feeling, that somehow they are not willing to take proposals. There shgould be AIP (Algorand Improvement Proposals) like EIP (Ethereum Impovement Proposals). E.g. the current lack of subscribing to events really hurts… (Maybe it stems from the current architecture). Sometimes I wonder: would it be possible to do something like Ethereum Solidity on an extra layer? Beside the core network protocol? But I am not knowledgable enghough to answer such questions.

There was a proposall, for example for a new Algorand Virtual Machine. As I remember, there wasn’t ANY reaction.

So, by the end of the year, Prof. Micali will have an extra fast network, with 46000 tx/sec, and that is practically all we know. And there are continuous improvements, like TEAL3 :slight_smile:

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@scholtz I think you can validate nodes using VPN

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silvio@csail.mit.edu

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OK, when I wrote to this address, (months ago), I got an automated answer that Silvio Micali is on a 1 year leave.

I wrote again now. I got back the same message:

silvio@csail.mit.edu 2:34 PM (1 minute ago)

to me

Dear All,

Please be informed that I will not be at MIT through 2021 and that I will not read this message.

All the Best, Silvio Micali

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silvio@algorand.com

https://ilp.mit.edu/node/12410