A 1924 quote about decentralizing big business through share ownership mirrors today's Web3 promises. But requiring every user to vote on every platform creates "token feudalism," where each blockchain becomes its own fiefdom. Delegation-staking lets users enjoy services without governance overload.
Recently, I bumped into this quote that I found incredible by Edson White, who's president of a meatpacking company called Armour and Company. And the quote is, big business is rapidly becoming decentralized and it desires to be. And what I found amazing about this quote is The date. That's a quote from 1924. What? It's almost 100 years old, right? So this conversation is not new. What Edson White meant by that is that the decentralization of big business was happening because more and more people were becoming shareholders. More and more people in the general population were investing a part of their disposable income into shares. And by that, we were dispersing authority by having more and more people who could potentially vote on the major proposal coming from management. Now, 1924, we're like in this period that's leading up to the 1929 crisis where, you know, millions and millions of Americans were like buying shares in companies, making a lot of money on that until the bubble popped in 1929, right? But so You see that to understand authority dispersion, you need to look at these different levels. So do we want, is it desirable that everybody is a shareholder and everybody has a right to vote? Is it desirable to have a lot of people who vote and do not necessarily have an expertise in the topic that they're supposed to vote about? Is it reasonable to believe that people will vote on everything that happens about within every digital platform they are a member of, even loosely speaking. And so here's, I think, the paradox of Web3, one of the paradoxes of Web3, that by wanting to push for more democratic decision-making, consultation processes, we may be doing things that are counterproductive. And we may be forgetting that there is value in bureaucracy. We may be forgetting there is value in having managers to whom we can delegate particular types of decisions in a way that's reliable. Imagine that by trying to make capitalism more efficient through these democratic consulting processes, I have a token, I can vote. Imagine that We could in fact be going backwards and creating a form of token feudalism. So going back to what was there before capitalism, a form of medieval feudalism whereby every blockchain platform becomes some kind of fiefdom independent from the other fiefdoms. And if you are a user of, let's say, 17 platforms, for different purposes. One is like for music, one is for sharing videos, one is for, you know, sending payments, et cetera, right? You end up with 17 different tokens across maybe 9 different wallets on your smartphone. And every day you are being prompted to vote for whatever is happening on each and every one of those 17 platforms, keeping an eye on your tokens, trying to understand the rules of each and every one of those digital platforms that each represent a fiefdom with its own rules, each represents as its own currency, as its own unit of measurement for market value. Right. That is not necessarily something that would be desirable. That's an open question. But it's also quite unrealistic to believe that this would function and that in terms of user experience, this is what people would appreciate. No, I agree. And so this is where bureaucracy shows some value. It shows that by standardizing processes, making them stable, constant, and delegating authority to people who are knowledgeable, you are actually relieving users from a burden that they may not want to carry on their own shoulders. And so I think Web3 experts, entrepreneurs, investors, users, developers, we should all, researchers, we should all have this conversation. What are we trying to build here? Are we really trying to envision a state of the world where maybe 10, 20 years from now, everybody's expected to manage 123 different tokens and then vote all the time on all those things, even if they have zero expertise about it? Are we actually rediscovering the value of delegation and bureaucracy through mechanisms such as delegation staking, where we are basically saying, well, I have all these tokens, but I don't want to worry about it. I don't want to vote. You know, I just wanna listen to music. That's why I'm on this platform. So here are all my tokens and I delegate all my voting rights to A, B, or C.
