Governing Principles (Part III)
Three Things #176: June 29, 2025
Here are three more guiding principles for the design of House of Stake, and for DAOs more generally. See also Part I and Part II.
Thing #7: Build Trust the Old Fashioned Way 🤼♀️
Most of the delegates, and a few other House of Stake stakeholders, are meeting face to face in Cannes this week alongside the EthCC event. We’ve already faced criticism for this decision, on the grounds that it’s expensive and unnecessary. This is understandable but I think it’s misguided. I want to address that criticism head on and explain my logic.
Yes, there’s a cost associated with meeting face to face. For most of the attendees it requires traveling quite some distance: for some it’s three flights and well over 20 hours of travel. There’s the cost of all of those flights, local transportation, accommodation, food, etc. There’s the lost productivity versus if we had all just stayed at home.
But there’s also a cost to not doing this, and that cost is hidden. That’s one of the issues here: there’s a major asymmetry between explicit and implicit costs. It’s easy to criticize the explicit costs because they’re known and transparent. This is a common issue in companies and projects: the cost of action vs. the cost of inaction. Often the cost of inaction is much greater than the cost of action, once you factor in everything else, including second order effects. But, again, the cost of inaction is hard to see.
In this case, in my opinion, the cost of inaction is far greater than the thousands of dollars we’re going to spend getting key stakeholders together into a room together, and in the same space for a few days. How great? I think House of Stake wouldn’t work without it. In other words, my professional opinion is that the cost of not meeting face to face would be the entire project. We’ve spent much more already on things with a lower return value, i.e., things that House of Stake could survive without. It seems a no brainer to spend less on something so straightforward and so valuable.
Why is this so important? Call me old fashioned, but I believe that humans can only truly build trust in person. This has been my personal experience over many years of in person, remote, and hybrid work. Remote work is totally fine for sustaining existing, trusting relationships, and for continuing to execute when one’s role and task are already clear. For everything else, you need to be face to face or you die. Full stop. No exceptions.
I’m sure many people will disagree with me, and this is probably a controversial opinion in our industry and in our community, but I will die on this hill: it’s simply not possible to form real, meaningful, professional, trusting relationships with other people who are mere pixels on a screen, or worse, text attributed to a pseudonym. You might think it’s possible, but it’s not, not compared to the real thing.
The projects and teams I’ve been a part of that insisted on fully remote work, and that didn’t gather face to face often enough, without fail all died. Every single one of them. Why? Various reasons, but they all boil down to a lack of trust. Trust is a catalyst for literally everything else that we need to do together. It’s the superpower that makes a team functional and high performing, above almost all else. If you don’t have real trust, you’re going to die, and, for now, the only way to build real trust is face to face. In my opinion this is the single biggest reason why DAOs fail, and why online governance tends to be such a disaster. Things that would be trivial to work out in person blow up into wars because of a simple lack of trust and understanding.
How often do teams need to meet face to face? Of course it depends on the team and the project, but the absolute minimum is a few days once per quarter. That pace is sustainable; anything less isn’t. Anything less and you’ll inevitably begin to think of your colleagues less as fellow humans and more as mere means to an end. It’s just human nature. Even relatively strong, trusting relations do fade over time, which is why regularity is so important.
I very much want House of Stake to succeed, which means that in my personal opinion its stakeholders are going to have to gather face to face every so often. There’s no way around it. I’ll even go so far as to say that, in my opinion, people who aren’t willing to or aren’t interested in meeting face to face shouldn’t have a seat at the table. Yes, travel is cumbersome and expensive, and for those of us with families, and for those with less than ideal passports, there are logistical barriers, but in my experience there are always creative ways around these obstacles. (It’s important that I always reiterate that this is just my personal opinion and that I’m not in charge of House of Stake. It’s for the community to decide.)
The gathering this week is small and preliminary, but it’s a critical first step in building a functional, trusting governance apparatus. I’m excited by the thought of future House of Stake gatherings and, someday, maybe even a HoS Convention.
Thing #8: Permissionlessness 🔓
When we think of governance, we don’t tend to think first and foremost of permissionlessness. It’s not like you can just walk up to the front door of Congress or Parliament, or randomly decide to join a legislative session. It’s extraordinarily difficult for a private person to contribute to real world governance at any level in any domain: corporate, political, local, national, or international.
There are many differences between default world governance and on chain governance, but this is the biggest: on chain governance can and should be permissionless. Permissionlessness is, after all, one of the true superpowers of blockchain. In the same way that the true, deep, most important innovation of Bitcoin was a permissionless solution to the Byzantine Generals Problem, which involved replacing identities with hashpower, the biggest innovation in on chain governance is that, in fact, anyone can participate.
This is what makes blockchain so exciting, and it’s what makes me excited to work on it every day! I spent most of my life and most of my career in permissioned systems, and I found them dismal, sad and unappealing. The old, default world is one of gatekeepers and credentialism, where unaccountable companies and faceless three-letter agencies make decisions on our behalf, robbing us of, well, agency. Blockchain fixes this, at least in theory. Anyone, anywhere, can build not only an app on top of a permissionless protocol like Bitcoin or NEAR, but indeed an entire bank, or a protocol of their own. The notion of permissionlessness is admittedly nuanced and a bit hard to understand, but once you get your head around why it’s so important and so powerful, you can’t unsee it.
The same goes for governance. I want to live in a world where everyone’s voice matters, regardless of where they happen to have been born, which language they happen to speak, how wealthy or educated they happen to be, etc. I can’t imagine a world that’s more meritocratic or, indeed, more democratic: a “do-ocracy” where anyone motivated enough can roll up their sleeves and begin adding value, without asking or needing permission. And today for the first time we have the tools, techniques, and resources to build such a world.
Indeed, that’s what we’re working on at House of Stake. You can write proposals, you can help improve existing proposals, you can build new tools or improve existing ones, you can help organize the community; there are literally a thousand different ways you can contribute. The point is, you don’t need anyone’s permission to contribute! This isn’t theoretical: a number of the most prolific, productive contributors toay just dove in and began creating value without being explicitly endorsed or authorized. You can even fork the entire thing if you so desire.
Yes, we do have certain appointed roles within House of Stake: the Steering Committee, Security Council, Endorsed Delegates, etc. But it’s important to note that all governance is still permissionless. You don’t need to be endorsed and you don’t need permission to become a delegate: you can simply start campaigning and ask people to delegate their voting power to you. You don’t need permission to submit a proposal: you can just jump into the chat groups and forum and begin putting good ideas out there, or submit them for on chain voting.
While permissionlessness is a superpower, it’s worth pointing out that it’s also our great weakness and our great challenge. The main reason is that it leads to some difficult questions, including questions of Sybil resistance and filtering spam, but there are reasonable workarounds for these issues, and we intend to experiment with new ones at the fringes of the possible.
HoS is a do-ocracy and everyone is welcome to contribute. If on chain governance, and the intersection of governance and AI, are interesting, I encourage you to learn more and get involved. Without begging permission!
Thing #9: Minimum Viable Process 🤏
Let me get one thing straight: I really, really dislike process. I dislike doing things just for the sake of doing them, or because someone else wants or expects me to. I dislike process so much because it’s the antithesis of agency. When I do things, or when we do things as an organization, it should be because we decided to do them and because we have a good reason to do them, and not for any other reason.
And yet, I see both sides of the story. There are certain high stakes scenarios where process makes a lot of sense: the most famous of these is the pilot’s checklist, which has been replicated in other high stakes fields such as medicine. There’s something to be said for standard operating procedures even in lower stakes scenarios because they do prevent many failure scenarios, and they requires less cognitive energy. And, as frustrating as it may be, processes are by definition egalitarian (or, at least, they should be): everyone should have to go through the same process to, say, get a driver’s license or a medical license, regardless of how wealthy or privileged they may be in other ways.
As with so many things, it’s a balancing act. The goal, then, for any organization, as I see it, is to put in place the minimum viable process needed to ensure that standards are upheld and that everyone plays by the same rules, while not installing so much process that it chokes productivity or creativity. Precisely where that sweet spot lies is an art, not a science, and every organization and every team will have to discover it for themselves through experimentation.
A great example, and a good starting point for many teams, is meetings, which nearly always kill productivity. There are many schools of thought on how best to make use of meetings, but I recommend cancelling literally all recurring meetings, and then only carefully re-adding the most essential ones. Here are a few rules of thumb: Almost all coordination can be done asynchronously. Almost no scheduled meeting should exceed about 25 minutes. Almost no meeting should have more than 4-5 participants. Effective teams do not need to formally meet more than once a week for a brief standup. When possible, meetings should be taken as standing or walking meetings. And every meeting should have a clear agenda, a specific task (not an “update” and not making a decision), and a clear goal outcome.
With respect to governance, structure and process play another important role: they level the playing field and make the governance process legible and approachable to as many people as possible. There’s a well-known, well-studied effect that kicks in in the absence of this structure, known as the Tyranny of Structurelessness. I encourage you to study it because it’s one of the most important ideas in governance and, indeed, in sociology. The idea in a nutshell is that, wherever humans fail to designate an official decision-making structure, a de facto structure nevertheless emerges, and it turns into a shadow oligarchy on the part of a handful of elites. The Iron Law of Oligarchy is a closely related effect that, in my experience, is also very real.
What does this mean for House of Stake? First and foremost, it means that we need a constitution with a clear set of policies and procedures involving things like adding, removing, and replacing delegates, along with a code of conduct and graduated sanctions for violations. This is a minimum viable set of governing documents and it simply ensures credible neutrality: i.e., that the rules are known to all, and that everyone plays by the same set of rules.
It also means that we don’t want more policies or procedures than are absolutely necessary. We want to encourage experimentation, innovation, and, indeed, we want people to not be afraid to roll up their sleeves and get involved in governance. That means we don’t want to smother House of Stake in bureaucracy or cumbersome procedure.
This is especially true for things that sit outside the core constitutional areas. The existing working groups established by the delegates are a great, positive example of ad hoc governance working well. They’re not mentioned in the original design proposal. There was no mandate to create them, it happened at the initiative of and thanks to the creativity of a handful of delegates. There’s no official policy for creating or governing a working group. They have no official role to play in governance, at least not for now. And yet, so far, in the present absence of official voting, they’ve been the most active, most successful governance mechanism we have.
I’ll take every opportunity to ensure that HoS puts in place a reasonable, minimum viable process, and also to complain loudly every time unnecessary process is added. I encourage you to do the same.