Governance: Achieving reliable decision-making through diversity and numbers

In this article, we dive into a bit of social epistemology and explore how large numbers, individual reliability, and diversity play a part in ensuring reliable governance in the enterverse. logo
@enter.artPUBLISHED 27TH JUNE 2023

Can a ragtag group of NFT enthusiasts, degens and artists even govern an NFT marketplace efficiently? Wouldn’t it be better to rely on a select few competent and homogenous individuals to make the decisions for everyone? These are natural questions to sit with after the announcement of Project Symbiosis. To begin to address questions like this, we ought first to ensure our social epistemological foundation. Many social epistemologists argue that large numbers and diversity are clear advantages to ensuring reliable group decision-making. 

In any social epistemological setting, one of the biggest questions is that of aggregational procedures; how do we turn a myriad of binary votes into a proper community consensus? We’ll utilize the simple majority procedure for most of the decisions the enter community will face. In this framework, the community can pass any proposal for which they can successfully achieve a majority. 

Strength in numbers

Regarding the protocol’s purpose of growing volume to critical mass, we assume that any governance proposal has a right or wrong answer. Passing a governance proposal can either positively or negatively affect the protocol’s purpose.

We can assign every governance participant a theoretical reliability p between 0 - 1; one means they make the right decision every single time, and 0 means they make the wrong decision every time. Utilizing simple majority as our primary aggregation procedure, the theoretical reliability of an individual has profound implications for the overall reliability of the group due to the mechanics unveiled by numerous jury theorems. 

If we assume that the individual governance participants have a reliability p > 0.5, then the group’s overall reliability grows as the group grows - meaning, the more participants, the better decisions. This holds water under three assumptions; that the individual voter has p > 0.5 (they must be better at making decisions than heads or tails), that every individual votes independently, and that every individual votes in good faith (i.e., for what’s best for the protocol). As mentioned above, the effects of this dynamic are indeed quite profound, and it does not take more than 200 people with an average reliability of 0.6 for the group’s reliability to approach 0.9 - meaning it makes the right decision in 90% of the votes. 

We strongly believe that the enter community is better at making decisions than heads or tails, so ensuring a minimum level of competencies should be viable. Via the ve structure, which closely aligns the interests of individual participants with that of the protocol, we have the correct measures to ensure good faith participation. That leaves the issue of voting independently. 

To ensure reliable governance decisions in the enterverse, every voter must decide from an informed position. This is because the overall reliability of the group is, in part, determined by the number of active governance participants. If Participant A merely votes for what Participant B votes for, then they only count for 1 participant when it comes to ensuring reliability in a group setting. 

As you can tell, the vote delegation feature is important in this framework. Delegating your votes to another participant must always be done for the right reasons if we are to ensure reliable governance.

Let’s assume Participant A has low reliability ( p < 0.5 ) and Participant B has high reliability ( p < 0.5). If A delegates their votes to B, then the group reliability increases. If B delegates their votes to A, then the group reliability decreases. With this in mind, vote delegation can improve group reliability, but it can also diminish it, depending on the way governance participants use it. Governance participants should only delegate their votes to participants that show competencies and reliability in decision-making. 

A challenge to ensuring reliability in decision-making for Project Symbiosis is that every voter has a different amount of voting power. In fact, voters with more $ENTER tokens or voters who choose to lock up their tokens for a longer duration will have more weight than those who do not. 

This means that some individuals’ reliability will affect the group’s overall reliability more than others. Specifically, individuals with more veENTER will have a bigger effect on the overall reliability than individuals with less veENTER. This can seem counterproductive to achieving reliable governance. Still, it is a compromise that serves to align the economic interests of the governance participants with that of the protocol and to create proportionality between different users’ commitment to the protocol and their influence on it. While there is a small risk that unreliable voters (p < 0.5) achieve more influence than their reliable counterparts (p > 0.5), it seems prima facie that there will be a correlation between voters’ ability to amass $ENTER tokens and their reliability in decision-making. Nevertheless, compromises must be made when designing proper governance protocols. 

Strength through diversity

The individual reliability of governance participants is not the only factor influencing the group’s overall reliability. As Hong and Page show in their framework for modeling functionally diverse problem-solving agents, diversity can play a large role in securing effective group decision-making. In fact, Hong and Page go as far as stating that [functional] diversity trumps ability. When we talk about functional diversity, we refer to heuristics - or decision-making strategies, i.e., how an individual approaches the task at hand. 

Their models show that groups of functionally diverse people can consistently outperform groups of homogenous high-performers. This is usually explained by reference to the fact that groups of functionally diverse individuals each bring something different to the table and are, as a result, better equipped to view a decision from different perspectives. As such, they gain something from being in a group setting that homogenous high-performers would not: perspective. 

While homogenous high-performers are experts in their fields and skilled at making good decisions, functionally diverse groups can cover more ground and consider more factors in decision-making. As a result, groups of functionally diverse individuals benefit from being in a group setting and perform better in larger groups. In contrast, high-performing homogenous individuals usually perform the same, with or without a group of peers. 

This prompts the question of how we ensure diversity in heuristics for governance participants. Luckily, there seems to be a strong correlation between diversity in functionality and diversity in socioeconomic factors. With this in mind, ensuring diversity in socioeconomic factors will usually result in a diversity of heuristics. 

All in all, there are several benefits to leaving governance to a large, competent, committed and diverse group of individuals. If we’re better at making decisions than heads or tails, and if we can achieve a sufficient representation of diversity in governance, we’ll be able to successfully and reliably make decisions that work for the good of the protocol.

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