A Crack in the Metaverse
14 November 2021
Facebook and Microsoft recently declared themselves spokes-companies for Metaverse. These companies have built, acquired, influenced much of what came from the web the past 20 years. We are living in a future that they had a large hand in influencing.
I’m not so sure we should assume that this phase will have better results. It seems that they are taking their same approach of: "trust us, we know what we are doing. We are all from Stanford and Harvard and Very Smart (TM)."
Just like humans should have a say over the real world, do we really want decisions about the of our future virtual worlds to continue being made in the ivory towers of Big Tech?
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At the same time, elsewhere on the web, groups of independent developers, designers, writers, and community members are working to create new options. A new kind organization to manage shared resources in the commons that the web tends to be made up of. They refer to their communities as DAOs and their vision for what comes next as web3. Their individual visions for web3 are remarkably similar given their decentralized nature. Sometimes their approaches are at odds with each other, and sometimes they are complementary.
Ethereum Name Service (ENS) is one recent example of this. Blockchain addresses are comprised of really long numbers. They are a pain for humans reference and verify their integrity. Much like the Domain Name Service (DNS) provides a way to translate a name like ericdorsey.com to IP address of the server where my web site is hosted, ENS provides a way to map edorsey.eth to addresses on a blockchain. That is where the similarities end. Top level domains like .com are administered by an organization of humans exercising their judgement called ICANN, and given the value of names over which they preside, they are more and more corruptible. If I register a DNS name that violates someones copyright, ICANN can take that name away from me on the copyright holder's behalf. On, ENS, no one can take your name from you. You control the keys, you control your name.
ENS is controlled by smart contracts that define the names, the registration terms, and other data you can add to your name. ENS still has a problem of governance though. Humans are still writing those smart contracts.
So they formed a Decentralized Autonomous Organization (DAO) and issued ENS tokens to people who had previously registered ENS names. Effectively aligning the future of the protocol with the people who went out on a limb and actually tried their new system.
ENS tokens represent votes in the DAO that you can delegate or have delegated to you. Imagine being able to buy voting rights in ICANN.The future is for ENS and other DAOs like it are from certain, but it sure seems bright from where I’m sitting. There is no guaranteeing that these new models of governance succeed, but I can say with confidence that it is incredibly important that we engage in these experiments because our current ways of governing our institutions seem to be a constant state of decline and failure.
The juxtaposition of the Facebook and Microsoft approach and the ENS approach are what I find particularly interesting. My bet is that DAOs are more efficient at larger scales because they better align incentives and thus will be able to out-compete Big Tech in the long run.