The Metaverse’s Thirtieth Anniversary: From a Science-Fictional Concept to the “Connect Wallet” Prompt

in Philosophy and Technology (2023), 36

The metaverse is equivocal. It is a science-fictional concept from the past; it is the present’s rough implementations; and it is the Promised Cyberland, expected to manifest some time in the future. The ... [more ▼]

The metaverse is equivocal. It is a science-fictional concept from the past; it is the present’s rough implementations; and it is the Promised Cyberland, expected to manifest some time in the future. The metaverse first emerged as a techno-capitalist network in a 1992 science fiction novel by Neal Stephenson. Our article thus marks the metaverse’s thirtieth anniversary. We revisit Stephenson’s original concept plus three sophisticated antecedents from 1972 to 1984: Jean Baudrillard’s simulation, Sherry Turkle’s networked identities, and Jacques Lacan’s schema of suggestible consumers hooked up to a Matrix-like capitalist network. We gauge the relevance of these three antecedents following Meta’s recent promise to deliver a metaverse for the mainstream and the emergence of blockchain-oriented metaverse projects. We examine empirical data from 2021 and 2022, sourced from journalistic and social media (BuzzSumo, Google Trends, Reddit, and Twitter) as well as the United States Patent and Trademark Office. This latest chapter of the metaverse’s convoluted history reveals a focus not on virtual reality goggles but rather on techno-capitalist notions like digital wallets, crypto-assets, and targeted advertisements. The metaverse’s wallet-holders collect status symbols like limited-edition profile pictures, fashion items for avatars, tradable pets and companions, and real estate. Motivated by the metaverse’s sophisticated antecedents and our empirical findings, we propose a subtle conceptual re-orientation that respects the metaverse’s equivocal nature and rejects sanitised solutionism. Do not let the phantasmagorical goggles distract you too much: Big Meta is watching you, and it expects you to become a wallet-holder. Blockchain proponents want this as well. [less ▲]

Decentralised Finance's timocratic governance: The distribution and exercise of tokenised voting rights

in Technology in Society (2023), 73

Ethereum's public distributed ledger can issue tokenised voting rights that are tradable on crypto-asset exchanges by potentially anyone. Ethereum thus enables global, unincorporated associations to ... [more ▼]

Ethereum's public distributed ledger can issue tokenised voting rights that are tradable on crypto-asset exchanges by potentially anyone. Ethereum thus enables global, unincorporated associations to conduct governance experiments. Such experiments are crucial to Decentralised Finance (DeFi). DeFi is a nascent field of unlicensed, unregulated, and non-custodial financial services that utilise public distributed ledgers and crypto-assets rather than corporate structures and sovereign currencies. The inaugural Bloomberg Galaxy DeFi Index, launched in August 2021, included nine Ethereum-based projects – non-custodial exchanges as well as lending and derivatives platforms. Each project is governed, at least in part, by unregistered holders of tokenised voting rights (also known as governance tokens). Token-holders typically vote for or against coders' improvement proposals that pertain to anything from the allocation of treasury funds to a collateral's risk parameters. DeFi's governance thus depends on the distribution and exercise of tokenised voting rights. Since archetypal DeFi projects are not managed by companies or public institutions, not much is known about DeFi's governance. Regulators and law-makers from the United States recently asked if DeFi's governance entails a new class of “shadowy” elites. In response, we conducted an exploratory, multiple-case study that focused on the tokenised voting rights issued by the nine projects from Bloomberg's inaugural Galaxy DeFi index. Our mixed methods approach drew on Ethereum-based data about the distribution, trading, staking, and delegation of voting rights tokens, as well as project documentation and archival records. We discovered that DeFi projects' voting rights are highly concentrated, and the exercise of these rights is very low. Our theoretical contribution is a philosophical intervention: minority rule, not “democracy”, is the probable outcome of token-tradable voting rights and a lack of applicable anti-concentration laws. We interpret DeFi's minority rule as timocratic. [less ▲]

Transition Pathways towards Design Principles of Self-Sovereign Identity

in Proceedings of the 43rd International Conference on Information Systems (ICIS) (2022, October)

Society’s accelerating digital transformation during the COVID-19 pandemic highlighted clearly that the Internet lacks a secure, efficient, and privacy-oriented model for identity. Self-sovereign identity ... [more ▼]

Society’s accelerating digital transformation during the COVID-19 pandemic highlighted clearly that the Internet lacks a secure, efficient, and privacy-oriented model for identity. Self-sovereign identity (SSI) aims to address core weaknesses of siloed and federated approaches to digital identity management from both users’ and service providers’ perspectives. SSI emerged as a niche concept in libertarian communities, and was initially strongly associated with blockchain technology. Later, when businesses and governments began to invest, it quickly evolved towards a mainstream concept. To investigate this evolution and its effects on SSI, we conduct design science research rooted in the theory of technological transition pathways. Our study identifies nine core design principles of SSI as deployed in relevant applications, and discusses associated competing political and socio-technical forces in this space. Our results shed light on SSI’s key characteristics, its development pathway, and tensions in the transition between regimes of digital identity management. [less ▲]

Decentralised Finance's Unregulated Governance: Minority Rule in the Digital Wild West

E-print/Working paper (2022)

Decentralised finance (DeFi) is a category of unlicensed, unregulated, and non-custodial financial services that utilise public, distributed ledgers like Ethereum. The Bloomberg Galaxy DeFi Index ... [more ▼]

Decentralised finance (DeFi) is a category of unlicensed, unregulated, and non-custodial financial services that utilise public, distributed ledgers like Ethereum. The Bloomberg Galaxy DeFi Index, launched in August 2021, includes nine Ethereum-based projects – non-custodial exchanges as well as lending and derivatives platforms. Each project is governed, at least in part, by a community of unregistered individuals that hold tradable voting rights tokens (also known as governance tokens). Voting rights tokens allow holders to vote on proposed changes to a DeFi project’s features, parameters, or rules. DeFi’s governance power is thus linked to the distribution and exercise of tokenised voting rights. Since DeFi projects are typically not managed by companies or public institutions, not much is known about DeFi’s governance. Regulators and law-makers from the United States recently asked if DeFi’s governance entails a new class of “shadowy” elites. In response, we conducted an exploratory, multiple-case study that focuses on the voting rights tokens issued by the nine projects from Bloomberg’s Galaxy DeFi index. Our mixed methods approach draws on Ethereum-based data about the distribution, trading, and staking of voting rights tokens, as well as project documentation and archival records. Our findings contribute knowledge about the entitlements of DeFi’s voting rights tokens, the initial distribution strategies, and the actual voting and delegation activity. Our principal finding is that DeFi’s voting rights are highly concentrated, and the exercise of these rights is very low. Our theoretical contribution is descriptive: minority rule is the probable consequence of tradable voting rights plus the lack of applicable anti-concentration or anti-monopoly laws. We interpret DeFi’s minority rule as timocratic and acknowledge its possible transition to oligarchy. [less ▲]

DeFi, Not So Decentralized: The Measured Distribution of Voting Rights

in Proceedings of the Hawaii International Conference on System Sciences 2022 (2022, January)

Bitcoin and Ethereum are frequently promoted as decentralized, but developers and academics question their actual decentralization. This motivates further experiments with public permissionless ... [more ▼]

Bitcoin and Ethereum are frequently promoted as decentralized, but developers and academics question their actual decentralization. This motivates further experiments with public permissionless blockchains to achieve decentralization along technical, economic, and political lines. The distribution of tokenized voting rights aims for political decentralization. Tokenized voting rights achieved notoriety within the nascent field of decentralized finance (DeFi) in 2020. As an alternative to centralized crypto-asset exchanges and lending platforms (owned by companies like Coinbase and Celsius), DeFi developers typically create non-custodial projects that are not majority-owned or managed by legal entities. Holders of tokenized voting rights can instead govern DeFi projects. To scrutinize DeFi’s distributed governance strategies, we conducted a multiple-case study of non-custodial, Ethereum-based DeFi projects: Uniswap, Maker, SushiSwap, Yearn Finance, and UMA. Our findings are novel and surprising: quantitative evaluations of DeFi’s distributed governance strategies reveal a failure to achieve political decentralization. [less ▲]