The term ’institutional isomorphism’ refers to similarities in the structure and processes of independent organizations. In the past, the spread of information and the adoption of similar practices was slower and often limited to organizations within a single country or region. But in the newly emerging institutional field of blockchain networks and decentralized autonomous organizations (DAOs) [1] that benefit from near-instant global communications via the Internet, isomorphism develops much faster.

In their 1983 paper titled “The Iron Cage Revisited: Institutional Isomorphism and Collective Rationality in Organizational Fields,“ DiMaggio and Powell [2] discuss three forms of isomorphic change: normative, mimetic, and…

Computer software is arguably one of the most impactful technologies of our time. Over the past few decades, major changes in individual behavior, work habits, social organization, and wealth distribution have been triggered by software innovations, and everything suggests there’s more to come.

One way to categorize software-based services is how decentralized and censorship-resistant they are. Systems operating on a peer-to-peer instead of client-server architecture are more decentralized and, by minimizing reliance on powerful intermediaries, provide individual users with more agency and control over their information and interactions. [1]

An example of such a technology is Radicle, a decentralized application…

Introduction

Speculation and risk-taking are essential features of all monetary economies and both are closely tied to the financial sector. History has shown that without appropriate rules, safeguards, and behavioral norms, financial markets become more prone to fraud, pro-cyclical excess, and crises. Occasionally, these crises take systemic proportions, threatening the stability of the economic system as a whole. In a worst case scenario, a financial meltdown can lead to an economic depression, extreme social divisions, or even violent political conflict.

There is no universal path to preventing financial crises from happening. In a fundamentally uncertain world where people are free to…

Digital technology systems have emerged as one of the most important organizing structures of contemporary society. As a result, the challenge of governing social systems is increasingly overlapping with the challenge of governing digital technology, the scope of which is rapidly expanding through blockchain-related innovation and a general trend towards automation.

Governance is the process of applying any design feature or control mechanism that maintains and steers a system. Digital governance has a dual meaning. First, it refers to using digital tools to guide and manage personal lives, organizations, markets, and societies. The second, more common, meaning concerns the control…

Automation and Progress

The ability to invent and use tools is a defining attribute of Homo sapiens that led to the emergence of civilization. A key concept for framing the subsequent effects of technology on society is automation: any technique that reduces the need for human assistance in performing a task or completing a process.

The connection between automation and progress is well understood. Although formulated in a different context, a quote from more than a century ago by the philosopher and mathematician Alfred North Whitehead sums it up nicely: “Civilization advances by extending the number of important operations which we can perform…

Based on my research over the past couple of years, I’ve put together a list of ten theses on decentralized network governance, including base layer public blockchain networks and applications (smart contracts) running on top of them. The ten ideas are listed from the more general and theoretical (descriptive) to the more specific and practical (prescriptive). The first five are revised summaries of my previous writing; the latter five are derived from more recent observations.

I define governance as the process of applying any design feature or control mechanism that maintains and steers a system.

1. Blockchain-related technological and institutional…

The principles of free and open source software (FOSS) are fundamental to the ethos of the communities building blockchain networks. While it is not uncommon for a single organization or small group of core developers to coordinate and deliver most of the work, the source code is generally open for everyone to inspect and improve upon. Control is maintained not by keeping software proprietary, but through social and institutional means, including ideological discourse, community management, and trademark license agreements. Despite the unique governance challenges from issuing network-specific assets to operators, investors, users, or other stakeholders, there are important similarities between…

Governance is the process of applying any design feature or control mechanism that maintains and steers a system. In the context of blockchain networks, this includes the protocol used by the nodes on the network to administer data, as well as various social and institutional arrangements that determine how decisions are made and implemented with regard to software upgrades, community management, conflict resolution, etc.

Many blockchain networks and applications involve a native token, the exact purpose and functionalities of which vary depending on the context. In some cases, governance authority is formally token-weighted, which means that holding more tokens results…

This post is a comment on Lane Rettig’s essay Autonocrats and Anthropocrats, connecting its central themes to two fundamental concepts in social sciences — the rule of law and social structure. It explains how the most informative analogue to a decentralized network of nodes running autonomous software is society itself. Digital record-keeping and distributed computer networks are comparable to other institutions with effects beyond the control of their creators, administrators, and users. …

There are important patterns in the historical development of finance, most notably systemic crises associated with the collapse of asset prices or income flows and the recurring interplay between financial innovation and regulation. Understanding these patterns can help the architects of open and automated crypto-financial services, known as DeFi, to assess potential risks and prepare for different economic and regulatory scenarios. This article highlights some relevant historical precedents and considers the potential long-term implications of this latest wave of financial innovation.

Finance and Creative Destruction

The Austrian-born American economist Joseph A. Schumpeter famously popularized [1] the idea that at the heart of capitalism lies…

Mario Laul

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