My brief history with Makerdao: the group caught my attention in November 2017. I had just learned about the ethereum blockchain a few months ago and the near infinite possibilities began capturing my imagination. A uniqueness about the Maker community struck me early on, characterized as an extreme willingness and enjoyment of complex debates concerning the protocol’s nascent mechanics and rigor. This fresh, eclectic, yet electric, atmosphere attracted myself and many others when other communities were ravaged by the bull hysteria of 2017.
In these communities, after you ask enough questions, a certain pressure to build sets in. In crypto, software dominates the mind and capital share, so I figured to try that route. Turns out I hate computers, so that took care of that. I still wanted to contribute, but wasn't quite sure how I could. After the foundation principles were first ratified I started to muse about the first principle: “Scientific Governance”.
The principle of Scientific Governance quickly started to bother me. While intriguing, I could not articulate a perceived hollowness. I eventually realized science's abstract goals and wide areas of inquiry weren't (and cannot be) totally engaged. In Maker I saw a very specific application of evidence/observation based reasoning. Touting this as “science” neglects the real scope of information science interpretes reality with. I eventually decided that either Maker needed to drop the scientific governance stance (which is a reasonable road to take, embodying “science” as a first principle of actions is an extreme, cumbersome and abstract burden) or go deeper into what that pursuit really means. In this series I begin that descent.
The foundation’s own description of “Scientific Governance” reflects this inaccurate paradigm, from the Foundation Principles:
The Maker Governance Framework will be built on rigorously vetted, reproducible, scientific models created by experts with proven track records in the traditional finance space….In this model, neither the MKR holders nor the Maker Foundation will have any special powers to arbitrarily dictate the risk parameters of the system, they can only affect changes through fact-based, provable, scientific arguments.
Reducing “Scientific Governance” to the “Traditional financial space” clearly neglects computer science, technical informational protocols (oracles) and social organizational structures required to effectively govern any blockchain based protocol. Next, the claim that MKR holders hold no special powers in the protocol is not true. MKR holders enjoy one of the highest degrees of authority in the protocol, through the MkrAuthority contract, they only require Ethereum Miners to keep integrity. Only MKR holders can modify the technical structure and variable parameters in the smart contracts. To approach the meaning of Scientific Governance, we must understand what groups hold power capable of directly influencing the system. Broadly I think the Foundation agrees, and wishes MakerDao to use a rigorous framework to understand reality. This makes sense for an organization managing a central stable currency backed by assets represented on the blockchain. To evaluate assets and their function in Maker we want an evolving framework aiming to interpret reality. Currently, “Scientific Governance” is the leading principle to guide construction of that framework.
The Above can be viewed as a minimally viable introduction to my perspective. No attempt was made for capturing a specific interpretation of scientific governance.
The goal of MakerDao in one sentence: create a robust unit of account capable of use in the global economy. The unit’s name is DAI, DAI is debt generated from assets. MKR token holders control the protocol that creates DAI. The protocol runs on the ethereum blockchain. From there the rest goes. The concept of scientific governance is employed to shape a governance ethos. Here is my basic description of scientific governance: A reflective framework for Maker to analyze itself, the world around it, and the relationships between the two. A similar phrase for capturing the same point is risk management. Maker can not develop a comprehensive framework for analyzing reality without acknowledging the fundamental issues analyzing reality posits, many of which lead back to basic questions of perception and consciousness. MakerDao obviously won’t nor should solve those problems, but at the least we need a communicable understanding on what sort of knowledge we deem useful and what processes of acquiring that knowledge are acceptable.
So what differentiates between the self, nonself and “relationships between the two”? Distinguishing between the self and non self comes down to limits in control. The self refers to what MakerDao controls and the non self refers to what MakerDdao does not control. Analysis of the self involves descriptions of what MakerDao controls and how. Analysis of the non self involves descriptions of what Makerdao does not control and how those structures work. The third component requires analysis of the emerging relationships between what we control and what we don't.
MakerDao consists of structures which facilitate interaction and communication towards various goals. Understanding those structures requires different domains of concern such as, but not limited to, finance, software engineering, organizational design, game theory, sociology, political philosophy, leadership studies and biology. We also may not fully understand the structures that we employ (especially social structures) and evolving relationships offer changing dynamics, so some mystery is ever present.
The controllable technical and social interactions broadly encapsulate the “Self” component of the protocol. Core smart contracts and other technical infrastructure are encompassed by the mechanistic patterns they follow and variables they hold. The human interactions can manifest themselves in the technical protocol, eventually determining what, why, and how changes occur. Domain workers (risk, smart contract, governance and oracle teams), engaged individuals, and MKR voters primarily power these interactions. For example, technical improvements require someone or a group with the knowledge and skills to do specific work, that work generally is communicated/recognized by the governance ecosystem, and must be implemented into the technical protocol by MKR voters through an executive vote. On the social side greed upon goals, ambitions, and roadmaps express an internal field of everyone's desire for Maker’s growth. It is controllable in the sense that each individual in the organization can choose to agree or walk away. Work created by different domains utilizes different coordination behaviours and mechanisms, so governance must learn how to interface with these internal behaviors and mechanisms to successfully organize them for MKR voters to make decisions. Technically MKR voters do not require this auxiliary governance structure, yet so far no alternative non-official executives have been proposed or passed.
An ongoing question remains, what relationship does MakerDao desire with DAI and vault owners in general? If MakerDao wishes to incorporate their perspectives, then governance will need to figure out how and what boundaries to impose. While governance does not hold special powers over the DAI token contract , it certainly influences its market behavior through various parameter adjustments. MKR holders control vaults significantly more. Collateral could be stolen by a malicious DAO and all risk parameters are vulnerable to governance adjustments with short notice (currently a 4 hour delay exists for all governance changes). Examples include predatory stability fees, reduced debt ceiling, abrupt changes in liquidation ratio, while unlikely, vault owners should be cognisant of this exposure. I expect these two groups will eventually demand more formal representation in governance due to the control MKR holders can utilize. Collateral in vaults appears to fall on the side of the self, while dai holders slightly towards the nonself. Keep in mind the Emergency shutdown severely affects both groups.
Broadly put, The “non self” (for now) includes the greater ethereum ecosystem, crypto and large global fluctuations. These are some of the larger scale hierarchical influences on MakerDao. Ethereum’s present technical, economic and social state directly influences how MakerDao functions. The wider crypto and global dramas influence ethereum itself. The details on how this occurs are the object of further inquiry. Also, as Maker diversifies its collateral portfolio, specific contexts relating to those collateral types will also start to influence the protocol's decisions.
Groups external to MakerDao also rely on and interact with the Maker protocol.They contribute capital and effort to build products that interact with the protocol for a variety of reasons. Many decisions by governance directly affect their products and the utility of those products. An extreme and important example is Emergency Shutdown which would break all external integrations with the protocol. The Maker community itself holds uncertainty around how and when to use Emergency Shutdown, so open ongoing engagement with these groups may help a stronger ecosystem wide consensus on how to use this and other powerful tools. The Defi ES consortium shows some initiative in this regard. Longer term, MKR governance should be generally cognisant of how to interact with external stakeholders as well as general perceptions of the protocol.
Maker, similar to biological cells with their semi permeable plasma membrane, shows constant (and often rapid) interaction/exchange between the internal and external systems. Continuous interactions power dynamic relationships which steer the movements of the protocol. These constitute the somewhat abstract “emergent” phenomenon of a complex self organizing system. Recent events crystallized the abstract; we witnessed market behaviour (sociology/finance), the state of ethereum (technical structure), political tensions (social/financial), auction (technical structure), and biological capacity of the critical domain workers intersected in an unpredicted storm of happening. The interdisciplinary academic field of Complexity holds plenty of valuable information for understanding this sort of interdependent behavior.
In the longer term after deeper study of the protocol, modeling with tools like agent/systems based simulation can help tease these structural relationships apart. My personal goals are to continue writing in deeper detail on the topics above, use those studies to publicly inform my opinions on Maker, and uncover more information to help strengthen our understanding of the system.
Scientific Governance is a monumental task, but fitting for an organization aiming to evolve global monetary paradigms. In sum, I am viewing scientific governance as a dance which aims to balance the protocol through knowledge of self, nonself and the relationships between the two. This document serves as an introduction to future, more detailed works, focusing on specific aspects of the protocol and the academic literature relating to those aspects. This will include, in no specific integration, examinations of organizational design (what hierarchies exist and how, technical and social), Risk’s financial models, technical structures, ethereum itself, MKR distribution, domain team structure/compensation, social and biological realities of our human composition.
FUN Preview...maybe...maybe not? Dealing with Consciousness...rough sections… gives context on some of my perspective, especially the biological stuff.
A brief note on my usage of academic texts. I approach all information I come across for what it is, information. An academic publication gives no intrinsically “truer” information than anything else. I mainly find academic texts useful because the authors generally think hard about the information they present and explain how they came across that information. This deep thinking helps develop my understanding. If an item of information does not develop my understanding it is useless for me and will not appear here.
What sort of information do we leverage for actions? And, how should we go about analyzing that information? To start dealing with those questions, some philosophical and biological comments on the constitution of knowledge may provide more context. Groan all you want, but remember by definition, if you want to study how humans behave and perceive, then you need a model of how consciousness works.
Traditionally epistemology, the study of knowledge, focuses on “how an individual acquires knowledge through his senses, memory and reasoning.” (ADD IT). The roots of this sort of question likely extend deeper within human history than anthropological records can account for.
I found these three oppositional interpretations of reality, Realism, Contextualism and Relativism, useful insofar to grasp the different perspectives describing the nature of people's shared realities.
The view that knowledge is constructed base and that individuals experience a negotiated, consensual reality within a specific context
Cunningham and Fitzgerald, 1996 ; Feldman, 2003 ; Rescher, 2003 
The view that individuals construct a unique knowledge base and experience a unique reality even within a shared context
Cunningham and Fitzgerald, 1996 ; Feldman, 2003 ; Rescher, 2003 
Moving to social epistemology, which captures the social or group process of knowing. In the broad case of a human governed “Decentralized Autonomous Organizations” use social and technological understandings to inform the decision making process.
Socially inclined philosophers argue that knowledge acquisition rarely occurs in isolated conditions. Instead of just the individual, we must grapple with the collective’s epistemological process to practice governance at Maker. The two main aspects of technologically based social knowledge highlighted by Godler, Y. et al, are integration and aggregation. They describe integration in terms of online deliberation, involving human judgments and uncertain outcomes. Aggregation describes algorithmic, or otherwise predetermined collection and refinement of information (Godler, Y., Reich, Z., & Miller, B. (2020)). In crypto significant complications deepen this dynamic.
The technological nature of blockchain as the esteemed source of knowledge in crypto communities provides a construct which modern epistemology remains ignorant of.
However basic aspects of epistemology, such as the linear relationship between sense and reason, face significant rebukes from other fields. Lisa Feldamn Barret, a prominent neurobiologist, challenges the basic stimulus-response model which neuroscience and philosophy build themselves from. In their view, learning and experience, transmitted from sensory organs stimulates neuronal activity as the information is received. Barrett and company have compiled and uncovered information strongly suggesting that that brain does not work in this manner. Alternatively, they contend that the brain instead acts as an “active inference generator” in which neurons continuously simulate and predict incoming internal and external stimuli. Here multiple concurrent simulations provide the basis of the brain's analysis of past experience in relation to energetic/physiological trade offs (Barrett, Lisa & Simmons, William. (2015)). Perhaps best put herself:
I hypothesize that, using past experience as a guide, the brain prepares multiple competing simulations that answer the question, ‘what is this new sensory input most similar to?’ (see Bar, 2009a,b). Similarity is computed with reference to the current sensory array and the associated energy costs and potential rewards for the body. That is, simulation is a partially completed pattern that can classify (categorize) sensory signals to guide action in the service of allostasis. Each simulation has an associated action plan. Using Bayesian logic (Deneve, 2008; Bastos et al., 2012), a brain uses pattern completion to decide among simulations and implement one of them (Gallivan et al., 2016), based on predicted maintenance of physiological efficiency across multiple body systems (e.g. need for glucose, oxygen, salt etc.). (Lisa Feldman Barrett The Theory of Constructed Emotion: an active inference account of interoception and categorization (2017))
This hypothesis holds profound implications for the study of emotion and behaviour. Instead of archetypal fingerprints of emotions existing somewhere in our biological underpinnings, they may be constructed by constantly simulating, predicting neural networks, which operate based on past experience and present physiological conditions. Physiology of behaviour is an extremely complex, rich field, which helps reinvent decaying philosophical preconceptions of reality. For further reading I recommend Barret's book How Emotions are Made and Robert Sapolsky’s Why Zebras Don’t Get Ulcers.Modern neuroscience certainly holds value for an organization such as Maker, which has large stakes in human behaviours.
For a little more food for thought, let's turn our focus briefly to a biologist's perspective on the immaterial dimensions of life. Arnold De aloof, starts by reflecting on a somewhat straightforward question: if the mind or “soul” are classified as immaterial, then we should ask how could something immaterial exist at all? Aloof notes two physiological phenomena, electric charge, and information exchange, as potentially fitting the bill.
I won't go into his work in much more detail, but the essential aspect of this interpretation places communication as the ecompassment of life (primarily propagated in electrical manifestations). He then gives unambiguous definitions of “alive” vs “not alive”. In short, what is alive communicates, and what is not alive will not on its own. This definition holds fascinating implications for understanding technological systems as they grow in complexity and ability.
To highlight his point a bit more explicitly, the so-called “inanimate” materials of the outside world hold no fundamental difference to material in “animate” life. The difference is the behaviour of the material. For example, metals such as Magnesium and Calcium are essential carriers of ionic charge used in diverse biochemical reactions, but by themselves they express very little communicative behaviour. In certain organized biological systems they facilitate a great symphony of dynamic responses across a hierarchy of organization (organelles to cells, organs, organisms and populations). For a definition of “biological communicating compartment”:
A biological communicating compartment, or simply “compartment,” is a unit based on carbon chemistry and on electricity carried by inorganic ions. This unit
- is limited by a moderately “leaky” boundary with appropriate “holes;”
- can stockpile the right form(s) and amounts of energy;
- can generate gradients that can be used for communication for the purpose of enabling the
- compartment to function from its lowest to its highest level of compartmental organization (see later).
I’ll leave this thread here, but I highly recommend reading his work. (De Loof, Arnold. “The cell's self-generated "electrome": The biophysical essence of the immaterial dimension of Life?.” )
I am guessing that there is no such thing as exonerating proof of knowledge or belief, in my view, Infinity/zero, a concept highly leveraged by both science and spirit, contends no limit; thereby reducing the relative importance of reasoning concepts like “prediction power”, since a infinity can always throw a curveball.
So now that we are sufficiently confused, if anything is clear from the above, it’s hopefully that science has a lot more work to do. However for our purposes, we can appropriate science’s work to deal with more relevant questions.
Godler, Y., Reich, Z., & Miller, B. (2020). Social epistemology as a new paradigm for journalism and media studies. New Media & Society, 22(2), 213–229. https://doi.org/10.1177/1461444819856922
Barrett, Lisa & Simmons, William. (2015). Interoceptive predictions in the brain. Nature reviews. Neuroscience. 16. 10.1038/nrn3950.
Lisa Feldman Barrett (2017), The theory of constructed emotion: an active inference account of interoception and categorization, Social Cognitive and Affective Neuroscience, Volume 12, Issue 1, January 2017, Pages 1–23, https://doi.org/10.1093/scan/nsw154
De Loof, Arnold. “The cell's self-generated "electrome": The biophysical essence of the immaterial dimension of Life?.” Communicative & integrative biology vol. 9,5 e1197446. 1 Jul. 2016, doi:10.1080/19420889.2016.1197446