The issue of “conflict of interest” in a blockchain environment

The issue of “conflict of interest” in a blockchain environment is interesting from a governance and economic perspective.

Centralised funds are typically subject to regulation in charitable (https://www.gov.uk/guidance/managing-conflicts-of-interest-in-a-charity) and corporate (https://www.thecorporategovernanceinstitute.com/insights/lexicon/what-is-a-conflict-of-interest/) contexts.

So the legal status of a blockchain treasury is relevant here (corporate or community funds / permissioned or permissionless).

I think it would be reasonable to assume that where a corporate entity can advantageously access drawdown funds from a blockchain treasury – then that is a permissioned blockchain. The decentralised nature of stake and the resistance of the transactions becomes irrelevant when a central entity dictates the terms of access to funds.

“That governance is being pursued in one dimension of stake (plutocratic) without the vital checks and balances offered by other dimensions of stake (contribution or reputation)”

This is the flaw that is at the heart of Voltaire. That governance is being pursued in one dimension of stake (plutocratic) without the vital checks and balances offered by other dimensions of stake (contribution or reputation). In effect the necessary dimensions of contribution or reputation stake are being unilaterally performed by a corporate agent on behalf of a principal community (https://cardano.ideascale.com/c/idea/104536).

All the symptoms of an agent’s behaviour are being exhibited in this transition (eg – focus on self-interest, goals conflict with principal, bounded rationality [all research priorities are self-referential], information asymmetry, efficiency serves the agent not the community, aversion to risk and information is treated as a commodity).

Whether from a corporate business or community organisation perspective this is not fit for purpose. The arbitrary plutocratric influence is anti-competitive and the community relationship is top-down.

Where there is an Agent-Principal problem. Solutions are constrained (have a bounded rationality) by the prerogatives of the agent and principal.

For example, in the context of Voltaire the prerogative to stabilise chain decentralisation in terms of stake bounds it’s possibilities (incl. the utility). The rationale of the chain’s participants is fundamentally plutocratic – other forms of stake are literally “out of bounds” (cannot even be conceived of). This tendency can also be seen where criticism is ghosted or scope unilaterally decided.

Efficiency serves a reduction in cost. This is in order to maximise savings for an agent or a principal (which serves a singular outcome not plural communities). In this sense engineering efficiency is fragile.

” Watch what people and organisations do – NOT what they say or how they market themselves.”

Also decentralised communities cannot be served by one motive or outcome. Social decentralisation can be measured by its fragmentation (its diversity and dissent). Where you see the terms “alignment”, “community building” or “constitution” read it as “community mining”. Watch what people and organisations do – NOT what they say or how they market themselves.

OK the specific statement you made was : “How does efficiency not serve the community?”
I would suggest that this is a rhetorical statement.

To be meaningful efficiency must have an object.
For example – this mechanism is efficient (and the terms defined).

Because efficiency needs an object it is contingent. It is limited by its function and context.
A mechanism is only efficient as long as it fulfills its function. This is always limited – always subject to entropy.
This is what Taleb means by the fragility of over engineered or resilient systems.

Anti-fragile may well be inefficient – because it sustains itself through fragmentation not alignment. Many different solutions not one over-determined solution.
The implication being – many divergent communities, much dissent = more innovation and diversity of thought.

In my view decentralised governance implies fragmentation and pluralism.

Where governance seeks alignment (eg in a universalist constitution) you admit contingency and fragility.
You diminish the scope of what is possible and inhibit innovation by prejudging a singular solution.

Hence to say “efficiency serves the community” is meaningless – a marketing slogan.
Cardano is full of this kind of rhetoric.