An exerpt from a longer draft about DAOs
My Beef with Multisigs
I'll cut straight to the chase. My Big Beef with multisigs is that individuals cannot remove themselves, unless specifically given token-burning permissions. This violates an individual’s right to freedoms of movement, exit, and autonomy, which I think violates the ethos of the crypto community. More than a theoretical objection, this limitation creates real potential harm to and manipulation of multisig signers. This creates a potential issue with quorums and minimum support, allowing remaining DAO participants to manipulate the non-participants lack of participation to their benefit against the will of the non-participant. It also presents a liability concern.
I’ll start with my concern about quorums and support. For example, imagine an organization with 5 people, and 50 percent of the organization must participate in a given vote for its results to be valid (quorum) and of the people participating, 50% must vote in support for a ballot to pass (support). Imagine that one person in that organization is no longer interested in participating. Of the four remaining participating members, two hold one stance on an issue, and the other hold an opposing stance. Depending on who has permission to add and remove signers, their incentive to remove the inactive member varies. If the person does not want the proposal to pass, then they have an incentive to keep the inactive signer and simply not participate in the vote, thus avoiding passing the proposal. If they do want the proposal to pass, then they should remove the signer; in that circumstance, as long as they (or the other signer sharing their stance) are the first or second person to vote, the proposal will pass. The same logic stands if the permission is assigned to the voting app.
My other concern is that DAOs exist within a legal grey area, making participation in them a potential liability for members. DAOs are generally considered in “general partnerships” with their participants, which means that participants all hold legal responsibility for the actions of the organization. This means that if the DAO starts to behave in a way that is determined to be illegal, the signers may be held responsible for the actions of the DAO. In part to remedy this issue, OpenLaw now has a framework for creating LLC and other legally-compliant DAOs. But this is new, and most Aragon DAOs (or other multisigs) have not registered as an LLC. This being the case, it stands to reason that if a signer is considered legally liable for the DAO’s actions, then that signer’s right to exit the organization is of particular importance. Though, I am told by people wiser and more educated than myself that even if a signer were to exit, there are circumstances where a former signer could still be held liable.
My other beef with multisigs may be less universal, though it’s still relevant across many voting apps, and is definitely true in Aragon: The damn things will not take no for an answer. Once the minimum support threshold and quorum have been reached, BAM, it’s over, even if the quorum was wicked low and the timer’s got a year left. This alone is highly irritating for the reasons I described above, but it’s even worse because “no” responses do not hold the same power. Even if you get 100% voter turnout and every last one of them votes “no,” the vote stays open, just in case enough people change their minds before the end of the vote. Call me a snowflake, but the asymmetry in the power between “yes,” and “no” responses is socially untenable in 2019.
Tell me, are my concerns bullshit? Plz and thank you.