• Martin Schmalzried

Scaling local DAO memberships : the Web-of-Trust protocol

Global DAOs have been around for some time now, and solutions for membership have taken many different forms : holding a « governance » token, staking a governance token, holding a special NFT, fulfilling certain conditions like actively participating in a community and being airdropped a form of non-transferable recognition in the form of a token, or receiving « up » votes from within the community.

While these solutions work well for global DAOs, they do not scale well at the local level, when you want to onboard people who live within a certain perimeter or area. One example includes local DAOs designed to help local communities govern a shared or collectively owned piece of land. In this case, membership to the DAO cannot be bought or sold through a governance token or an NFT. And doing « manually » is not an option either : for the DAO creators to knock on every door of a neighborhood or even a town and manually issue non-transferable tokens to each person, to make sure that they fulfill the conditions for becoming a member of the DAO (for instance, their physical proximity to the piece of land to be collectively managed).

Thankfully, the Web-of-Trust protocol can scale such a local membership quickly and in a decentralized way. It has been used successfully, so far, to scale the Duniter blockchain in France and Belgium. The rules and principles for propagation can make it slow, but ensure that the network is protected against the creation of fake accounts.

In a nutshell, the Web-of-Trust protocol, as implemented for the Duniter blockchain, works as follows :

1) The developers of the Duniter blockchain create at least 5 certified or verified accounts which hold the power to issue 100 certifications.

2) Anyone can create a Duniter account, but such an account can only receive the Duniter currency, not generate any new currency.

3) In order to create a verified or certified account, you need to obtain at least 5 certifications from 5 different people.

4) The rules for issuing certifications is to meet the person who wants to be certified in person (in a physical meeting where you can verify with absolute certainty that you are certifying the account of a “real” human).

5) Once a person is certified, he can in turn issue 100 certifications.

6) Accounts expire every year, and certifications need to be renewed at least on a yearly basis, or your account looses its status as a certified account.

7) Any user can renew the certifications he or she has issued before they expire, or if they expire, they regain the ability to transfer the certification to another account.

This system allows to scale membership of a network in a very localized way, since in order to join the network, you need to meet in person at least 5 people who are already certified. Such a network can quickly propagate at a very local level. Even though there is no limit to its potential propagation, normally, in the example of the collective governance of a piece of land, the propagation would naturally stop due to lack of interest in participating in such governance, if the piece of land is too far removed from where you live. If a person lives 50 km away from such a piece of land, it stands to question why would such a person want to be part of the network, as he/she would likely not benefit from whatever is being built on the piece of land anyways. Furthermore, there can be artificial limits set to the propagation of the network, by creating a rule which limits the number of certifications you can issue depending on your “distance” to the core creators of the local DAO. For instance, when the local DAO is created, 5 core members are given accounts which hold the possibility to issue 128 certifications. The accounts that get certified by these initial members can only issue 64 certifications, the accounts which are certified by this second layer of members can issue 32 certifications each, and thus there would be a maximum degree of propagation of the network, where any account which is at a “distance” of more than 6 or 7 people would be verified but could no longer certify any other account. Such rules can be tweaked to ensure an optimal propagation of the network.

The Web-of-Trust protocol has several key advantages:

  • It doesn’t require a manual KYC or identity verification process for onboarding people or managing the membership of a local DAO;

  • It can scale relatively quickly in a proactive community. In the case of Duniter, the network frequently organizes “in person” meetings to inform interested people about Duniter and issue certifications for all those who attend the meeting. This also encourages people to maintain strong social relationships and networks. For instance, within a neighborhood, when there are at least 5 people with a verified account, they can hold a meeting for other neighbors and issue certifications at the outset.

  • Once the network has reached a certain maturity, it is self-maintained and people naturally join and drop out without the need for managing it manually. For instance, in the case of a local DAO, people that do not care at all about managing the local piece of land will let their certifications expire and their account would naturally loose its governance rights. People in the network are the guardians against any attempts of a “take over” of the network. For instance, if a neighboring city wants to take over the DAO, they would need to convince enough people to issue their certifications in order to propagate the network to their city and gain more influence over the local DAO. However, as explained above, there could be rules which would naturally prevent such attempts by capping the propagation of the network.

  • With the Web-of-Trust protocol, it is easy to spot any accounts that seek to “cheat” and create fake accounts, via a map of connections and certifications. For instance, it is easy to identify a cluster of members who have all received certifications from the same 5 people, which may signal an attempt by 5 people to create fake accounts to gain more control over the network. Normally, social ties are diversified and varied, and people will receive certifications from a variety of people and not systematically the same 5 people. On top of that, any account can obtain more than 5 certifications which makes it even more “trustworthy” as it is tied or linked to a more diverse social web.

In conclusion, the Web-of-Trust protocol should be considered by any local DAO wishing to onboard people based on their localization as opposed to other criteria like owning a transferable token.

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