Discontent among users was brewing long before Twitter’s board of directors finally decided to accept a $44 billion offer from Elon Musk to buy the company – a big indication of how important its sale to the world’s richest man could be.
That the sale appears to be going ahead is no shock, even though Twitter’s board was clearly opposed to the idea, adopting a “poison pill” strategy days after Musk’s formal bid was lodged. However, the board ultimately had little choice but to accept the offer – given the huge premium Musk was offering, the alternative would have been for the board to violate its fiduciary duty to shareholders.
With Musk’s promise to make Twitter more democratic, the deal could well prove to be a major setback to those who support censorship – and a big win for those who support the free exchange of ideas.
When he first announced he’d taken a sizable stake in Twitter, Musk came out in opposition to the company’s policy of silencing the opinion of those it disagreed with. Musk made it clear that he believed Twitter was “failing to adhere to free speech principles” and that by doing so it “fundamentally undermines democracy.”
Musk may well have alternative reasons for wanting to buy Twitter, but his main motivation appears to be to strengthen its commitment to the ideal of free speech.
“Twitter is the digital town square, where matters vital to the future of humanity are debated,” he said in one of his numerous tweets on the subject.
In true democratic fashion, Musk kicked off his bid to acquire Twitter by staging a poll, where he asked his followers whether or not they believe the site “rigorously adheres” to the idea of free speech, warning that the consequences of the vote “will be important”.
In the weeks that followed, Musk again took to Twitter to crowdsource ideas and opinions on what changes should be made, voicing ideas such as an “edit button” for tweets, the sale of verified check marks to anyone who desires one, and even transforming Twitter’s physical offices into a homeless shelter, given that most of its employees now work remotely.
Most of those tweets have since been deleted, but not before a Coinbase employee pointed out how Musk’s polls were similar to the “on-chain community governance” that’s characteristic of decentralized autonomous organizations, or DAOs.
As every crypto fan knows, DAOs are community run organizations that allow token holders to vote on various issues, enabling collective decision making on future updates, goals and other important topics.
Power To The People
The suggestion is that Musk might choose to run Twitter similarly to a DAO – and who knows, perhaps even create one? Not everyone will believe this is a wise idea, as the kind of impulsive decisions voters tend to make have little consideration for concepts such as market research or business trends and sales – the traditional metrics normally used to guide business decision makers.
Yet Musk’s apparent desire to reshape Twitter based on what its community thinks may have some merit if we look at some real-life examples of the people executing their power.
Perhaps the biggest example of public opinion being put into practice was Brexit in the U.K., where voters narrowly and controversially opted to leave the European Union. Many, many people thought the idea was madness at the time and the exit was certainly rushed and quite chaotic, with the U.K. government struggling to agree terms with the EU, resulting in the resignation of previous prime minister Theresa May.
But the U.K. went with the people’s voice anyway, for better or worse, and while opinions remain split on the wisdom of Brexit, it certainly hasn’t spelled the disaster that some had predicted. Indeed, the new prime minister Boris Johnson proclaimed in January that Brexit has been a “big success” and it’s an opinion that has been echoed by many other prominent voices. The French political analyst Marc Roche told the Express newspaper in February that Brexit has left the U.K. “in a better position than Europe”, economically speaking, and that it will likely bounce back from the current downturn much more quickly than the EU does.
“The success of the vaccinations has given an optimistic factor and one can except the economy to bounce back like in the US over the summer,” Roche said. “Europe will be waiting until the fourth quarter to return.”
Referendums such as Brexit are among the most common examples of people exercising their power and there have been many other examples where the outcome of such votes has led to an improvement in people’s lives. For instance, just prior to the collapse of the Soviet Union, Latvia, Lithuania, Estonia, and Georgia all voted in favor of independence, and citizens of those countries have since enjoyed a remarkable improvement in terms of both freedom and their respective economies.
Many assume that the history of democratic governance dates backs to the ancient Greeks. But plenty of other civilizations have adopted systems that give power to the people. One of the most interesting is that of the Vikings. Despite being portrayed as barbaric savages that raped and pillaged across Europe, the Vikings were actually very civilized in many ways, but especially in terms of their political system.
Viking governance revolved around an idea known as “the Thing”, where decisions were made at local levels within each community. Individuals who had issues would raise them in front of the entire community, where everyone who wanted to have their say on the matter was free to voice their opinion. At the end of these debates, the community would then vote to settle the issue once and for all.
Decisions were based on the majority consensus, and would be made official by the local chieftain. In many ways, the Thing was even more democratic than that of the ancient Greeks, because women had an equal say in all matters within Viking societies.
In modern times, the spirit of democracy is perhaps best exemplified within the crypto community. The original DAO project was known simply as “The DAO” and was designed as a venture capital fund that would serve to boost the ecosystem around the then-nascent Ethereum blockchain. Things got off to a great start, with The DAO raising more than $150 million worth of ETH, or 14% of all ETH coins in circulation at that time. Unfortunately for those who had participated, things then got out of hand – The DAO was hacked and someone stole more than $50 million worth of ETH from its wallet. It later transpired that the hacker had taken advantage of an error in the DAO’s wallet code.
Obviously, the Ethereum community was extremely worried about the loss of the funds that had been raised, with the value of ETH rapidly falling from $20 to less than $13. However, it then emerged that because of the way the DAO’s smart contract had been written, the hacker was unable to access the stolen funds until after 28 days. So the Ethereum community ultimately held a vote, deciding overwhelmingly to create a hard fork of the project, essentially resetting the Ethereum blockchain to a time before the hack. In this way, the Ethereum developers were able to refund everyone who had lost money.
The decision to fork Ethereum wasn’t unanimous though, as some felt it better to keep the original blockchain – thus the rival “Ethereum Classic” cryptocurrency was born.
While not everyone agreed with Ethereum’s fork, it’s hard to argue that the decision wasn’t the right one, as Ethereum has since grown to become the most important blockchain in the crypto industry after Bitcoin, with the second most valuable cryptocurrency. It has emerged as the undisputed “king of smart contracts”, hosting thousands of decentralized applications, games, metaverses and NFTs that collectively hold billions of dollars in value.
DAOs Provide A Voice
The DAO gave rise to the birth of multiple other DAO projects that have since become instrumental in giving people within various communities a voice and the opportunity to have their say in the decisions projects make.
One of the most famous recent examples of a successful DAO is UkraineDAO, which set itself the very straightforward goal of collecting and distributing crypto funds to help people affected by the war in Ukraine. It launched a number of successful fundraising initiatives, including auctioning an NFT-based image of the Ukrainian flag, which was sold for 2,258 ETH (worth $4.7 million at the time).
Another DAO that hit the headlines last year was ConstitutionDAO, which was set up by crypto and history enthusiasts with the goal of buying one of just seven original copies of the U.S. Constitution, which was being auctioned by Sotheby’s. Although ConstitutionDAO raised millions in its effort, it was ultimately outbid for the prestigious historical document. Where it did succeed however was in vaulting the idea of DAOs into the mainstream, highlighting both the power of community organization, and also the speed at which it’s possible to raise money. It has since evolved to try and raise money for other causes, such as the Free Ross Movement that’s seeking clemency for Silk Road founder Ross Ulbricht.
Also looking to raise money for good causes is EarthFund DAO, an organization that’s targeted at people who want to contribute towards building a better world. EarthFund DAO operates a crypto-based fundraising platform that’s seeking to address a variety of causes, including carbon removal initiatives to create a cleaner environment, and mental health projects that aim to provide treatment to those who need it most.
Members of EarthFund DAO are free to select and donate to the causes they support most, and then vote on which specific projects within those causes that they want their donations to be spent on.
The concept of DAOs has since extended to various social causes. Take Pleasr, which is a collective of artists and art lovers that buys up NFT artwork and other digital collectibles. It’s an experiment with the idea of “fractional ownership” in art, because every member essentially owns a small share of the art it acquires. DAOs have also begun experimenting with the idea of running a small business. For instance theCafeDAO recently opened a pop-up coffee shop in Seattle in the U.S., as a kind of test to see if it’s possible to run a brick-and-mortar business using the community governance model. TheCafeDAO coffee shop serves just one item on its menu – a pour-over coffee that sells for $5 a cup, and brands itself as the “cafe that everyone owns”. Those who hold CafeDAO tokens don’t earn a share of its profits, but they do receive tokens that entitle them to discounts on coffee, and they can vote on business decisions.
A DAO-Like Twitter?
The successful initiatives of these early DAOs have shown that there’s a lot of merit to the idea of having a democratically-run platform that allows its users to make the decisions. If there’s one key takeaway from the experimentation with DAOs so far, it’s that communities tend to make such initiatives work, regardless of the direction voting takes them. In the case of Brexit, those who voted to remain have nonetheless done their best to get on with life and make the most of the U.K.’s newfound independence. And things haven’t gone badly for those who vote in the opposite direction. Ethereum Classic, the original version of the Ethereum blockchain, is still going strong today, ranked 28th in terms of its total market capitalization, ahead of well known projects such as Cosmos, Algorand, Decentraland, Tezos and Bitcoin SV, to name just a few.
Whether or not the DAO model can be applied to a business scenario remains to be seen. TheCafeDAO has proven popular so far but is still very much an experiment at this time. But given the numerous historical examples of things working out when the community does have a right to vote equally, there’s reason to think a kind of DAO-like model could work out well for Twitter. In any case, Twitter has a big advantage in that it’s almost too big to fail, even if it doesn’t always make the soundest business decisions.
That’s not to say Twitter will adopt a true DAO-style model. Such a scenario would seem unlikely. But if Musk decides Twitter must adhere to free speech principles, it will surely mean the community gets a very big say in how its future is shaped. That would be more than good enough. A DAO-like Twitter, where people can exercise their say on how the platform is run, will be a big win for democracy and the court of popular opinion, no matter how it’s implemented.
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