Is Decentraland opening the doors to a digital nation state?
A digital nation-state is a concept (soon, a reality? 🤔) wherein an organization or community of people are governed digitally. With the digitalization era advancing beyond imagination every single day, a digital nation-state does not seem to be far from reality anymore. Before we dive into this possibility, let's first explore what Decentraland is. ⬇️
Digging Deep: Decentraland 🪓
Decentraland defines itself as “the first-ever virtual world owned by its users”. Decentraland is a revolutionary, open-source platform that operates on the basis of web3 values, i.e., it is decentralized and open-source. Unlike traditional virtual worlds, its decentralized nature enables the ownership and governance of the platform to be controlled by its own users through the Decentraland DAO.
Primary goal: To be a public good and thereby, provide public benefit by being built entirely openly.
Since the Decentraland Foundation supports the growth and development of not just the platform but also its users, the Foundation is bullish on community participation and contribution! 💪🏼
Virtual social interaction is already becoming the norm through everyone Facetiming each other with geographical borders becoming redundant. Decentraland takes this virtual social interaction up a notch by creating a virtual world where everyone would have their own avatars and interact almost exactly the way that they would do it in the physical world. Decentraland also offers a Decentraland Marketplace wherein content creators can publish and sell Wearables and Emotes. The platform allows the content creators to retain 97.5% of the revenue generated through such sales, and a mere 2.5% is directed towards the governance of the Decentraland DAO as well as the grants ecosystem that the Decentraland Foundation is working to build. 🤑
The transparency that Decentraland aims to ensure can be noted by how they publicly display the various incidents or failures in their system and work toward improving the same. As can be noted by the picture below, the ‘open’ incident, i.e., the unresolved incident is that users with many wearables are being shown an empty list. It can also be noticed here that the date and time of opening the incident are publicly available so as to ensure that everyone can hold them publicly accountable if the issue is not resolved soon. Additionally, a status is allotted to every incident in order to indicate how urgent the issue is and what impact it has caused on Decentraland’s users. Transparency at its best! 🚀
Source: Decentraland’s Incident Status page.
The Decentraland DAO - governing the digital nation 💪🏼
Now let’s, for a split second, that the real physical world now has a parallel real virtual world, i.e., Decentraland - won’t this be its own digital nation that now needs governing? Yes! 🥳 But unlike the real physical world, instead of governments, dictators, or private companies governing the world, Decentraland is governed by a decentralized autonomous organization - a DAO. So what is the role of the Decentraland DAO? 💭
The Decentraland DAO is the driving force behind the functioning of Decentraland, possessing critical smart contracts and assets such as the LAND Contract, Estates Contract, Wearables, Content Servers, and the Decentraland Marketplace. This central authority is empowered and enabled by its substantial reserves of MANA. MANA token is the in-game currency of Decentraland and also serves as the platform's cryptocurrency. MANA is completely decentralized and the private key that controls access to its smart contract has literally been thrown away. 🗝️
The MANA reserves, accordingly, enable the Decentraland DAO to operate independently and these reserves also provide funding for a wide range of initiatives and operations within the Decentraland ecosystem. By possessing these key components, the Decentraland DAO holds a position of significant influence and responsibility, ensuring the continued growth and development of the virtual world that it is working towards building. 💪🏼
Since the DAO empowers the users themselves to be able to govern how Decentraland operates, the users are essentially in control of the policies that will determine how the virtual world behaves. For instance, the users would vote on, and decide the kind of wearable items that are allowed, or disallowed, what the content moderation policies would look like (if any), and so on and so forth. All of these decisions stem from a proposal that is eventually voted upon by the DAO members. Voting takes place on the Decentraland DAO's governance interface, powered by Aragon. 💯
Decentraland DAO committee members now get salaries! 😲💸
On June 6, 2022, a DAO Committee Compensation proposal was created which aimed to establish a monthly compensation for DAO Committee Members, who are currently acting as a trusted proxy to enact on-chain proposals voted in the DAO. The rate that was proposed in the initial proposal was that each committee member will commit to working 10hrs per week at a rate of 60 USD/hr, and accordingly would receive a monthly payment of 2,400 USD payable in MANA each month. However, while there were all votes in favor of the proposal, and 0 votes against it, the proposal was not enacted as it failed to reach the minimum threshold of 6M VP votes. 😓
Source: DAO Committee Compensation Proposal
Subsequently, on September 13, 2022, this proposal was submitted for reconsideration. While the monthly payment of 2,400 USD payable in MANA each month, to the committee members, remained the same - the modification that this resubmitted proposal bought with it was that - the working hours for each committee member were now reduced to 4hrs per week and this was at a rate of 150 USD/hr. When the author was specifically questioned about the revision in the weekly working hours and the rates, the response was that the rationale behind the same is vested in “automation”. ⌨
The author specified that Decentraland is working on creating tools to address tasks that are recurrent in nature and this would substantially reduce the time required to complete their duties. Accordingly, the author claimed that 3 hours per week would be enough to initiate and verify the transactions sent in the name of the DAO and that the other hour would be sufficient to improve the DAO’s tools as well as participate in town halls. 🤝
Source: [Resubmission] DAO Committee Compensation Proposal
This proposal was enacted as it received a 99% yes and only a 1% no. Furthermore, unlike the previous proposal, the resubmitted proposal also reached the required 6M VP Votes threshold. The enactment was justified by various committee members in the comments section, wherein one committee member even defined this action to be necessary as the “DAO Committee is, quite literally, the last line of defense for the DAO”. 💪🏼 Another DAO member phrased this action to be pertinent as the DAO must “compensate the gate-keepers of our community funds.” 🪙
Is Decentraland opening the doors to a digital nation-state? 🚪
This governance enactment by the Decentraland DAO certainly is a step forward toward compensating the primary contributors to a DAO. This has raised the question of whether Decentraland is opening the doors to a digital nation-state by compensating its primary governing body. There are certainly both schools of thought that exist pertaining to this matter. However, we at DAOstruct believe that this is certainly a leap in the direction of a digital nation-state, as a decentralized autonomous governance mechanism now believes in the concept of democratizing the process and paying well-deserved salaries to its “last line of defense”. What do you think? 💭
Our concluding thoughts 💯
Decentraland DAO is actively working toward improving the governance mechanism and compensating key members of the committee, not only ensuring that they are paid for the work that they have done over time, but also that the DAO would now attract important talent to fill up important roles. This will only increase the efficiency of well-oiled machinery. It is important to note that recently, a draft was passed with 88% votes in a proposal to increase the committee members' strength from 3 to 5. While this has not been escalated to a governance proposal that could be formally enacted, it has still been voted upon and once escalated, has a high potential to be voted upon in favor of increasing the committee strength to 5 members. 🤝🏼
This would further mean that these 5 members would all now get paid as per the DAO Committee Compensation Resubmission Proposal, discussed above. The DAO seems to be moving in a direction of increasing the number of people that can have a say over the governance and thereby improving the accountability of the Decentraland DAO. It seems to be the case presently that there is definitely a stronger DAO model that we are looking at for the future wherein the key committee members or the core, are actually compensated for the hours that they put in. Working voluntarily can only take you so far, right? 🚀
Signup for our monthly newsletter and get your own copy of the DAOstruct DAO Handbook 2023 right in your mailbox