Web3 Workers Rights, Exit to Community, and Solidarity Primitives

In this episode I spoke to my friend and scholar Tara Merk who is part of BlockchainGov and has been focusing her PhD thesis on Exit to Community (E2C). E2C is proposed as an alternative to IPOs or buyouts for founders of businesses to be able to be compensated for their work while giving ownership of their business to those that work on or use their product.

During the discussion we talked about what crypto brings to E2C, the regulatory landscape for community ownership, and whether web3 workers should become unionized. We also talked about her recently published research done with Other Internet on Solidarity Primitives for Web3 Social Security which explored the current state of working in web3 and potential solutions for its issues. I took part in the research study where I contributed the concept of solidarity primitives which we wrote about on the Breadchain Cooperative blog. 

If you liked the podcast be sure to give it a review on your preferred podcast platform. If you find content like this important consider donating to my Patreon starting at just $3 per month. It takes quite a lot of my time and resources so any amount helps. Follow me on Twitter (@TBSocialist) or Mastodon (@theblockchainsocialist@social.coop) and join the r/CryptoLeftists subreddit and Discord to join the discussion.

Transcript

Speaker 1: 0:08

Hello everyone, you're listening to the Blockchain Socialist Podcast. I'm Josh and I am here in Limassol, cyprus, with my friend, tara Merck. Tara is a student, a PhD student with Piuma Vera de Philippi. She's affiliated with the Weisenbaum Institute, blockchaingov, other Internet and a few other things. Did I get all of them? Metagov and Metagov? I know it's a missing one. And so, yeah, tara has been working on some pretty cool research, including Exit to Community, which was an idea that was brought forth by I believe it was Nathan Schneider a few years ago, which I've talked about on the podcast before, but I think I'll let Tara speak about that more. And then she's also recently published a piece of research with other Internets that's focusing on, I guess, working conditions in Web 3 and kind of the issues with that at the moment and what are some suggestions in improving it. So, hi, tara, how are you?

Speaker 2: 1:13

I'm good Thanks for having me here.

Speaker 1: 1:15

Of course, we've been in MoneyLab this is why we're in Cyprus, which is the event started by Hirdelowink, and you were able to show some of your research and your work and your presentation was really nice, but how are you enjoying Cyprus?

Speaker 2: 1:34

Thank you. I'm very glad I got to come to MoneyLab, first of all, of course, for the interesting conversations and topics brought up there, and secondly to get out of the grey Berlin winter into the sunny Mediterranean climate.

Speaker 1: 1:49

Yeah. So maybe at the start would you want to give kind of like an introduction to your work on Exit2 Community and then we can go from there.

Speaker 2: 2:00

Yeah, sure. So Exit2 Community is kind of like the topic that I chose for my thesis and maybe like it was fun going into this PhD that at the beginning I had a bunch of different ideas sketched out and you have to apply with a research proposal and whatnot. And pretty much in my first week Primavera just sat me down and she was like, yeah, but what's your cause? And I said, well, I don't know, but this is a really interesting research topic. And she said no, no, no, like what's your cause, and she sent me a way to go meditate or do. Whatever I had to do is what she said to go and find that. And essentially a bunch of things came together from, like my own past experience, but also working closely with Murshet Manan, who's a postdoc in the blockchain of.

Speaker 1: 2:50

Friend of a podcast.

Speaker 2: 2:51

Friend of a podcast friend of ours who's working as a postdoc on that project and he did his PhD thesis on the emergence of cooperative firms in the platform economy. So this was already and he wrote one of the major academic pieces, together with Nathan Schneider, around Exeter Community and three legal strategies or pathways in which a hypothetical company could do it. So I got very interested in that and it connected to a lot of previous experience that I had working in social startups and being fed up with the way that big platforms are using my data. As a German, I'm very concerned about my privacy or anybody in touch with the internet should be and kind of settled on that. So my thesis explores this idea of Exeter Community and tries to further it as a concept and our understanding of like.

Speaker 2: 3:51

How do we go about exiting to community? Maybe as an introduction here, what does Exeter Community refer to? In its most basic form it's about transitioning founder and investor-led startups, so the sort of status quo model that we see especially in the tech industry. How do we transition that into something that is community-owned and governed at a later stage, that meaning that both the founder reninquishes ownership and control over the project as well as the investors, sort of doing the same thing and leaving that ownership and control to stakeholders that are in some way a community. That means they are connected to this product service platform specifically in my context that it's all about this organization and they also have some sort of emotional bond amongst each other. They are probably not just customers of a business but take on the stewardship role. So that's what it's about.

Speaker 2: 4:55

I try to understand why is this important? That's maybe the most pressing thing, and then obviously, maybe I'm biased, but I try to make a reasoned argument for why it is. Go in the second step to explore how do you practically do it, like what are strategies that projects and organizations currently in that transition phase or employing in terms of governance, in terms of communications, in terms of setting up labor policies for the outcome of an exit to community, etc. To ideally have something that others can refer to?

Speaker 1: 5:31

going forward. The way that I have read about exit to community is, at least in the context of tech startups, is usually that you have more or less two choices as a founder of a company is either you sell it to a bigger player with more money, or you IPO and enrich the investors through a public offering, and so this means that your only two choices are really to give in to big capital to a wide extent, and there isn't much. So exit to community is to provide a third option where, instead, you can give the ownership to those who actually use the product or actually care about it, which is, of course, like a really interesting kind of mid ground between just going all in on tech startup sort of mentality versus trying the pretty difficult job of having a purely horizontal cooperative compete with a tech startup which has much, many more resources. It's kind of like a middle ground.

Speaker 2: 6:45

Yeah, exactly, so this is also in my sort of exploring and grappling with this idea of exit to community. That's a lot how I understood it as well, also historically. So there's this discontent with our tech platforms, so like staying with the tech industry. That, as I said, is around the use of data. It is around the fact that platform corporations sort of have a say on how algorithms are structured, which sometimes is detrimental to content creators or whoever. There's a really big sort of issue around working conditions in the gig economy previously, you know, masked as something like the sharing economy, probably in countries that don't have strong worker protections or governments regulating around these workers, that people really get exploited as overdrivers, as click workers, as what have you. And another aspect also being a realization that over the past few years, we're having a very hard time from a national government perspective to hold these platforms accountable to what we're asking them to do, and it starts with paying taxes, you know, goes on to regulating fake news that is spread, etc. And all of these things are recognized not just by people who are trying to advance exit to community, but was also something that was very much picked up by the platform cooperativism movement, and the solution here was to say, okay, but then why don't we just replicate the sort of function of some of the platforms that we know today but, instead of starting them with a corporation sort of building out the platform, we're going to go straight into the cooperative model where you know a right sharing platform would be owned by the drivers and the users and the developers, etc.

Speaker 2: 8:38

I think the issue that we've seen here is that building these tech platforms as a community owned and governed organization from the start means that in the beginning, early stages, you're moving a lot slower than if you have this sort of top down kind of leadership that many, many startup companies do. You're moving a lot slower. It is way more difficult for you to attract external capital, to build the market on your platform, etc. Etc. That even though we have so many successful and like wonderful platform co-ops out there, they have not yet become like a really serious competition to the big tech platforms that we're still using today. And exit to community is kind of like that's how I understand it a pragmatic approach to that which says, okay, in the beginning we're going to do that sort of tech startup model and we're going to have the founders who can pivot and bring in internal and external investors, etc. And build out and scale a platform to a certain size.

Speaker 1: 9:48

However, the goal here, as we mentioned and the difference is to build in safeguards that will ensure that at a later stage it is not brought to an IPO or just swallowed up by Facebook and Google and the likes and I guess, beyond the tech industry, you can also think of it as a way for businesses that are maybe where the owners are becoming too old or they're wanting to sell or something like that, to offer them a way to give that company to maybe the workers or to other people who are giving up, since a lot of boomers are getting too old to keep running their businesses.

Speaker 2: 10:31

Yeah, so this is exactly. This is a really interesting backdrop that is happening outside of the digital platform space where, especially in Western economies, we're facing this problem that's called the succession problem, yeah, where there's all these small and medium-sized businesses that are providing a real service or value to a specific community. It could be a local bakery, it could be a GP office this is a very big example in Germany, for example that are just owned and led by the doctor and they're retiring and maybe they don't have kids who are also doctors who want to take this on. They're not like a business that external or like any steward would be able or want to buy out. They're not going to go to the public market and what we're seeing, for example, to stick with this example of healthcare in Germany is that they're being bought up by big, already public sort of corporations, where it's a really tricky thing because the key purpose of any doctor's office is to provide healthcare services to their patients. However, being bought up by these big shareholder-led companies that are often publicly traded, the main purpose becomes to increase that shareholder value exactly, and we're already seeing a decrease in public health services and that sort of thing, and this is a trend that's going to increase.

Speaker 2: 12:01

We're seeing that, for example, in the EU or also in Germany, in my sort of local context. Regulators are going against it. In Germany they're going to implement a new type of corporate form that is about to go into the legislative procedure. That is really about providing a standardized model for these small medium-sized businesses to transition into that do not require the workforce or the stewards to necessarily become the owners, but by splitting ownership and governance rights, somebody else can provide the capital. They'll have some revenue share, but the purpose and the stewardship and the governance of these organizations will be led by the people who are close to the company. So we're seeing a lot of regulatory things happening, both online and offline, and it's just like an interesting model across sectors of the economy to be watching right now.

Speaker 1: 12:55

Right. I think we're potentially seeing, just like, yeah, the further consolidation of most businesses into already large ones. That can be, of course, very problematic into the future, and so there is a need for some sort of alternative to prevent that.

Speaker 2: 13:11

Yeah, exactly, and to serve a purpose. Whatever that purpose is that that business has been catering to. That needs to be maintained and not sort of be swallowed by a higher purpose that is, to increase a profit for some external shareholder who has nothing potentially to do or care about the actual thing that is being sold.

Speaker 1: 13:38

Right. So you've been doing, of course, with this research, kind of making connections with the crypto space, because there are a lot of connections. Do you want to kind of like outline, maybe, why does exit to community matter to people, or what does crypto bring to exit to community that makes it interesting?

Speaker 2: 14:02

Yeah. So I mean for myself, it was a natural move.

Speaker 1: 14:04

I've just been like in that space pre-PhD yeah also just to say you've been in crypto, I think, longer than me.

Speaker 2: 14:12

I feel like we've had similar. Maybe I'm not sure.

Speaker 1: 14:17

But you told me that you were going to Bitcoin meetups in Germany, I think probably before, before even I was doing that type of stuff.

Speaker 2: 14:28

I mean, I'm not sure. I came across Bitcoin in, I think, late 2015, early 2016. Yeah, oh, look at you.

Speaker 2: 14:37

You're the one here telling me, yeah, but I mean I wasn't taking that very seriously. And then, yeah, maybe towards the end of 2016 was like first encounters at Bitcoin meetups when nobody was talking to me. Yeah, so, yeah. So I kind of like stuck with a weird hobby, anyway. So in that sense, it was like a natural connection to really try and make.

Speaker 2: 15:03

As the PhD came is like, where's my cause? It is community-owned and stewarded organizations. How can we do that with crypto? And fortunately, I started my PhD in the time of Dow Booms, so that was a really interesting phenomenon and that was actually before this exit to community did emerge as my main theme. It was already Dow's that I thought were like a very interesting phenomenon before that. I also like the governance aspect of blockchains was already topic of my master's thesis and like a question that had been accompanying me or, like to refer to your book terms, I think I fall into the third part of like blockchain as coordination type of mapping.

Speaker 2: 15:50

And so the question of like, why is Web3 like an interesting space to observe and study when we're thinking about exit to community? For me, there's like three main reasons. The first one is the social norms that we have in Web3, which, at least myself, sometimes they just take for granted this idea that decentralization is a really great thing. And you know, you'll say that at a crypto conference and everybody's like, yeah, of course. Like, what are you talking about? And this is just not normal. I think in many other industries it's, first of all, maybe just not a topic of conversation. Like people don't think about decentralization obsessively. In all other walks of life we do and we all agree, despite our, you know, organizations being very different and their aims like super diverse, from the Regents to the D gens and whoever else, everybody's like, yeah, decentralization. So that's the first thing, which in itself is a social norm that encourages this idea of sort of or like at least is not opposed to the idea of community ownership and governance, already with the you know, one validator, one node, sort of vote model. So the social norms is the first one.

Speaker 2: 17:11

The second one was kind of this question a little bit of like when we do exit big digital platforms to something that is community owned and governed. There's a practical concern that is for me like oh, but you know, like, then what sort of entity would that become Like? Is that going to be this new entity type in Germany. Are you, as a US citizen, going to be able to become a steward of that? Is it going to be a US based cooperative? Is Europe going to be happy with the sort of data protection laws that that co-op implements?

Speaker 2: 17:50

So this weird thing that we've created platforms that are super international, global, like very much beyond the nation state, but they are attached to organizations incorporated in a specific jurisdiction, just seems a little bit at odds. So I think, the way that I like to think about it, it would be really cool that if you exit to community a global digital platform, it should be incorporated on. The internet is where we come together and use it right. And Dau is very much corresponding to that idea you know of like an organization incorporated on the blockchain first and foremost, and then, of course, we're attaching various national leaders Exactly, but already with, like the Kuala Dao model, all right, that approach of saying like maybe you don't have to incorporate a legal wrapper in any specific jurisdiction, maybe your Dow just needs to be structured in a specific way so that national legislation can recognize it as a type of organization that would be incorporated.

Speaker 2: 18:56

So I think this is very interesting. And it's also interesting then to understand tokens as sort of cooperative shares or what have you like, just the medium of a token, as something that represents ownership and governance right in a specific organization, as opposed to bureaucratic sort of like traditional equity agreement. And then the last thing that I also thought was interesting at least before this crypto winter or bear market or whatever here was the thing that investors in Web 3 were very much on board with organizations progressively decentralizing as I think Andreessen Horowitz kind of almost coined that term and they were like pushing for this movement towards daoification of everything. Of course, this is maybe not out of not don't think they're evil per se, but you know there's also a.

Speaker 1: 19:55

I do.

Speaker 2: 19:57

There's also a clear self-interest in terms of the regulatory concern that if your project is sufficiently decentralized, it gets exempt from all sorts of security regulations.

Speaker 1: 20:08

They use progressive literally progressive language to kind of like benefit their bottom line.

Speaker 2: 20:15

Yeah, I mean exactly. So it's sort of like making sure that you're not getting into murky regulation while also and this I think is important to point out just by creating a dao and dropping a bunch of governance tokens to anybody who's used the protocol, plus early team, plus investors in many, many cases, is not an exit to community, because it very much does not represent this idea of relinquishing ownership and control like cashing out. It's just, you know, it's adding a liquidity event.

Speaker 1: 20:46

It's an IPO deluxe. Yeah, it's very strange.

Speaker 2: 20:51

So exactly, so yeah, those are kind of the three reasons why I think it's interesting to be thinking about exit to community in Web 3 in regards to digital platforms.

Speaker 1: 21:05

Right To the first point about like the social expectations. That's interesting because like, yeah, it's like you don't even have to like pretend to be, I don't know left wing or on the socialist or anything to be like yeah, workers should own, you know, like the community should own, like the businesses or should own, like have a fair share or governance around, like what we do with our resources and things like that. So it's been like a. It's always really interesting to talk to ostensibly very libertarian, very free market oriented people or people who believe that they are that, but then also talk about like worker ownership.

Speaker 2: 21:47

Yeah, like it is not a contradiction in our space.

Speaker 1: 21:50

Yeah, it's really. Yeah, it's just a super weird thing that, like is often missed.

Speaker 2: 21:55

Yeah.

Speaker 1: 21:56

Rather than, like, I think, exit to community also represents, I think, an attempt at kind of guiding those intuitions, I guess, of those types of people towards like probably what they would rather have, than sort of like an Anderson Horowitz, you know, progressive decentralization type of scenario, because I think there's been a lot of like disillusionment with in the crypto space and my feeling is that a lot has to do with it with the influence of venture capital and people just like not really taking it seriously as like a problem.

Speaker 2: 22:38

Yeah, exactly, I think. One other thing that, like with this influence so I'm not sure any like this is my personal perspective on it, but the problem is that the venture capital model in crypto is still such that if you invest and have ownership economic ownership in a project, it also means you have governance, right, right, like governance and a say around how that project works. And this sort of meshing together of economic power and political power when it comes to protocols and organizations is a very it's a strange thing. And then, of course, it's easy to say you know the VC influence, etc. Etc. We've seen some you know weird phenomenon where VCs will delegate their governance tokens to, like, various university blockchain organizations, etc. Etc. Kind of like saying I don't want to be messing up this governance Like, but just also, by the way, that our tokens work right now, if it was pure equity, then again we're falling into a different regulatory terrain. If it is mashed up, it's, you know, is it a security token or utility token? Well, governance tokens right now feel to people a little bit like both. So, yeah, we're having this, this, this strange modeling of things that both creates escapism on the side of the community of outsized influence from the investors. Maybe investors don't even want that outsized influence.

Speaker 2: 24:14

In all cases, governance is also a lot of work, right Like somebody needs to keep up with all the crazy forums, and and then it's transparent, so people are going to know your opinion.

Speaker 2: 24:27

So I think I think it's a very it's a strange situation that we're in where a lot could maybe change if we were able to separate this idea of like yes, you know, you helped start this organization. You have a right to some revenue share, maybe in a capped way. It's not going to be a hundred X overnight. But just because you gave money does not mean you get to say where this project is going and this. So this, for example, you can structure in in traditional legal organizations and it's also something that, for example, open Collective is an organization I'm working with right now. They very consciously did in when they were raising venture capital for Open Collective, the founders said you know we're going to keep all the board seats. We're going to. We're not going to relinquish that governance power and that stewardship to the people who helped grow the organization. They have other rights, but not necessarily those.

Speaker 1: 25:30

Right. The kind of default in a lot of these investments has been that you get both.

Speaker 2: 25:34

Exactly.

Speaker 1: 25:35

And so the, although there are legal ways to separate them, they're not very common. What I find and they it tends to be like whenever I hear about this like yeah, we had to kind of like customize everything. Basically they couldn't. There was no like cookie cutter thing that they could, because it's not a popular thing. A lot of VCs actually don't accept it. They only have it if they have like real equity, real control over the business.

Speaker 2: 26:03

Exactly and like recognizing that problem and you know, like I don't think Germany is so great. I just came across the fact that all of this is happening and there's so many people working on it. You know, this new entity for them, like that is exactly the problem that is being addressed, because we're already able to separate the rights that various stakeholders have in an organization, but usually it costs a lot of money. You need a bunch of lawyers to write very bespoke sort of contracts and clauses and whatnot, and by creating a more of a cookie cutter recipe, which you know could be a smart contract standard or whatever in our in our terrain, it's a very interesting approach just to decrease transaction costs of implementing this and thereby maybe also facilitating the growth of these types of models.

Speaker 1: 26:50

Yeah, sure, I mean even it's great that Germany may pass this legislation, but it means it's only in Germany or it's only in that national context. And I think. One word talking about competing with big platforms. These companies are transnational already. Their capital can go anywhere around the world whenever they want, but we don't really have an equivalent counter to that that allows for those who are working in it to be able to compete with that or to have their interests shown within that type of context. There are too many labor legislation at a national level and it varies quite a lot, whereas under neoliberalism, capital has been able to create legislation around the world to allow it to do basically whatever it wants.

Speaker 1: 27:40

I think crypto is this very interesting medium to where you can, like you said, reduce the transaction costs so that you can kind of, as soon as you have the templates, the template is there For anybody. It's the same cost, so you can choose. Then, do you want the split sort of economic and political power or the shared one, which you have more risk of influence dominating over your business? I'm sure if those are equal, you have more incentive to choose what is more difficult otherwise in that situation.

Speaker 2: 28:22

Yeah, I think there's an interesting. So it's not just Germany that has this new entity form. There are other existing entity forms that organizations are exploring. For example, perpetual Purpose Trust is kind of like what Patagonia did, so placing the company into this trust that is bound by the purpose I think in Patagonia's case, it is climate protection so everything that this company does, it is tethered to this purpose, and doing tethering down purpose is interesting because it's always like in relinquishing control, maybe as a startup founder, there's what a lot of people also talk about.

Speaker 2: 29:03

You built this thing for a reason. Obviously, you want to make money on the way, but making money maybe was not the main thing, and social startups have that sort of hybrid, dual purpose of existence, and the risk in many traditional exit models is the fact that there's always this looming purpose on the side, which is like get rich right and money and in many, many cases starts to trump the original idea, be it connecting people or selling bread or providing healthcare, and so this is also maybe part of my PhD research, or something that we've been doing within the blockchain gov Is an understanding of when you relinquish control, be it by exiting to community through a perpetual purpose trust or transitioning towards a DAO. We are increasingly seeing how founding teams are trying to protect that purpose, because once you give up you don't know where it's going to go. And broadly speaking, in my thinking I've kind of been identifying maybe four different types along the less ex-pathetic theory of how to take that purpose and maintain purpose of an organization through transition, the first one being maybe mostly the social norm. So this would be traditional succession.

Speaker 2: 30:28

Or in small communities, like a project that I work with in data, if you know everybody, you trust them very, very much. You trust that they will continue the purpose of this organization. So you don't have to enshrine anything in law or technology or do this complicated thing. You just have trust that the new stewards and owners are going to do the right thing. Obviously, in many cases you don't have that trust right and especially if you're dropping governance tokens to thousands of people, you don't know them.

Speaker 2: 31:04

So what are other approaches? One of them could be like a legal approach, like a perpetual purpose trust or this new entity form where the capital is tethered to serve a specific purpose. Foundations do that already, so you legally cannot not go along that purpose. A third aspect that I think we're seeing more and more in crypto also in terms of this governance minimization approach is to tether purpose in technology. So there's just certain things like parameters that we cannot change, that are hard coded into our protocols and that sort of protects the continuous functioning of a project along its original trajectory.

Speaker 2: 31:45

And then a final one that's interesting is this idea of writing a constitution right, which a lot of Web3 projects have been doing, specifically when they transition into a DAO, like optimism we saw launched with the constitution arbitrum as well you know safe DAO doing that very much shortly after announcing the DAO, etc. Where the constitution is this weird hybrid that is both very trust based, maybe a legal document we have not seen them yet being disputed in court and, to the extent that they can be enforced on chain, also a technical tethering of purpose and protecting of purpose. So I think that's like a really interesting thing to consider throughout exit that legal entities are trying to do, but we have different means, maybe in Web3.

Speaker 1: 32:35

Do you have an example of that third one on hand, like putting it into technology, the purpose into technology is just something for listeners to think about.

Speaker 2: 32:49

I'm trying to think of a good example and I cannot, oh no.

Speaker 1: 32:53

What's a bad example.

Speaker 2: 32:56

No. So I think part of the things like they come in this idea for example in maker DAOs sort of, when the peg like emergency situations, right, who kicks in and what are the new parameters that you can now govern and vote on sort of thing that are usually shut down, like you can't change them. It's just a protocol executing certain things. I know, like other internet also did a huge research around governance of Uniswap and there was like one of the main things or like one of the insights that was in that report was around the idea and people at BlockScience called the governance surface. So what are even like the governable areas around this protocol and within the Uniswap community?

Speaker 2: 33:46

As I read it out of that report, was like people were like, yay, we have these governance tokens now, very early sort of move, and then they wondered like what can we use them for? And realize that in terms of, like changing protocol parameters, it wasn't that much. So there's a lot of sort of off-chain governance, maybe in proposals that you can do, but right now changing protocol parameters, there's just not that much and by not allowing too many parameters to be open to change, you're ensuring that it's just going to continue as it's exactly. So maybe yeah, Like in Bitcoin.

Speaker 1: 34:24

I mean, you could just say that the protocol Bitcoin and try and kind of like the purpose of only having 21 million Bitcoin or something like that yeah, exactly, but as well, I think there's also there's probably examples of like you know project. I mean, there are for sure you know just using within the protocol, like funding streams towards you know public goods, quote, unquote, in the crypto space, that's, they sort of enthrined through code.

Speaker 2: 34:51

Exactly like yeah, optimisms, I think, sequencer revenue, the public goods network, etc. They're just going to automatically do that, and that is part of the purpose and we can't change it.

Speaker 1: 35:28

So I think that's it for today. I hope you enjoyed this video. I'll see you in the next video. Thanks for watching. Societal social security for web3work a preliminary specification of the design and deployment of solidarity primitives for DAO contributors. Do you want to talk about that a bit?

Speaker 2: 36:30

Yeah, I want to talk about that by starting out that saying that I didn't do that alone. So this was a research project that we did with other internet and I worked on it for almost a year or like yeah, like almost a year, together with Laura Lotti and Nekut, and essentially the paper that you just quoted is kind of like the final output of that work, which had several stages. So maybe interesting to start out with what we wanted to explore. And why was this idea that, despite there being so much talk about, like you know, unstoppable protocols and autonomous code and you know people being like you, don't have human intervention in a true DAO, etc. We like, yeah, but if you look at it, it's really still people, humans, who are spending their working hours building and maintaining and growing, you know, and using these protocols and sort of saying that, especially now in a bear market, one of our key priorities as an ecosystem, if we want to survive and matter and also be viewed as legitimate, is to ensure that we can maintain that talent and kind of prioritize building good working conditions for the people in this space, because without them, you know, we don't have these technologies or they don't matter.

Speaker 2: 38:04

So that was kind of the starting assumption that we went in with, and what we did then was to explore has anybody, you know, written or thought about Web3 as a new work environment? And you know the needs and desires of these new workers, or at least not new workers but workers in a new industry? And we did find a bunch of things both from industry and academia. However, what we also saw a lot of it was from the bull market. A lot of it was quite quantitative or like survey based. Very little of it was trying to surface like the actual, like day to day sort of working conditions of people in the industry. So we took that upon ourselves, did a thing that is called workers inquiry, which is just like a research method, a Marxist research method that you know was developed to surface insights about what's it like to work at the factory from the perspective of the worker and, yeah, adapting that method to surface what it's like to work in Web3.

Speaker 2: 39:04

And then obviously, our ultimate goal, as I said starting out, was not just to say, oh, work here is great or work here is shit, but to kind of propose viable mechanisms and specify them, to argue. This is what we need to do as an ecosystem, to improve working conditions, to retain talent and, yeah, kind of like, ensure that this whole mad endeavor continues, but in a wholesome way. So, and we did that by taking our insights from that, from that empirical research, and discussing it with a bunch of experts, including yourself, I think, along along three lines that are like three angles that we thought or found were important to improve. That was psychosocial stability, financial security and regulatory clarity, and, yeah, sort of the, the insights that emerged from both the research and these discussions and, you know, further specification of what is summarized in this paper, which we very much hope that others will take and implement.

Speaker 1: 40:14

Yeah.

Speaker 2: 40:16

And then maybe just like how does that? So I did that. It was not. It is related to my PhD, because so one section is very much that I argue that when you transition from a founded, led found an investment startup that is maybe incorporated as like a company somewhere and you have all these employees that have been helping you build it, that when you transition into a community on and governed Dow, in many cases that I research, one of the key priorities should really be that the people who are working at this organization should not be terribly worse off. So yeah, and kind of like identifying so what do we need to do was was this research informing my thinking there?

Speaker 1: 41:02

Yeah, so just to like kind of make the connection of like this, this thread that I think we're pulling on, is that we, we we've noticed that of course big tech has kind of been able to utilize kind of transnational infrastructure in order to upkeep itself and regular use regulatory arbitrage or whatever else in a way to maintain its power. Platform cooperatives are an interesting potential alternative. Or using exit community to create a platform cropped from another, from a tech startup, is an interesting kind of compromise solution in order to like build an alternative infrastructure. Crypto is interesting in that context because it allows for a kind of transnational form of coordination. But what that means because laws are written at a national level means that those who work in, for example, in Dows that are transnational, they don't have necessarily, because a lot of Dows are not legally incorporated, they don't have the kind of like worker protections that are standard for those who have like an employment contract with a company that is based in the country that they may be in.

Speaker 1: 42:25

So there is this kind of I think what what I've seen at least, is a lot of people in Web three who do work in Dows experience a lot of burnout and experience just kind of like they don't really have the same benefits as they would if they were in a, in a company that was, you know, with an employment contract, which can be good.

Speaker 1: 42:48

I mean, for some people it's okay because maybe they get paid a shit ton in tokens, but then they are very like, exposed to market swings and volatility. But yeah, you don't have this. You don't like, at least if you're in the US, you don't get health insurance through your DOW employer, necessarily. There are, of course, other kinds of solutions to get to get around that, but a lot of these things that are kind of like taken for granted in a employment contract you don't really get. And so there's, I think, the question that you guys are kind of also approaching it is how do you then build in maybe certain kind of like labor protection that is native to the medium, that's people are kind of relying on in these organizations?

Speaker 2: 43:34

Yeah, healthcare. So I think I mean, yes, that is precisely sort of the question that we explored and we came at it and it's important in my perspective now to explore it from these various different angles, the first one being so people experience a lot of burnout. What can we do about it, especially if they don't have health insurance or a standardized employment contract and potentially also not a shed ton of tokens? So the first thing that we can do, I think, is prevention, and that's very much also on the psychosocial stability angle that we went in from. So this is all about building healthy norms within our ecosystem. We don't need regulatory approval to, you know, say, hey, one day a week, we're just gonna like not be on Discord. Or you know, there was like one idea that always came up Like what if we coordinated sort of a proposal, a cross-stile proposal, where contributors just say, okay, here we're gonna put it to a vote, like in this hour it's gonna be a Tuesday and this one is gonna be a Sunday or Friday or whatever, we don't expect anybody to reply to our messages. And it's not a hard enforcement, it's just something that we agree to collectively do because we think it is all right. Or you know, like we're gonna make sure to check in with like one person in the DAO once a week and tell them to stop working right now, or you know anyway. So there's all these sort of like norms that we can build around creating better working conditions and we can do that either by just doing it or by putting it into DAO legislation, for example.

Speaker 2: 45:21

There's another aspect of then, maybe on the regulatory side. So when it comes to the fact that you are sick or you are burnt out, what can we build to allow you to access? You know, national healthcare services is the interesting aspect is, for example, previously worked out and Tohoku or Apollos in the US, right, how do we build these intermediaries or interfaces that kind of allowed our workers to do whatever they want in the Web3 space, but then you know, kind of take care of the bureaucracy that needs to happen to translate whatever's happening Web3 into something that is acknowledged and can fit into these people having access to health services in various places. So I think, like building out services like Apollos and Tohoku in a more ubiquitous way, making them cheaper that's something that we heard. That's still quite expensive for contributors to buy into them, these interfaces, I think is a really important thing that, again, we can start doing we don't need outside permission or consent, and it can tremendously help people and simplify things. It's also not a new idea. You know there's been freelancers, freelancer cooperatives and freelancers banding together to make invoicing and tax payments and insurance payments easier for a long time, so like learning from that and building that in our space.

Speaker 2: 46:56

So now I've spoken about prevention, plugging into, you know, state-based or otherwise based health services or security. And the third one, I think that also came out of this paper, is the idea of using these technologies and tools that we've created to sort of set up our own security systems. And here I think what was very interesting. We spoke a bunch to people from the protocol guild and they're already doing something that I feel very much resembles anything that would be like Web3 native security funds and grants, in that you have a list of people who have access to this part of funding. You need a mechanism to fund that part of funding and then you need a way to spend it, and these parts of funding could be a multi-stake or some sort of smart contract-based account who have different purposes. So one could be something like oh you know, when you have certified burnout, you get access, like the fund pays for your therapies, or yeah.

Speaker 2: 48:14

I'm not sure exactly, or your sick leave, et cetera. So it's just like an insurance part. Obviously, all of these funds like it could be parental leave, mental health, sick leave, unemployment what have you all of these funds have like the same fundamental requirements is that we need a mechanism that somehow people believe is just or fair, that specifies who gets on the list and who doesn't, so who has access to that. We need a funding mechanism, right, like is this insurance fund gonna be funded by part of the income, like a percentage of the income of the people who are on the list? Is it something like a protocol tax I just mentioned? You know the sequencer revenue, for example, in the public goods network or optimism, or the lay of twos. Is it? Does it come from validators? Does it come from there's a smart contract secured revenue? I think is an interesting sort of model to explore. So you know, transaction fees from or fees collected by, a smart contract flow into this part, anyway.

Speaker 2: 49:23

So you need to find out who gets on the list. How does it get funded? And then the last one how does it get distributed? Right? What is sort of like is there? What is? What do I need to prove in order to have access to how much of this part? So I'm sick and I can't work for six months, yeah, sort of which proofs do I need to give? How do we do that in a privacy, dignity preserving sort of way? These are questions to discuss that are interesting but, you know, not impossible. And we have split contracts, we have multi-six, we have funny money on the internet. Like it's cool to think about these things and also think about these things in a way that ultimately, like, if they work, can we open them up to other people? You know who also not because they work in Web3, but, for various reasons, do not have access to like good security mechanisms and standards and social protection.

Speaker 2: 50:23

So yeah, maybe the last one that I wanna mention, that could also help if we don't have the interfaces right. That was the sort of like plugging into regulatory things. What, or it goes between them, is an idea of like what could a standardized contributor agreement look like, you know, and how do we enshrine that? Maybe both off-chain and on-chain. We heard from a lot of contributors. Some are just contractors. There's some who are full-time employees, depending on the legal wrapper. There's some who have no agreements. Some know they should be paid. Some are like I don't know, I just did this thing, maybe I'll, you know who knows?

Speaker 2: 51:04

How do we standardize that? And is there a way, if we standardize it well, that external regulators will recognize it, you know, as a work contract? And then, without these intermediary organizations like Apollos and Toku, can you plug into I don't know income tax schemes and social security schemes yeah.

Speaker 1: 51:26

Yeah, I think it is an interesting problem space. I think, like, if you know, web 3 wants to continue to exist. These are just like very serious problems it has to contend with, which I find, yeah, sometimes the solutions are far in view between. But also, I also want to say that I'm very appreciative that you guys took my concept of solidarity primitives as part of the research as that was. That was a concept that I just kind of like I created for you know, what we were building with Bread Chain as a way to kind of describe it and use, just like a play on, you know, the use of financial primitives in DeFi to kind of just like explicitly talk about, yeah, that in fact, we are like encoding something political in smart contracts that are, you know, moving real economic value to people, to places that have consequences that we have to deal with, and so that was very cool to see that I suggested that concept. Oh yeah, no, we loved it.

Speaker 2: 52:32

And I think Laura brought it up first she was like let's write a white paper of solidarity primitives for Web 3. And we were like, yeah, amazing. And then I don't know. Like you know, obviously, I've been following the Bread Chain cooperative and all these blog posts around that very much informed thinking, although our take was then, I think, twofold like the term primitive, somehow we intuitively understand it in the financial space, at least in Web 3, that's what it feels like to me.

Speaker 2: 53:05

Why is it so hard to imagine in other places? Or it still has like some fuzzy edges on like the definition is this a primitive? Is this a mechanism? Is this like? What is it and how do you know the difference? I know you define it as like very underlying sort of concepts that can be implemented various ways. And then also the idea is are these just technical primitives? And obviously through you know, talking to yourself and others and trying to explore, like, what can we do? Realizing very fast that no, if it's about social security and creating good working conditions, these primitives need to think broader than the technical realm and plug into all these other domains.

Speaker 1: 53:47

Yeah, yeah, I mean, I think the reason it's more apart I mean part of the reason why it's a little bit more difficult is that, like with financial primitives or DeFi primitives, like there's always, there's already like an assumption like this is made to make money and that's not considered like a social thing, it's just considered as like a fact you know, just like it pervades everything, and so you don't have to like think about it so much that that's just like given, versus with the concept of solidarity, primitives like you have to be because we're saying we're not profit oriented. It requires a caveat. It requires like an intentional, like rejection of the behaviors that are encouraged under capitalism. I guess is kind of how I see it.

Speaker 1: 54:36

Cause, then cause there are all these projects, I mean that kind of co-op, kind of progressive language, or like small things that then that makes them look like they're actually really, really good people or whatever, that are just sort of funneling money towards charities which I mean to maybe someone who's more of a liberal listening to this they're like oh, but isn't charity a good thing, or it's a solidarity, whereas I think, taking the more radical approach, my feeling is that I would rather that charity not exist, like charity is not even a useful thing in our world, because we've already, like we have it ingrained in our society that these are not problems that we have to just donate money to, because donations is not a sustainable system at all, and so by ingraining it into technical code like a blockchain or a smart contract, where it is going to run, no matter what theoretically, then, it's more than just like a you can do things more that are not just charitable donations, because the security of people who are workers cannot run on just donations, and they don't run anywhere just based on donations.

Speaker 1: 55:54

They run on largely state legislation and state institutions or other types of institutions that have some sort of sustainable way to keep itself.

Speaker 2: 56:05

Yeah, and that's why I think this whole I mean in crypto called public goods funding is so Like, it's so important and it's so interesting because charity is not a sustainable business model and I don't know sanctions come in, interest is lost, etc. I've been I have also half of my background in South Africa and recently learned from people running the. It's a great initiative. It's a law clinic in Johannesburg that is protecting the right to protest, so they provide legal services for anybody who is protesting. South Africa has one of the highest protest rates in the world and anything, any incident that happens during a protest like protecting these people from it and providing legal services.

Speaker 2: 56:57

In one of the big foundations and we don't hear about these things much that used to support this legal law clinic is the Open Society Foundation. Right, but Open Society Foundation recently changed their mind. There was more pressing issues and they've decided to retract all of their grants from South Africa, at least in that region, and this sort of project is very much dependent on being independently funded. Like is part of their need and maintaining legitimacy. And I think there is a big question and it's not just the Open Society Foundation. There's a bunch of big US foundations that have decided, no, we're not going to fund this anymore, which goes beyond charity, which sometimes, I think, is like the little basket that goes around church or a kind gesture. It's the philanthropy, which is like institutionalized charity that is just not reliable and secure it can't depend on, just like the generosity of a billionaire.

Speaker 2: 57:59

Yeah, exactly. So going beyond those models I think is so interesting and I love this whole idea of like hard coding it. On the other hand, then you know, with Gitcoin and whoever else, we've seen that there's so many people who have need and rely on charity or philanthropy or grants, and Gitcoin used to be great and projects lived off of it and, like in the last rounds, I've heard from so many people who spend all this time and effort and energy for their Gitcoin grant and then, just because there are so many people applying it's a similar chunk of money that gets distributed into smaller pieces. So, yeah, how do we counter these models? Maybe again, here there's an interesting overlap. Of course, I think about Exeter Community all the time, so I see it everywhere, but it's really the idea of building civic or public infrastructures through the for-profit model is something that I've been talking about a lot, especially in my working group. I'm doing this fellowship at the Weizenbaum Institute in Berlin right now, where a lot of people in my working group are thinking about civic tech, like not in Web3, but that is a topic and one of the big questions is the survival or sustainability of civic tech initiatives.

Speaker 2: 59:23

Now, in many of the cases that they are looking at, it's maybe like community air quality sensors or any sort of grassroots movement that uses digital technologies and platforms.

Speaker 2: 59:35

Many of them are grant funded. They've run for a few years, there's this evaluation period, maybe there's one follow-up grant or something, and then they stop, and then what happens there? What remains is networks and ties amongst the people, but the thing itself just ceases to exist, and I see, for example, open Collective very much as an opposing model to that, where the Open Collective platform is also something that many collectives, grassroots organizations, et cetera rely on very much. For me, it is an open-source piece of civic technology, almost, but that was built not through public grants or donations but as a business, and now there is the question of how to ensure the sustainability of this piece of civic technology, where the business model just has way more options than if this had been run by a publicly funded or donation-based approach. So I think that's very interesting to think about the sustainability of public goods, of civic technologies, of whatever else, and that requires both building them differently, maybe from the start, with financial sustainability also in mind, plus thinking about mechanisms that go beyond the whims of billionaire funders.

Speaker 1: 1:01:00

Yeah, yeah, yeah, yeah, there's like Gitcoin is nice, but clearly there's a need for more types of solutions, and ProtocolGill, I think, is one of them. That is quite interesting and they've been able to, I think, because they focus specifically on Ethereum core infrastructure and developments which includes a lot of people who know that that is key to the continued existence of Ethereum that they've been able to pull off some pretty cool things. I hope to have Trent on soon to talk about it.

Speaker 2: 1:01:40

Yeah, I look forward to listening. But I think even in the Protocol Guild right like the approach to funding the Protocol Guild right now is a little bit setting a social norm that it is the right thing for you to do, that if you're building on Ethereum and you're raising capital or you have all this revenue, you should donate. But these social norms can change exactly, especially in bear markets, especially when there's high pressure, and for that reason, I think things like yeah, I'm very curious about how the public goods network and optimism, sequence of revenue, etc. Are these like protocolized income streams, how they play out and if they matter.

Speaker 1: 1:02:25

Right, and yeah, I have, and then whether or not I mean sometimes just like the. Of course we've talked about this, but like the public goods narrative tends to be a little bit of a co-optation of like, as if they're doing something good or something like very helpful to the community, but ends up being to where, for example, we're funding public goods, but only for if you use our product, which is not at all than what public goods are.

Speaker 2: 1:02:55

Right, yeah, yeah, no. I mean I think we agree on like this term is just being stretched very thin, I think in our community, but on the other hand, it's also it feels like it's gone so far that you just say this public goods, and there's this association that pops up in everybody's mind and then it's very easy to move on. I think from my own experience of being like, yeah, public goods, funding, and then we get into like the real stuff.

Speaker 1: 1:03:28

Yeah yeah, Cool. Well, it's been about an hour, so is there anything else that you wanted to plug or that you wanted to share with people?

Speaker 2: 1:03:43

Nothing specifically for now. I would like to reiterate to check out that white paper or that piece that I link it.

Speaker 2: 1:03:55

Thank you so much that Nick, laura and myself wrote and really, really encouraging and calling people to pick up some of the suggestions. Please reach out if you have questions. But ultimately, the impact that I would love to see with this work is that people start building some of these primitives or mechanisms and working on them. That's something that, as a PhD student, it's beyond my means or expertise, but as a PhD student that hopes to graduate one day and maybe start working, I have a very keen interest.

Speaker 1: 1:04:31

Tara's future employer listen up.

Speaker 2: 1:04:36

These are the mechanisms I need, but yeah no, that would be fantastic.

Speaker 2: 1:04:41

That, I think, would be so meaningful, and it's also a great service and something that we also spoke about that it's not just cool ideas of products to put out for the Web3 space that people need like contributors have told us that they want this. I think it's also a move towards a time where this space is definitely facing a huge crisis of legitimacy across the world and people are asking what is the use case, what is the good thing that Web3 is doing? It's hard to show, but I think if we show that we have good will and we have mechanisms and very clear ideas of how to improve working conditions for people that are freelancers in Web3 and beyond, then that is something that regulators and policymakers can agree with. This is one of their core tasks. I think it's also just opening a conversation around legitimacy and being a space that cares about people, that regulators also care about. Picking up some of the ideas in there is a business opportunity a great service to me and maybe also the broader ecosystem.

Speaker 2: 1:05:57

I hope this is a hard sell.

Speaker 1: 1:05:59

Actually I have one more question, but I know it's going to open a can of worms Should Web3 workers start a union based on your work and research? I know you have some thoughts on it.

Speaker 2: 1:06:13

Yeah, so I think it's been a really interesting question that's come up a lot. This is the question that comes up most and people are enthusiastic about it and people are like let's start unionizing. This is something that I love to have that resonance, but personally I'm skeptical that unionization is the right way to go at the moment, based on this research, for various reasons. The first, most obvious reason is that unionization in many cases will very much depend on contributors coordinating, and they do it. They start the union. It's not going to be a company coming in and doing it for them.

Speaker 2: 1:06:56

Contributors one of the key findings that we had. They are overwhelmed with the amount of coordination that they're doing all day. They are, in many cases, burning out. They know people who are burning out. Placing this added burden on them to improve the working conditions is severely going to not improve working conditions. I think, at least in the beginning, it's just a burden. It doesn't seem like the immediate thing to do. We're making things worse for the people that we're trying to make things better. We're also placing the burden of making their own lives better again on that same people, whereas I think a lot of other stakeholders can have a lot of impact before that. That's the first reason that's not put everything on the contributors and communities organizing.

Speaker 2: 1:07:50

The second thing is the idea of unions is very much the idea of workforces antagonizing their employers. Amazon efforts of unionizations would be workers uniting together to antagonize Amazon, the company, in order to collectively bargain for better working conditions. The question is that if you work for a DAO or a protocol or a smart contract or just an open source project in the ecosystem, who is that stakeholder that you're antagonizing? It becomes very, very murky. Maybe to close off this kind of worms and not spend too much on it. One interesting alternative idea that we've been exploring and coming across is the idea that, instead of unionizing, what would a guild model for contributors look like? Looking more down the guild route, which is just like skilled work people who see themselves as the skilled workforce for hire for their services, how can they collectively use their power to set prices, conditions, engage with regulation, etc is an interesting alternative approach to the unionization. I really appreciate the enthusiasm around it and I love it in so many contexts.

Speaker 1: 1:09:13

Hearts in the right place.

Speaker 2: 1:09:14

Yeah, no, I'm so for it, but I'm not sure it's the most impactful thing to do in Web3 at the moment.

Speaker 1: 1:09:24

Read a smart contract developers guild. Community manager guild everything like that as a starting point, where at least there's a place where people can talk about their working conditions in the first place, as a stepping stone perhaps, if it makes sense.

Speaker 2: 1:09:42

I mean exactly. It's just a different form of collective bargaining as well that does not assume this employer to, for example, antagonist.

Speaker 1: 1:09:51

Right. When your employer is like an anonymous group of token investors, then it's hard to. There's no central points that you can attack necessarily to induce higher wages.

Speaker 2: 1:10:07

I mean, I think a lot of dows right now there is, but ideally there is not.

Speaker 1: 1:10:11

Sure, yeah, that's true, I think, part of. I think actually, if there were to be labor unions in Web3, it would disprove the decentralization.

Speaker 2: 1:10:22

That's an interesting question, but yeah, yeah, no for sure.

Speaker 1: 1:10:28

Yeah, all right, thanks so much, tara for coming on. And yeah, do you want to plug? I don't know your social media or anything.

Speaker 2: 1:10:38

Sure, I'm terrible at it, but I do from time to time try to repost things on Twitter at mpg underscore dd, so yeah.

Speaker 1: 1:10:50

Cool, thanks so much.