Blockchains and, more recently, DAOs (Decentralised Autonomous Organisations) can be described as complex socio-technical systems where groups of people interact with distributed protocols and digital technologies at different scales. The complexity of both blockchains and DAOs can be described in relation to scale and, as Siegenfeld and Bar-Yam have noted, this is ultimately a decision about which level of detail we may want to provide when describing them.
While blockchain protocols are deterministic and exhibit low complexity at the micro-scale, if we zoom out to observe the interactions between different layers (L1, L2), specialised chains, or modular services, complexity will start to emerge.
The conclusion that “complexity depends on scale” and, ultimately, that “characterizing a system requires understanding its complexity across multiple scales” (Siegenfeld and Bar-Yam) also applies to political systems. Nassim Nicholas Taleb’s postulates this idea as Principle 1 in his Scala Politica: “never describe, compare, or assess the effectiveness of political systems without reference to scale”. Likewise, Taleb’s uses the notion of “fractal localism” to refer to the “tangible fractal gradations” that can be found between the individual and the collective levels.
At a very high level, blockchains exhibit two basic properties of fractals as conceptualised by Mandelbrot: self-similarity and recursion. The secondary chains stemming from the parent blockchain (image on the right below) develop in a self-similar fractal pattern (see the Mandelbrot set image on the left) to increase the scalability of the overall system.
Fig 1. Blockchains as fractals
At a meso level, sharding has recently emerged as the partition method chosen by the Ethereum blockchain that creates shard chains to upgrade the scalability of the network. At a micro level, cryptography innovations such as recursive or scalable zk-SNARKs apply recursive calculations to improve the scalability and efficiency of zero-knowledge-proof algorithms.
If fractal-like properties can be found at different levels of blockchain socio-technical systems, it should come as no surprise that a few projects have looked at fractals for architectural inspiration. Arthur Brock and Eric Harris-Brau (Holochain/Ceptr) explicitly acknowledge in their Ceptr concept paper that “fractal patterns of trees, leaves, and circulatory systems offer us lessons about distribution and routing”.
When it comes to the governance of blockchain systems, Eden is currently implementing a model of “fractal democracy” that draws from Daniel Larimer’s book More Equal Animals. In October 2021, the Eden community held its first on-chain “fractal democracy election” to select community delegates.
Also in 2021, Yearn Finance approved a proposal for a new governance system to expand decentralisation. The system is based on “constrained delegation”, where YFI token holders delegate their governance powers to autonomous groups (y-teams). These groups have emerged organically, are able to choose their own consensus mechanisms, and work independently. At this stage, their decisions are executed on-chain by the Multisig team, which retains the execution and veto powers.
Fig 2: Yearn Finance Governance 2.0
The Yearn Finance team mentions in their proposal its collaboration with Orca protocol in the design of their governance model, which is open to the creation of more y-teams as it evolves. The Orca protocol denominates this organic process “podifying”: “pods” are also working groups, but rather than organised around different powers, as it is the case with y-teams, they coalesce around expertise. The other difference with regard to y-teams is that each pod has its own multi-sig wallet (rather than one centralised treasury). In this way, the Orca ecosystem can be expanded with pods that can be conceived of sub-DAOs.
As DAOs communities grow, the DAO ecosystem matures and new consensus and coordination mechanisms develop further, we may see different iterations of fractal governance in place. Whether these will be translations of the well-established subsidiarity principle in the DAO espace or will result into innovative forms of “fractal localism” remains to be seen. In any case, it is an interesting area to watch for the governance of decentralised technologies.
For a practical discussion on creating a DAO community as a precinct, register here to attend our online event that proposes to ‘Re-image precincts in a Digital CBD’ on Thursday 7 April at 1 pm AEST