The Man Who Got Fired By His Own DAO

One of the numerous aspirations for “web3” is that you may doubtlessly take positive messy, emotional human tactics and smooth them up with the aid of using placing them at the blockchain. “Smart contracts” write their phrases at once into code, and movements they take are each public and irreversible. Enthusiasts trust this type of “trustless” device can allow human beings come collectively to paintings on tasks that they in any other case may now no longer.

The Man Who Got Fired By His Own DAO

One of the numerous aspirations for “web3” is that you may doubtlessly take positive messy, emotional human tactics and smooth them up with the aid of using placing them at the blockchain. “Smart contracts” write their phrases at once into code, and movements they take are each public and irreversible. Enthusiasts trust this type of “trustless” device can allow human beings come collectively to paintings on tasks that they in any other case may now no longer.

If you get sufficient of these human beings collectively to paintings on a venture, you would possibly have a decentralized self sustaining organization, or DAO. The Ethereum network, on which many DAOs run, describes them as “a secure manner to collaborate with net strangers.” Remember while heaps of human beings got here collectively inside days to raise $forty seven million in an attempt to shop for a replica of the Constitution? A DAO is how they did it.

DAOs may be ruled in diverse ways, and one manner is to problem governance tokens. The cryptocurrency change platform Uniswap, for example, issued tokens to network members, employees, investors, and advisers, and allows them to vote on “improvement proposals.” Imagine that Instagram allow you to vote on which functions it ought to expand next, and you`ve were given the primary idea.

One web3 startup that created a DAO is Ethereum Name Service, or ENS. If you`ve been on Twitter and visible a person whose username ends in “.eth,” you`ve located an ENS customer. ENS handles may be sold and offered like internet area names, and will constitute the begin of an identification layer for web3: like logging in together along with your Facebook account, however for crypto. (The venture remains pretty small, with the aid of using the requirements of the broader net: ENS says approximately 300,000 human beings have registered names to date.)

I have become acquainted with ENS closing summer time season as I started to familiarize myself with the crypto world. My intention become now no longer to come to be a dealer or investor. Rather, I desired to apply crypto merchandise simply sufficient to get the dangle of them, in order that I may ask higher questions and write extra exciting stories. And so I installation a pair crypto wallets, one with Coinbase and one with a agency known as Rainbow, and funded them with $one hundred every in ETH, the foreign money of Ethereum.

I tweeted some thing approximately those explorations, and a few best human beings at Rainbow reached out and requested if I had taken into consideration putting in place a call on ENS. I hadn`t, however once I checked out its website, I noticed the appeal. My crypto identification in the mean time consisted of an un-memorizable string of letters and numbers. With ENS, I may want to definitely be caseynewton.eth. So I registered that call, along side platformer.eth, for what struck me because the good deal charge of $five in step with 12 months apiece.

I actually have due to the fact accomplished not anything of use with my new web3 identities, due to the fact in the mean time there is essentially not anything to do apart from to log into cryptocurrency exchanges.

Anyway, on November 1st, some months when I had obtained my .eth names, ENS introduced a DAO. Here it`s really well worth pronouncing that ENS has a difficult organizational structure, even with the aid of using the requirements of web3. As first-rate as I recognize it, there's a Singapore-primarily based totally nonprofit agency named True Names Limited that leads and helps ENS. ENS itself is a decentralized protocol that runs autonomously.

The DAO represents a in addition attempt to decentralize the venture. Brantly Millegan, who become then the director of operations at ENS and the venture`s de facto spokesman defined the attempt this manner:

The middle additives of ENS are decentralized and self-running (e.g., nobody can remove any other person`s .ETH call), however there are some matters that require a few human discretion. We trust that each ENS and the DAO area have matured sufficient that now's the time to byskip ENS governance over to the network thru the advent of a DAO and the $ENS governance token.

If you owned a .eth deal with on October 31, you may declare your percentage of governance tokens. The unique range become decided with the aid of using how lengthy you had held your call, what number of names you had registered, and the way energetic you have been withinside the network. Once you claimed your tokens, you may use them to vote on proposals at once, or you may delegate your vote to a person you trusted.

I had no particular opinions on how ENS should be run; most of what I know about the company I learned writing this column. In November, though, this seemed like exactly the sort of exploration of crypto I had hoped to undertake when I began the project: a lowstakes effort to understand DAOs and community governance by becoming a passive participant.

I bought a little more ETH to cover the transaction fees — here is your periodic reminder that Ethereum is the slowest, and most expensive, and hardest to use computer in the world — and soon, 251 ENS tokens belonged to me. I delegated their voting power to someone I follow on Twitter, and stopped thinking about it.  It was then that something unexpected happened: the ENS tokens, which can be bought and sold on cryptocurrency markets, quickly became very valuable.

At some point, the crypto wallet showed that my assets were worth over $20,000. As a journalist who has not yet  fully considered the ethical policies around cryptocurrency use, this seemed like a rather disastrous (albeit funny) development. This was more cryptocurrency than I was going to own, and to make matters worse, I may have to write about the company someday. While thinking about the problem, I was forced by the news cycle. In particular, Brantley Millegan reached out to me.

In keeping with the complex nature of the ENS project, Millegan served many roles. For three years he was director of operations of True Names Limited. When the DAO was formed, he became one of a handful of official “stewards” guiding its development; and also as its top delegate, receiving more delegated votes than any other person or company. (Coinbase and Rainbow are also top delegates in the ENS DAO.) There`s more: the ENS tokens are governed by a separate foundation; Millegan was (is?) a director.  In recent weeks, as their profile grows, some leaders in the web3 community have been the subject to one of the world`s most dangerous acts of scrutiny: a search through their old tweets.

Last month,  investor and influencer Cooper Turley was expelled from DAO Friends with Benefits  after being found using racist and homophobic language in a series of tweets in 2013. (He apologized.) This week, the community manager of the NFT SuperRare trading platform "breaks up" with the company after several old racist tweets were exposed. "I'm glad to see some PPL finally reading the first words of my biography."

Millegan is a Catholic and has conservative reactionary  views. In 2016, he tweeted, "Homosexual behavior is evil. Transgender people don't exist. Abortion is murder. Contraception is perversion. So is masturbation and porn.”

When asked about this Saturday, Millegan — whose Twitter bio identifies him as Catholic — doubled down. “hey looks like I`ve got my first mob,” he tweeted. “nice to see some ppl finally read the first word of my bio. I love you all, I`m gonna keep working on web3.”
Members of the ENS community lambasted Millegan, both for making his original comments and standing by them. Twitter suspended his account. In the ENS Discord server, Millegan wrote that despite his views he had “never excluded anyone from ENS or my work (or even my personal life) because of who hey are or what they believed.” He went on:

I believe in working with, and also being friends with, a wide range of people. … Yes, I believe Catholic doctrine (not a secret), and I`m not changing that, and I don`t think it`s practical or moral for the web3 industry to exclude the many traditionalminded Christians, Muslims, Jews and others who agree with me. I`m obviously aware many people disagree with me and that`s fine. I believe in tolerance with a wide net, I live that out, and I ask others to give me and other the same.

Typically in this case, the decision about what to do next is left entirely to the head of the company. That can be frustrating to the employee, who often has no recourse; and to the public, which is instead left to campaigning on Twitter, organizing boycotts, or other indirect protests.

Millegan's case was different, however, because of the DAO.  In the aftermath of his tweets, some members of the ENS community saw an opportunity. turn it into reality.” He added, “For the ENS community, the power is literally in *your* hands.”

Normally, people should keep tweeting about ENS or organize some sort of boycott. because of the ENS DAO, they had an alternative approach. They could remove him from his admin role, which they did. And they could re-delegate their tokens away from him. (ENS eventually created a way to people who have at least 100 tokens to redelegate them without paying transaction fees.)

Over the weekend, I joined a conversation on Twitter Spaces where members of the ENS community discussed the situation.Many have been advanced to share the anxiety of Millegan's observations.As Crypto and Evangelist Investor Chris Dixon, said  the weekend since everything happened, "I do not like something," he said?

I don't know the answers. But I suspect this won't be the last time  a mad scientist of community governance will be attacked by his own creation, and in new, blockchain-powered, novel ways. In ' I also learned my lesson about acquiring government brands in the name of journalistic curiosity. To my relief, the price of ENS tokens is down about 75 percent from its peak. But even after I  sold them (eventually!) over the weekend, they were still worth an uneasy $5,000 or so in ETH.

It doesn't feel good to have benefited from it. As soon as I can figure out the tax implications, I'll sell all but a nominal amount of ETH and donate the proceeds to the Trevor project.  I'll mention it here in this column when I'm done.  Editor's Note: Verge's Ethics Policy prohibits full-time Verge employees from owning cryptocurrency or stock in  companies we cover.If we  need to buy crypto products for reporting, we will disclose this.