macropolo

Writer, Blogger, and Gaming Enthusiast. Follow me on Twitter @MacroPolo707.

Every so often, I’ll come across an article in a mainstream Canadian publication that is so tone-deaf and so wildly illogical that it actually makes me angry. Robin Sears, who served as an NDP strategist for 20 years – which should give you some clue about where his political leanings are, published an article in the Toronto Star titled, “Inflated house prices are widening inequality, and inheritances will only further the gap.”

When he mentions inheritances widening inequality, he doesn’t mean only the inheritances of the upper echelons of the billionaires and close billionaires. He is talking about the inheritance of your average middle-class millennial. Housing prices are high, and as he says in his article if you were lucky enough to have parents who own property (almost any property in one of Canada’s major metropolitan centers), you are slated to inherit potentially millions of dollars.

Tucked into a series of reasonable prescriptions towards tackling the affordability crisis for millennial homeowners is this: ”...inheritance taxes and taxes on capital gains that are less inequitable to wage earners.” As most of us know, the economy has been eviscerated and the only form of reliable wealth that most Canadians have is their property. So why not go after that? You can't pay the kind of salary that helps senior bureaucrats hit that coveted sunshine list when you've destroyed the income generating capabilities of your tax base.

Here’s a snippet from the article:

They will be pushed further down the family asset ladder by the tsunami of cash passing to friends and colleagues. The only difference between them: parents made rich by a frenzied property market. This unfairness will discourage new immigrants and undermine poorer Canadians’ dreams of better lives for their children. Unchecked, it will breed serious social conflict.”

The basic flow of his argument is this:

1) Millennials aren’t making any money.

2) Housing prices are too high for your average millennial to be able to afford a house without inheriting it. So,

3) Let’s take their inheritances.

4) Redistribute

Apparently, the problem isn’t that millennial Canadians cannot earn an income that allows them to afford a house. The problem is that some millennials were lucky enough to have been born into families that have managed to achieve the unconscionable act of owning a home – this terrible bourgeoisie predatory capitalist action of merely owning a house.

This is an interesting strategy for a socialist to take. It’s a bottom-up approach to wealth redistribution, where they take from the middle-class and redistribute that wealth. But I’m wondering if they’ll eventually climb far enough up the income ladder to hit the multi-millionaires and billionaires that they love to vilify in rhetoric. Maybe once the rest of us are so poor that there’s nothing left, the burning eye of Sauron will finally gaze upwards at the class of people it should be taxing.

If you have any additional thoughts or questions, don't hesitate to reach out on Twitter @MacroPolo707.

If you enjoyed this article and would like to support future content, please consider signing up for Coil using my affiliate link.

#politics

There's a phenomenon I've noticed within collapsing societal and ideological frameworks where lived experience doesn’t line up with the dominant socio/cultural framework. By that, I mean how we talk and think about ourselves as a society contradicts what we experience living in that society.

It was something that I experienced years ago when my grandmother fell ill, and we had to deal with provincial healthcare and eldercare authorities, like the then called CCAC, which has now rebranded into the LHIN (Local Health Integration Network). I want to think that the rebranding was due to how reviled the CCAC was with most Ontarians, but I can't say that for certain.

What I can say, based on my lived experience, and confirmed later by the explosion of coverage of eldercare issues in the media, is that people hated dealing with these overpaid and comically ineffective bureaucrats – the Canadian public service equivalent of Marie Antionette, growing fat and stuffing their pockmarked jowly faces with decadent pastries while families fractured and frayed struggling to care for their elderly relatives.

I remember sitting next to my grandmother while watching the then-premier Kathleen Wynne campaign for the provincial election in Ontario. I hadn't slept much in three days because my grandmother's sundowning had been particularly bad that week. Wynn got on the podium and said something to the effect of, “we take care of people,” and the conservatives don't. I remember looking over at my grandmother and thinking, I don't feel taken care of. Months before that, an overworked and underpaid ER doctor had missed a massive stroke she had suffered and sent her home. A few hours later, we got a call telling us to bring her back.

My experience running through the healthcare and eldercare system with my grandma didn't line up with my expectations of what Canada represented as a country. When we go to school, they march us through a propagandized social studies education program where our public health system is proudly displayed with the suggestion that the Canadian cultural ethos is a caring one.

We look towards our heritage as a nation of immigrants, each disparate culture welcomed to the shores of Canada with open arms and given wealth and prosperity which did not exist where our ancestors came from. Even in conversation with other citizens, we speak fondly of our tendency to take care of the sick and the infirm with a robust and caring social safety net and universal healthcare system. But when I was in the middle of a family crisis caused by a relative's declining health, the failures of these institutions compounded one after the other, and we were left largely to fend for ourselves.

There are people on social media and in the traditional news media suggesting that the pandemic response is a failure by the conservatives, but the gradual decline of our healthcare system is something we've tolerated for longer than a decade. Anyone that's been through the system knows how bad it is, but we choose to repeat these myths and quaint beliefs that the Canadian system cares about the public and that it hasn't been a race to the bottom in terms of the cost of providing quality care.

To those suggesting that this is a sudden and surprising development caused by three years under the Ford regime, well, where have you been the past twenty-five years? It might have taken a pandemic to finally break the back of Ontario's healthcare system, but maybe if you had been more vocal in the past about quality-of-care issues, workers' rights, elder care issues, we wouldn't be in this position.

Now we're at the point where our lived experience isn't lining up with Canadian cultural conditioning and propaganda. People are waking up, and they're not happy. The country doesn't look at all like what we've been promised. The media, elected officials, and government bureaucrats, who are all complicit in the current state of affairs, are desperately shuffling to try to pass the buck on who is responsible. And the ugly truth is that I'm not sure there's a way back for people to start believing the sedating platitudes fed to them by educators and the media.

For those who have seen behind the curtain, like in The Wizard of OZ, there's no return to belief in the magical ethos of the Canadian promised land. Government really is just an old haggard man pulling strings to make a giant marionette dance, and provincial authorities don't care a bit about the plight of the average Canadian. They just pretend to care so they can keep power, and when their regime is threatened with replacement, they'll unabashedly stand at a lectern and say, “we take care of people.”

Of course, it's possible that the rest of the country dodges Ontario's plight, and the public can go back to looking at those desperate people who have been churned through and spat out by our inadequate healthcare system as unlucky eccentrics, meeting their complaints with shrugs and the rolling of eyes. Their warnings about the quality of care experienced in Canadian institutions will go unheard, at least until the next crisis pops up and the smoke from the fire becomes bad enough that it can no longer be ignored.

If you have any additional thoughts or questions, don't hesitate to reach out on Twitter @MacroPolo707.

If you enjoyed this article and would like to support future content, please consider signing up for Coil using my affiliate link.

Header Photo by Berkay Gumustekin.

#politics

It is somewhat comforting to know that while a pandemic rages across the world, there’s still a sense of normalcy to be found in how Canada treats its working class. If you had listened to the politicians a few weeks ago when they took to the pulpit and chastised Ontario taxpayers for being careless with social gatherings, mask-wearing, and all of those prescribed pandemic measures, you probably shook your head and wondered if the public could be trusted with anything.

But, it turns out that a certain class of business and people are the ones who have lit the tinder of another runaway COVID outbreak in Ontario. While the rest of us were forced to tighten our belts and watch our small business fold and our favorite restaurants shutter their windows, there are still companies and institutions that have flouted any social responsibility by denying workers sick pay – a grenade that was ignored until it blew up in our faces and resulted in the most recent lockdown.

If you put these two articles together, you can clearly see the cause of the recent COVID flare-up in Ontario:

You have 53 percent of Canadians $200 away from insolvency, working jobs that don’t give them sick pay. And to top that off, they’re often working in close proximity with each other. These workers then are expected to take the moral high ground (when the company they work for and the province refuses to do so) and stay home from work when they get sick, but if they do, they may no longer be able to pay their bills, buy food, or pay off debts.

The bulk of cases now that seem to be driving this pandemic are happening in workplaces where essential workers are unable to fully physically distance from one another,” said Dr. Camille Lemieux, medical lead for the University Health Network's COVID-19 assessment centre.

I’m wondering when the media personalities and Twitter slacktivists will show up and call these companies out as they have proudly been doing to those who haven’t been marching in step with the rest of us with mask-wearing and vaccinations. What these companies have been doing is arguably much worse, so I’m expecting the public flagellation to be just as bad. Hopefully, any day now.

Had anyone else done the same thing, no doubt they’d easily and proudly pillory them on social media and in news publications. And where were the authorities who had been fining people for having social gatherings? Or for doing a ghastly thing like opening their restaurants or small businesses to the public? One can’t have more than a few people over for dinner, but desperate workers forced to operate in close proximity to each other without paid sick leave during a pandemic is acceptable? Had our public personalities gone after these organizations with the tenacity they show those peculiar anti-maskers, maybe we wouldn’t be in this position. But that would require actual courage and a robust moral backbone, something our media and institutions seem to increasingly lack.

If you have any additional thoughts or questions, don't hesitate to reach out on Twitter @MacroPolo707.

If you enjoyed this article and would like to support future content, please consider signing up for Coil using my affiliate link.

#politics

Sologenic recently released its DEX (decentralized exchange), which is a front end to the XRPL's native DEX. Sologenic is affiliated with Coinfield, one of the few exchanges that allow Canadians to deposit and withdraw funds using Interac e-Transfers. Most Canadian banks will not allow customers to send money to exchanges using debit or credit cards. E-Transfer support is one of the few convenient ways Canadians have to deposit funds onto an exchange, so when a message popped up in the Coinfield app on my phone advertising Sologenic DEX, I was excited to try it out.

You can access the DEX in a web browser and connect either the native SOLO wallet (currently unavailable on iOS) or other third-party wallets like XUMM, Ledger, and the D'CENT wallet. When you sign in with XUMM, the wallet asks you to sign a “sign-in” transaction. When you subsequently try and swap assets, it again asks you to sign the transaction in XUMM before it will allow you to send anything. The sign-in transaction doesn’t gives the SOLO Dex (or a convincing phishing site) the ability to sign transactions for the user, which is good. That's how it should be working.

Using XRP or Sologenic's native asset SOLO, users can trade any asset they've created a trustline for with the XRPL DEX. In their current form, the issued assets are a novelty. If you're going to hold a BTC IOU on the XRPL, you might as well use an exchange or self-custody to hold actual BTC or ETH, particularly because you would then have the option to send the currency to an actual BTC address or to participate in smart contracts and other dapps with ETH. However, if we consider tokenized assets in light of Ripple's push to enable a bridge between private central-bank backed digital currencies (CBDCs) and public ledgers like the XRPL, the DEX starts to get interesting.

If a nation-state were to enable interoperability between its private ledger and the XRPL, it would allow anyone holding the CBDC (a tokenized euro, USD, CAD, etc.) to purchase and hold XRP without using a centralized intermediary like an exchange. From there, they could plug into a multitude of different utility tokens like Casino Coin or use their funds to purchase XRP or participate in DeFi apps on the Flare Network, with every transaction after the initial one occurring without a centralized entity.

It may even be possible for smart contracts to issue tokenized representations of other assets backed by actual collateralized cryptocurrency, fiat currency, and other forms of collateral stored in a smart contract, which would provide holders of the IOUs decentralized assurance of the value of the tokens they're holding on the XRPL. Smart contracts could even send non-native assets to external wallets trustlessly if users wanted to. Beyond crypto, the XRPL DEX and the potential future interoperability with CBDCs would also allow people to use national currency and stablecoins with bridges onto the ledger to buy stocks tokenized on the XRPL.

I wasn't able to play around with the native Sologenic DEX wallet as it doesn't have an iOS client yet but the tokenized stocks and other assets that it will eventually offer will enable people to easily buy stocks, bonds, and commodities on the XRPL DEX. Ripple has been beating the interoperability drum for years, and a DEX integrated with bridges to private CBDC ledgers is a big step towards this goal, assuming central banks and nation-states are willing to sign up.

If you have any additional thoughts or questions, don't hesitate to reach out on Twitter @MacroPolo707.

If you enjoyed this article and would like to support future content, please consider signing up for Coil using my affiliate link.

#cryptocurrency

Non-Fungible Tokens (NFTs) have some exciting applications in the gaming world. The boon to an NFT based item or cosmetic is that it can exist far longer than the lifecycle of a typical game. Even after the servers are dead and the player has moved onto to something new, a rare NFT has the potential to hold its value as a collectible.

A rare sword, land deed, or popular game cosmetic stored as an NFT on the blockchain can even be ported to a new game to be used within new and emerging digital worlds. Furthermore, NFTs can enable the trading of digital goods either in a formal marketplace or a person-to-person transaction. Most game cosmetics in modern games are locked into their respective platforms and marketplaces. It is not easy to extract value out of these storefronts absent dubious third-party sellers.

NFTs have the potential to change this and to give players a degree of ownership over their goods that they currently do not have. However, absent decentralization of game servers (which introduces many other issues; latency and cost being some of the most prominent ones), NFTs are not a magic bullet protecting player ownership rights.

Non-fungible tokens give players a platform-neutral way of trading in-game items and cosmetics, but by themselves, they do not guarantee player property rights in-game. Even though the developer does not have the ability to extract the token from a player’s cryptocurrency wallet, there’s nothing stopping them from banning that specific token from interacting with the game’s servers. For a game cosmetic (in-game items that change a player’s appearance), this is a death sentence.

These factors may be the reason why developers like Gala Games have indicated that they want to head towards eventual decentralization of their game servers. I’m not certain how they deal with latency issues associated with a server architecture like this, but I am curious to see the end result. Mirandus is an MMO, so they wouldn’t need the split-second latency times that players expect from a First-Person Shooter game, but I have a lot of trouble envisioning a stable, playable, decentralized server architecture.

A game cosmetic that cannot be used in-game is valueless. Even if it’s stored as an immutable token on the blockchain, it can still be barred from participating on a centralized game server. An unscrupulous seller can try to offload the token onto an unsuspecting buyer, but that’s about it. Unless there’s some kind of aspect to the collectible that gives it value outside of the game, the token will not hold its price vs a similar item that can still interact with the game world. But why would a developer using a decentralized marketplace and non-fungible tokens do this? Wouldn’t it call into question the whole business model?

There are a number of scenarios where a game developer using NFTs to tokenize items might ban a game account and the associated NFTs from interacting with their servers. The first is cheating, exploiting, and hacking. In the traditional non-blockchain based gaming world, Valve regularly bans accounts for cheating, and when they do, they freeze the collectibles associated with the account so they cannot be traded or re-sold, and while this isn’t possible with non-fungible tokes, a developer can still blacklist NFTs associated with a cheater's account from interacting with their servers.

Unless the game servers are also decentralized, I’m not seeing why the developers can’t do this with NFTs. If they give consumers an easy way to check if the token is still viable in-game, particularly one that integrates directly within any of the marketplaces developers use to sell items, it wouldn’t make other players hesitant to purchase items from these storefronts.

Typically, a player is forced to agree with an end-user license agreement (EULA) prior to playing a game. If that EULA bans activities like cheating, then there’s not much legal recourse for recovering banned items. And if you want to get really paranoid, the burden of proof for cheating almost always favors the developers. If they mistakenly flag you for cheating, no one is going to believe you when you say otherwise. And unless the items are very valuable it won’t be worth it to take them to court to try to reverse the ban.

Besides cheating, there is also the scenario of bad behavior on the part of a deed holder. Behavior issues are something traditional developers struggle with, and they own the games, the servers, the in-game property. Most developers have very stringent codes of conduct placed within the end-user license agreements that give them a great deal of leeway in banning problem players.

Hypothetically, if the owner of one of the Mirandus citadels or towns jumps onto a soapbox in the middle of his town square and starts frothing at the mouth with racism, misogyny, etc, how should the developers handle this? They could ban the player, but he would still own that property.

Since the NFTs are representations of properties it could be argued that the developer is no more responsible for what is said there than what is said in someone’s house. In the United States, the vitriolic speech might be protected under the first amendment. But would a European regulator feel the same way? There are some interesting cross-jurisdictional legal issues here. If you ban the player, who administrates the property? How does the player collect rents? How much of a guarantee is a tokenized property deed if it can be taken away when someone is inconvenient? Do property rights extend to digital land?

It’s clear that the deed’s NFT immutability can remain simply because of the strength of the blockchain. If a game developer starts yanking property deeds (by banning players and minting a new deed that the servers will recognize) from inconvenient players, it will make the rest of the property holders very nervous. But when a developer is staring down the barrel of a regulator’s gun, I’m not sure that they’ll be willing to go to jail, or worse, to maintain their ideals.

The advantages that NFTs offer most gaming models would be that they can be traded and sold anywhere, and they can be programmed to give the developers a cut of any future sale, which can offer some significant incentives to implement such a system. In terms of player property rights, while they are an improvement, they are not a silver bullet. And the more complex a game becomes, the more difficult it is to offer a guarantee about a player’s right to ownership within a digital world.

Header photo by Taylor Wilcox.

If you have any additional thoughts or questions, don't hesitate to reach out on Twitter @MacroPolo707.

If you enjoyed this article and would like to support future content, please consider signing up for Coil using my affiliate link.

#cryptocurrency #NFT

Tons of people on my Twitter feed have been mentioning Gala Games. Some have been running nodes, and others discussing non-fungible tokens (NFTs) and blockchain-based property ownership in Gala's upcoming MMO, Mirandus. I’m most interested in the latter because it’s something I’ve written about before.

Bitcoin and other cryptocurrencies are fungible, essentially meaning one Bitcoin is worth the same as another. A non-fungible token (NFT) is a cryptographic token issued on the blockchain that represents something unique like a photograph or a collectible trading card – a concept that can be extended to any limited run collectible or work of art. An artist can mint a work of art on the blockchain, and they’d truly be one of a kind. It is in this aspect that the blockchain has the most to offer to the gaming ecosystem.

The neat thing about the Mirandus NFT implementation is that the developers are using NFTs as land deeds. Essentially, they are NFTs representing property ownership in their upcoming massively multiplayer game. Two of these deeds, each currently listed on the Mirandus webpage for 2,320 ETH (about $3.5 million dollars) have already been sold – the Citadel of the Sun and the Citadel of the Stars.

These are truly unique NFTs as there are only one of each of the citadels, sun, wind, earth, moon, and stars. Below the citadels in rarity and cost are towns, villages, hamlets, outposts, and homesteads. Owners will be able to rent portions of their properties to players who can then establish storefronts to generate their own income in-game.

I generally consider ownership of a $3.5 million dollar property in a game that hasn’t been released yet to be a risky proposition, but two entities have already taken the plunge (one initially purchasing the property for $800,000), and who knows, it might be very profitable for them in the future assuming they can find someone willing to give them the rather large asking price. If Mirandus takes off, they’ll have a major stake in one of the game’s largest and most prestigious income-generating properties. If Mirandus can establish a large enough player base, these early adopters could possess, in the form of a property deed stored as an NFT on the blockchain, a game property they can develop that generates rental income comparable to or exceeding most real-world homes.

There is also the other possibility, the one none of us like to consider when we’re excited about a new project, but it’s something investors should keep in mind before they shell out that kind of money on digital property. Games are a finicky thing, and MMOs are notoriously hard to develop. The biggest advantage that Mirandus has at the moment is that they are one of the first developers in this space to try this funding method out – and I say it is a funding method because that’s what it is.

Video games, particularly those with a decentralized gaming marketplace, are not cheap or easy to develop. The Mirandus devs seem to be using NFT sales as a Kickstarter of sorts. It’s very possible that the game flops, and the early investors will have shelled out hundreds of thousands of dollars for a useless digital property. I hope the purchasers of some of these NFTs have at least considered that possibility as there are a ton of ridiculous moon-Lambo rocket jockeys in this space that dive headfirst into any decentralized venture expecting constant and limitless returns.

Any game world essentially runs on money. The developers, even of a “decentralized” game, need to make up the cost and accrue profit through mechanisms like subscription sales, cosmetics sales, expansion packs, content packs, and character sales. Some use predatory loot box models, stickers, anything a developer can sell to you, they will. There’s no such thing as free-to-play, even if they call it that. These worlds and marketplaces don’t run on fairy dust and good intentions, and a decentralized gaming marketplace and game world is no different, particularly when the security of the NFTs and the game servers rely on distributed computing schemes. All of this costs money.

But seeing Twitter exchanges like this makes me uneasy:

If the game property you are thinking of buying is worth more than your house, please reconsider. There is no guarantee this game takes off, and if it doesn’t, well, expect tears and some angry tweets at the very least. If you’re one of those peculiar gaming whales that has the means and desire to spend hundreds of thousands of dollars on pay to win cellphone games, then, by all means, have at it, but if you could lose your shirt over this, be careful.

Typical Kickstarter or crowdfunding methods promise users something more whimsical in exchange for backing – usually artbooks, digital items, things of that nature. I’ve never seen one that promises users future income returns from managing in-game properties or running a proof-of-work “grandfather” node. I’m not sure what the securities implications of something like this would be, as it’s way out of my wheelhouse, but hopefully, people have considered this.

With that out of the way, I think land deeds stored as non-fungible tokens in game worlds are amazing, and the thought of owning a business or home in the decentralized equivalent of Orgrimmar or Stormwind is just about the coolest thing in the gaming world that I’ve seen in a long time. A player-owned and run MMO with real ownership of property and with a functional economy is the kind of game I have always wanted to play and explore. Some of the best games ever made have come from developers that have cut the tethers of player creativity loose and allowed their customers to build upon the engines that they’ve created. Games like Counter-Strike, Defense of the Ancients, and Team Fortress wouldn’t exist absent the modding projects, nor would the spinoff games like League of Legends, Auto-Chess, and Team Fight Tactics. When developers let players run free in a world, amazing things can happen.

If you have any additional thoughts or questions, don't hesitate to reach out on Twitter @MacroPolo707.

If you enjoyed this article and would like to support future content, please consider signing up for Coil using my affiliate link.

#cryptocurrency #NFT

I had a lover long ago,

who I thought would never go.

But through the years she became

distant.

Two words became one

And one became none

And now all that’s left is silence.

My friend would come and go

But eventually he’d always show.

Then life took a turn

And he never returned.

From him all that’s left is silence.

My grandma she loved me so

But finally she had to let go.

Even though her memory lives on,

Through the years as they’ve gone,

All that remains is silence.

My father he watched me grow.

Together we’d march through the snow.

One day he felt bad

And the last moment we had

He told us, “Don’t worry. I’ll see you soon.”

Now all that’s left is silence.

Terrible, terrible, silence.

#poetry

Hitman 3 is a game where players assume the role of Agent 47, one of the world’s deadliest and also baldest assassins. Whether from alopecia or diligent grooming, 47 is completely hairless, making the signature barcode tattoo he has on the back of his head the only means with which anyone can identify this brutal and efficient cueball killing machine. Agent 47 may have also been grown in a lab, hence the barcode tattoo, but I haven’t played any of the other Hitman games, so I cannot say that with any authority. It’s something that I choose to believe – that they engineered this man to be bald and hairless so his hairs wouldn’t catch on any of the vents he was forced to slither through on his assassination missions. I suppose he could have also singed all of his hair off manufacturing explosives, as I’ve done something similar once lighting the barbecue, so I suppose someone that regularly makes bombs could have had an accident like that, where his eyebrows, hair, even the pubic kind, were singed off when he crossed a red wire with a blue wire or something of that nature, leaving him shiny and seal-like, but not quite as blubbery.

47 isn’t the run-in guns blazing kind of assassin. He’s more similar to Sam Fisher or Solid Snake (absent the fabulous hair). Infiltration and assassination are his modus operandi. The game takes 47 to locations like a Dubai Skyscraper, an English mansion belonging to a prominent family, and the neon-lit cityscape of Chongqing China, where a shadowy organization hides unethical experimentation beneath innocent looking front operations. Each mission has a target, and 47 never misses his mark.

Completed missions give players additional tactical options like additional weapons and tools which are smuggled into certain areas of a building as well as new mission starting points to make chasing additional objectives easier. At the mission summary, players are presented with an overall score and agent ranking tied directly to mission performance. As Hitman 3 is an infiltration and elimination game, run-and-gun style gameplay is not as highly rewarded as mission objectives completed while the enemies never knew Agent 47 was there. Players are punished score-wise for killing innocents, so there’s less of an incentive for Hitman 3 to become a mass shooting simulator.

The weakest element of Hitman 3 is the storyline. There’s a moment in the narrative where 47 is faced with the dilemma of engaging a squad of soldiers to save a friend – something he’s clearly capable of doing successfully, as we’ve already seen him infiltrate and dispatch some of the wealthiest and most heavily armed targets on the planet. But his friends balk at the prospect of him being able to win the fight. This selective vulnerability is common with characters like these.

Agent 47 is one of those Clark Kentian protagonists, so powerful, perfect, and dangerous that it’s hard to match him against any antagonist, so writers rely on these moments of selective vulnerability to create tension in the story. The narrative event is jarring and illogical, but Hitman hasn’t ever been a notable story-driven game. Balancing a perfect assassin, incapable of any error against an enemy is difficult, requiring someone of at least comparable skill. Since there’s no one to fill those shoes, the narrative relies on a kryptonite like vulnerability for the venerable assassin. The biggest criticism of this is that it removes a player’s agency to impact the story. The events that unfold aren’t completely tied to player effort or skill but the outcome of an external event.

I haven’t seen such a striking imbalance between the quality of gameplay and the quality of a narrative in a game for a long time. The gameplay in Hitman 3 is stellar; the visual representation is spot on, and the missions are well thought out. Non-playable characters have conversations that make them come alive. There’s a tremendous amount of detail built into the world that lets players solve missions in a multitude of ways. For example, if Agent 47 happens to overhear a conversation between guards at a certain moment in the gameplay, they’ll provide clues like a door code, which opens up another avenue of attack for the mission. Or players can spike a target's drink to force them from a public place to an isolated area:

Hitman 3 is also one of the best-looking games of the past two years. But the narrative is fragmented, poorly thought out, and poorly executed. The odd thing is, it doesn’t matter. The game still sucked me in, and I played through the whole story in a single day. Each time a mission is completed, it opens up new substories within that mission; new ways of completing an assassination using new tools, new entry points, and different goals from the last playthrough. For example, during a mansion infiltration mission, Agent 47 can take the place of a private detective hired to solve a murder that has just occurred there. Or he can incapacitate and assume the identity of a photographer hired to memorialize a prominent family. Each new completion unlocks additional tools and storylines.

The biggest downside to the game is the amount of content for the price. For a full-price game, Hitman 3 is very short. Unless you’re the type to re-play missions chasing a higher score or a slightly different mission storyline, the price might be too high at release. Nevertheless, Hitman 3 is an amazing game that I highly recommend both for fans of the franchise and newcomers to stealth games in general.

#gaming

There’s a wonderful feature of cover art in a recent Coindesk article from a work of political philosophy by Thomas Hobbes, where the body of a king is composed of a mass of teeming bodies that gaze upwards at the face of their ruler. In his left hand is a sword and in his right a scepter, representing the dual purpose of governance and coercion that sovereigns find themselves wielding once they take the seat of power. It’s a visual representation of a government being the physical manifestation of the collective will of the people. Even when power is concentrated in the hands of a single individual, a government can only exist at the behest of the people who reside there. When a sovereign falls too far out of sync with the public will, the guillotines come out, the gallows form, and heads roll. The book is called Leviathan.

The news has been rife lately with stories about American lawmakers struggling with cryptocurrency regulations and decisions about whether the fed should issue an American central bank backed digital currency. These events coincide with a report released by the American Department of Justice detailing the kinds of issues law enforcement faces when pursuing criminals and nation-state backed attackers actively using the blockchain to launder money.

For XRP followers, the most important question tucked in the myriad of legislative issues has been regulatory clarity. The lack of papal blessing by regulatory bodies in the United States for the fourth-largest cryptocurrency by market cap has been a matter of friction for Ripple and members of the XRP community who feel that regulators are unfairly dragging their heels on the issue of whether XRP is a security. The lack of such a declaration hinders adoption and, as proponents of the XRP ledger argue, creates an unlevel playing field.

Paradoxically, two of the digital-assets that regulators have cleared, Bitcoin and Ethereum, are the most represented in the kinds of criminal activity and cross-border money laundering issues complained about in the recently released Attorney General’s Cryptocurrency Enforcement Framework. It’s not simply drug-traffickers and criminals who are using these digital-assets to launder money. BTC and ETH, as the Attorney General’s report outlines, are increasingly being used to bypass American sanctions by countries like North Korea, often using Chinese intermediaries to transfer these cryptocurrencies into fiat.

To drive the point home, the only two cryptocurrencies that have been granted regulatory blessing in the United States are the very same digital assets that are currently being used as tools to bypass American power on the world stage. At the same time, Ripple, an American company that created an independent and open-sourced digital-asset, is being denied regulatory clarity by some of the very lawmakers described in the Attorney General’s report as wrestling with blockchain-based criminal activity and the sanction busting behavior of rogue nation-states.

If we return to the leviathan metaphor, it seems like the sword and scepter of the American state (coercive and legislative) are dramatically out of sync. The leviathan flounders. It is unsure what to make of this new technology, unsure of how to police it, unable to fully track it, and unable to completely kill it.

Brad Garlinghouse illustrated the paradoxical and often contradictory rules and attitudes held by lawmakers in a recent tweet:

In an open letter discussing FinCEN's proposed amendment to the Bank Secrecy Act, the popular YouTube crypto commentator To The Lifeboats had this to say about the conflicting nature of attitudes on cryptocurrency enforcement:

That’s the problem here in a nutshell. FinCEN is now calling it legal tender. How does the SEC classify Cryptocurrency? In today’s environment, the agency that’s correct, is the one taking enforcement against you. That’s how US regulators have strangled the financial sector at a critical time in history.”

Lawmakers aren’t the only ones who disagree about how to treat the blockchain. In a recent panel held by the International Monetary Fund titled, Cross-Border Payments—A New Beginning, the panelists held different views on what the technology was, what it could be, and what it should be. Some felt that digital assets and decentralized ledgers would be the financial infrastructure akin to the internet, facilitating cross-border currency transfers through their underlying protocols. Others felt that this kind of transformative movement of value could only come at the behest of central banks using a layer of infrastructure that enabled seamless swaps between CBDCs without a corporate intermediary.

Some in the Cryptocurrency space view the technology as a liberator that severs financial shackles placed on the public by predatory nation-states and governments who view citizens as sheep to be periodically shorn of their wool when their respective regimes need to generate capital. Cryptocurrencies are also viewed as wealth preservers against the unmitigated printing of money. Then there are those who view the blockchain as the means to deliver fair and transparent elections, where citizens can verify that their vote has been correctly counted, and which allows them to vote from the convenience of any electronic device they may own.

The matter is made even more complicated by private sector backed digital currencies like Facebook’s Libra, which regulators were briefly concerned could supplant national currency. Corporate minted money harkens back to an age where coal miners were paid in company scrip that could only be used in company stores. And concerns abound that a private entity with no responsibility to anyone other than their shareholders could surreptitiously change the rules, locking the public into a series of predatory currency constraints. If we flip the issue on its head, a government-controlled digital asset could be used to track financial transactions with a granularity that has never been seen before. They could also block and roll back payments and freeze the funds of citizens who fall out of favor with an authoritarian regime.

For some of the above reasons, Jerome Powell, chair of the Federal Reserve argued that it was more important to get things right than to be first:

“Use of and trust in the dollar comes from the reliable rule of law, strong and transparent institutions, deep financial markets, and open capital accounts. A healthy and efficient payment system demands these features which reach far beyond the merely technological. We do think it’s more important to get it right than to be the first. Getting it right means we not only look at the potential benefits of a CBDC but also the potential risks and the important trade-offs that have to be thought through carefully. We have a responsibility both to the US and to the world that any steps taken for a US digital currency be taken safely. We’re absolutely committed to the soundness of the dollar and to a safe and efficient US dollar payment system. In addition to assessing the benefits, there are also some quite difficult policy and operational questions that need to be thoroughly evaluated. Just to mention a few, I would mention the need to protect a CBDC from cyber-attacks, counterfeiting, and fraud. The question of how a CBDC would affect monetary policy and financial stability, and how could a CBDC affect illicit activity while also preserving user privacy and security – assuming that those things can be resolved, yes there are potential benefits, but that’s going to take a lot of work and thought. They’re not simple questions, and the answers are going to need to be comprehensively understood.”

Treating open, permissionless ledgers like XRP in the same manner as Facebook’s Libra is not quite fair. I would hope that regulators were capable of cutting through the often repeated FUD that the XRPL is a centralized ledger, but as journalists regularly fall for and repeat these lies, it wouldn’t surprise me if some of the regulators also held this erroneous belief. The danger for cryptocurrency investors is that the governments and their central banks opt for a cooperative mechanism that swaps CBDCs directly without the need for an intermediary asset like XRP or Stellar. This seems to be what Jonathan Dharmapalan from eCurrency was suggesting during the IMF’s Cross-Border Payments—A New Beginning panel.

“Ultimately, for that cross-border space to be a safe space, Central banks have to participate. We can argue as to how they participate, but there has to be some common medium across which this takes place, and the common medium is not a private sector company – Facebook, showing up and saying we will be the common medium. The common medium has to be a common medium that hasn’t been hijacked by the private sector. And that’s really what we are talking about, and how can central banks allow that common medium to exist, but still allow private sector participants to operate across that common medium. The internet is a tricky subject because people throw the internet out as the way the future of CBDCs should work. But actually, even on the internet there are some common mediums that are centrally accepted, and the private companies don’t get to run off with it.”

“The conversation recognizes that central banks and central bank digital currencies are soon going to become a reality, and when that happens, how does cross-border work? And I believe that the participation of central banks will actually eliminate the exposure and the risks associated with cross border. And in the digital world could actually iron out some of the challenges we have with cross border payments.”

Denelle Dixon from Stellar responded to these statements with this:

“You’re comparing this to Libra, which is a very different thing than what we’re trying to focus on. Permissionless networks are the infrastructure layer that allows entities to build on top of them and innovate and to create awesome ideas and to create products that will solve these problems that folks have all over the world. They’re gonna solve financial inclusion because you can do it on your phone, you can make it so people don’t have to have bank accounts. The comparison with the internet is that infrastructure layer, that technology layer. The notion that AML and all of the different regulations need to apply here is absolutely agreed upon. And those financial institutions that touch fiat on the edges are regulated by all of the different geographies. We cannot forget that that is the important piece of this, that is what creates the interoperability that is what makes it so that this all works seamlessly.”

And Rory MacFarquhar of Mastercard argued that the lack of trust between central-banks and nation-states was not likely to evaporate in the foreseeable future:

“Building cross border structures among governments requires a lot of trust among those governments. And we’re not necessarily at a moment in geopolitical history where there’s universal trust.”

While Bitcoin, Stellar, Etherum, and XRP are not fundamentally controlled by a private company like Libra is, there are still problems with aspects of these technologies, like mining being controlled by Chinese mining pools or organizations and individuals who are responsible for the majority of the development work on a decentralized network being located within range of the coercive mechanisms of the United States. To call these technologies completely independent is somewhat misleading. And labeling them as infrastructure akin to the internet is premature.

As Denelle Dixon indicated, we may well see CBDCs issued on open, permissionless networks like Stellar, XRPL, or Ethereum, but it seems equally likely that central banks would go a different route should they decide to tokenize their currencies. Giving control of a CBDC to the governance protocols of a decentralized network, with all of the things that we’ve already seen go wrong with governance on these chains, makes it unlikely that a nation-state would ever place its currency onto the back of such a historically unstable structure that it has no direct control over. Independent cryptocurrencies as an intermediary asset, swapped between CBDCs seem like the most likely scenario, but it is by no means guaranteed.

Some of the regulatory floundering can also be explained by the fact that blockchains are extranational entities, with their own governance models and traditions that operate outside of, but intersect with, the physical space. They hop jurisdictions and cross borders seamlessly, piggybacking off of the internet’s infrastructure. They resemble mesh networks of the kind found in authoritarian states where citizens set up a decentralized local network by peering wireless routers together, which allows them to bypass the government’s physical control over their local internet infrastructure. While these technologies can be shut down temporarily, it is almost impossible to destroy them entirely. If we look at dark web marketplaces, for each one shut down, another springs up to take its place. It’s very difficult, even for nation-states as powerful as the United States, to suppress a technology once it’s escaped amongst the general public.

Then there is the question of whether a neutral settlement asset or the existence of several viable alternatives could dilute the dollar’s international power projection capabilities. David Schwartz mentioned this possibility in a string of recent Twitter threads:

Schwartz also posted notes for an upcoming Berkeley speech on CBDCs, the unlikely possibility of a one-world currency, and the need for interoperability for international payment infrastructure. He had this to say about CBDCs and reserve currencies:

“I don’t think the USD being fully replaced as the world’s reserve currency is likely in the near term, or even over the next few decades. But its position is becoming more precarious because of several reasons: pandemic uncertainty forcing consumers and institutions to look at other safe haven asset classes (like crypto) and the rise of other countries (particularly China) that are trying to dethrone USD. Being tied to USD also brings jurisdictional ties as well that are, let’s be realistic, increasingly unwanted in many parts of the world. Today, many sovereign countries around the world want independence from a system that gives jurisdictions like the US and the EU extraterritorial control over systems in those sovereign countries and their regions. Saudi Arabia, for example, wants a payment system in the middle east that respects their sovereignty.

If each country issues their own CBDC or starts using stablecoins denominated in different regional currencies, we risk repeating this mistake yet again. We drastically need interoperability between these virtual currencies and between virtual currencies and traditional assets and systems. A CBDC by definition will carry the same capital controls, trade agreements, politics, etc., just as its corresponding fiat currency did. Again, countries are not going to want to deal with another country’s capital controls.”

I wonder if some of the regulatory hesitancy in the United States has to do with the potential of the blockchain to supplant or even simply dilute the dollar’s role as the global reserve currency. Schwartz indicated that this wasn’t likely for a few decades, but he seems to think that the potential is there for digital assets to do this. In a recent Coindesk article, Steven McKie stated that digital currencies, while they may seem to be drains on state power, might instead be a boon to diplomacy and international business:

“In essence, though these systems may at first seem adversarial to state power by their very design, if you look more closely, you’ll see they inherently (slowly) improve diplomacy via scalable trustless cooperation and international business over time.”

That statement on scalable trustless cooperation being desirable seems reasonable for powers that are not in possession of the global reserve currency. Cryptocurrency models like Stellar, XRP, or any of the other numerous efficient digital assets that could be used as an intermediary asset or even a currency itself, are probably appealing to nation-states that are forced to operate within the currency power projection capabilities the United States, as these models would be freeing to them. But the Americans are probably hesitant to run towards decentralized currency models with open arms as they have the potential to dilute their power. Getting regulations “right” in this case could mean trying to find a way to digitize currency and facilitate blockchain commerce activities in a way that preserves American power. If this is the case, companies like Ripple need to do their best to convince American power structures that their independent ledgers are a boon to American geopolitical goals. If they cannot do that, it’s likely that they could find themselves stuck in regulatory limbo for as long as it takes for the mechanisms of the American state to figure out what to do with the technological hydra that is the blockchain. These factors may be the reason that Ripple has been recently toying with moving to greener pastures.

McKie also suggested that Bitcoin likely wouldn’t represent a threat to state power as it behaves more like gold than like a state-backed currency.

“Bitcoin, in this respect, is very much like gold. And like gold, it poses no active threat to state currencies or state power. For the value of state currencies – as described above – is predicated upon the actual, practical power of states. Throughout modern history, the preeminent reserve currency has been the coin of the world’s preeminent military power. Only if states lose their status as the main global powers are their currencies likely to follow suit.”

This somewhat explains the greenlight given to Bitcoin and Ethereum, but Bitcoin being digital gold is somewhat of a stretch. And considering that we have American law enforcement agencies clearly signaling that Bitcoin and Ethereum are widely used to bypass American Sanctions by adversary nation-states as well as criminal organizations, the gold reasoning, even if true, doesn’t quite alleviate the contradictory nature of current regulations in the United States. If BTC and ETH are already being used to circumvent American currency controls, and they have been used in this manner even before they were given the regulatory go-ahead, why now disallow a multitude of other viable digital assets for fear of something similar occurring?

Further confounding the issue is a statement by the Trump administration found on Breitbart blasting the SEC chairman, Jay Clayton, for dragging his feet on digital currency regulations.

“The president has rightly identified China as our geopolitical foe and has smartly maneuvered to thwart their aggression through his trade negotiations, his rebuilding of the military, and his overall economic plan,” a senior administration official said.

So when you look toward the future, digital currency is going to be a major front in the broader economic battle. We need to make sure the SEC is not putting American companies at a disadvantage because China is making a major play in the crypto-space.”

These comments echo similar statements released earlier by the Trump administration:

While these comments are positive indicators towards greater regulatory clarity, the Trump administration facing the possibility of defeat in the upcoming presidential elections resurrects the issue as there’s no indication that Biden feels the same way about the SEC’s regulatory foot-dragging. The cause of the floundering seems to be a fusion of incumbents protecting their own economic interests, geopolitical concerns, and good old-fashioned incompetence. Whether these regulatory issues drag on or are fixed by upcoming bill propositions like the Digital Commodity Exchange Act of 2020 or a decree by a re-elected Trump administration is impossible to predict.

If you have any additional thoughts or questions, don’t hesitate to reach out on Twitter @MacroPolo707.

#cryptocurrency

Seated on a tenuous perch atop the Flare network’s governance process is the Flare Foundation. The foundation is a non-profit organization responsible for the development and improvement of the network. It is constrained by five guiding principles:

1. No voting

2. No collateral

3. No oracle participation

4. The right to dissolve

5. Reporting

The first two principles seem simple, but they are important in maintaining the network’s decentralized structure. The initial distribution of Spark grants the Flare Foundation a large stipend of tokens. Spark tokens are used as collateral for the network and are also used to vote on network governance issues. If the Flare Foundation were able to vote with these, it would give them an inordinate amount of power in the network’s democratic process, which would essentially make the network centralized. As they cannot vote, and they cannot hold collateral, they are not able to exert direct control on the network’s democratic governance process through these mechanisms, and they would not be able to influence the price and reward ratios by leveraging the large amount of Spark tokens they were gifted for the development of the network. If the Flare foundation were permitted to use their Spark as collateral, they could satisfy collateralization needs almost entirely themselves, particularly during the early development of the network, which would scare other independent participants away. And if interested parties wanted to make income through staking rewards, it would be difficult to do so because of the large amount of Foundation tokens potentially being used to stake.

Ripple is also not being credited Spark tokens for their large XRP holdings. Doing so would give Ripple a tremendous influence over the governance process of the Flare Network. Cryptocurrency Exchange XRP holdings are also being accounted for to prevent organizations from keeping tokens themselves and skewing the democratic process with their XRP holdings. If each Spark token counts as one vote, handing these tokens without restriction to exchanges that hold large XRP reserves would be handing these organizations a massive amount of voting power for the Flare Network.

“Because many XRP tokens are held on exchanges, the XRP Ledger snapshot will be taken at a point in the future when a sufficient number of exchanges have articulated to their clients whether they will claim the Spark token on their behalf. An announcement will be made on https://flare.xyz when the snapshot has taken place. The delay to taking the snapshot gives those XRP owners whose tokens are held in an exchange account but who wish to participate in the Spark distribution the means to do so should their exchange not provide such an option. Known exchange accounts who opt not to pass the Spark token on to their clients but still retain an XRP balance at the time of the snapshot will be removed from the token distribution. Any tokens that would have been claimable by those accounts will be reallocated pro-rata to valid claim holders.”

What’s not clear to me in this process is how the Flare Network is avoiding a scenario similar to the attempted Steem hijack, wherein exchanges colluded and staked tokens to cast votes on the Steem blockhain without user permission. The Flare Foundation has indicated that they are accounting for exchange crypto assets to exclude organizations that aren’t giving their users the option to claim Spark in the distribution process, so they clearly have some account of XRP wallet addresses controlled by these exchanges, and should be able to prevent Spark associated with these accounts from voting.

After the initial distribution of Spark, if these exchanges begin opening custodial crypto wallets for holding Spark tokens, I don’t see why they wouldn’t be able to move the tokens to a new unknown exchange wallet, or even several new wallets prior to the announcement of a new voting proposition and cast votes from these accounts once the voting opened on the network. Tracking these movements before each vote is possible but seems cumbersome and distinguishing an independent transaction by a large stakeholder wallet from one created by the exchanges themselves to mimic one seems difficult.

This is where having a foundation at the head of the development and implementation of network features could come into play. The legality of casting a vote without permission is dubious. Casting a vote on behalf of a user who is holding cryptocurrency on an exchange is like writing a letter on behalf of a user to a public official or signing their name on a petition without prior authorization. As any proposed governance change would need to be developed and vetted by the Flare foundation, the foundation could ignore the results of that particular vote by virtue of the fact that the exchanges were not granted permission to vote on a user’s behalf. The Flare Network whitepaper indicates that the Flare Foundation can reject any confirmed proposals that would fundamentally break the security and decentralization of the network, and the foundation could treat an amendment passed by stolen votes as such an issue.

A foundation report is an analysis on a proposal compiled by the Flare foundation, complete with findings and a recommendation. Foundation may reject the proposal and end the process for the following reasons: legality, the proposal if successful would exceed foundation resource management constraints, technical in-feasibility, network safety parameters.”

Of course, this is a two-sided issue, where the foundation, operating in bad faith, could reject a legitimate amendment. In that case, the community can vote to dissolve the foundation.

The Flare Network also depends on information external to the blockchain to maintain decentralization. The data is gathered from external sources by the Flare Time Series Oracle, which the Flare Network whitepaper describes as “a decentralized application that aims to generate accurate estimates of off-chain time series data on the Flare Network.”

Time series data is a confusing descriptor for someone who is non-technical, but the Flare Network’s blog indicates that these will be data sets that initially include “…prices for: XRP/Spark, USD/Spark, BTC/Spark, and XLM/Spark.”

Time-series data refers to things like price indices tied to a specific period of time since both the price data and the time of the gathering is important to maintain things like collateralization of the network. If the price of XRP spikes suddenly, the Flare network needs to have accurate “time series data” to ensure that there is a sufficient amount of Spark in the network staked as collateral so that there’s no incentive to take XRP placed in the network and run away with it if there’s a large discrepancy between the price of XRP and the amount/value of Spark collateral in the network.

The price reporting is done by stakeholders, so as to not introduce centralization issues that could be tied to price reporting. Trusting a single party or group with control over the oracle services would give them leverage over the system itself. They could hold the network hostage by threatening to throw the collateralization calculation out of whack with false price indicators if the network refused to implement a policy that benefitted their specific group. Control over the reporting of external XRP data could also give a group of attackers incentive to mess with the collateralization ratios to try to make a profit.

The Flare Network records time-series reporting from two different types of stakeholders. The first is from Spark holders, who are given a financial reward for accurate data reporting. The second comes from the dependent application holders like holders of FXRP who, according to the foundation’s blog, are incentivized to participate because accurate data is tied to the security of their applications.

The FTSO balances competing economic interests against each other to ensure accurate reporting data:

“In this case, the F-asset is FXRP, and the time series oracle provides the on-chain XRP/Spark price, based on the estimates being submitted by both holders of Spark and FXRP. By virtue of holding either FXRP or Spark, both these groups have an implicit stake in the system i.e. an incentive to act honestly, as accurate pricing maintains the systems integrity and utility.”

The counterbalancing of interests is similar in practice to the left/right dichotomy present with American political parties. The underlying principle is that this counterbalancing of powers acts a break on the kinds of wide-sweeping societal changes that often end up causing a great deal of harm. A real-world example of this kind of harm is the Dekulakization that took place in the Soviet Union, where the Soviets liquidated the prosperous peasant cast and engineered a famine that killed 3.9 million people in Ukraine.

The stakes for the Flare network are not quite as high, but the above example should be an indication of why weighing competing political and economic interests as a governance tool are important as a function for any decentralized technology or political/democratic system. For the Flare Network, the financial incentives provided to Spark holders motivate them to report accurate data. For F-Asset holders, if they allowed Spark holders to report inaccurate data, they stand to lose money once the security of their application is broken. In essence, non-participation in the oracle services could wind up costing them a great deal of money even though they’re not granted a direct financial benefit from participating in the vote.

The associated documentation for the Flare Network indicates that voting, both with governance issues, and oracle issues, follows a form of delegative democracy called liquid democracy wherein voters have the choice to either cast a vote themselves or to assign their votes to a trusted delegate. The Flare Network whitepaper indicates that one of these delegates will be the Flare Foundation.

Speculating on the nature of the political landscape of the Flare Network is very difficult as it’s incredibly early in the development of the network, and we can’t be certain that the idea will even find widespread adoption. Nevertheless, I find it likely that during the initial stages of the development of the network, the Flare Foundation voting bloc, which we can look at as being a structure akin to a political party, will have a majority of the network’s voting power. This isn’t necessarily a bad thing. Vitalik Buterin argued in an unrelated comment that the ideal initial setup for decentralized networks is dictatorship – far away from how the Flare Foundation is formally structured, as stakeholders are permitted to vote on governance issues independently of the foundation.

These kinds of initial top-heavy approaches are not unprecedented or even undesirable within the early lifecycles of decentralized systems.

As the network develops, it’s likely that incumbents with divergent interests and goals from the foundation will develop and form voting blocs or alternative political parties. That is not to say that these groups will be interested in harming the network, but they generally will be as self-interested as any of the comparable political parties (Republicans or Democrats) can be while still wishing to maintain the health of the overall system. As they’re all participating in the network economically, they have a vested interest in maintaining these functions of commerce.

Another possibility, which I find more likely if the network fails to find widespread adoption, is that the Flare Foundation’s voting bloc retains a majority of the voting power for the network, making it the network’s single viable voting bloc.

One interesting feature with voting delegates is that they can be either a single person or group of people. At face value, it seems dubious to trust a large amount of voting power to a single person as a delegate, but I suppose if they are also a large stakeholder and trusted member of the community, they would have an interest in maintaining the value proposition in their stake. Spark holders also have the option transfer a portion of their votes to a delegate:

Delegation allows an address to bestow all or a fraction of the votes associated with its Spark tokens upon another address for the purposes of both FTSO and governance participation without moving or transferring those tokens.”

I'm not certain how far this delegate granularity extends. Given the option, I would consider using a trusted delegate for Time Series Oracle participation, but I would rather directly vote on more foundational proposals.

Another issue brought up in the whitepaper, and one that I find difficult to wrap my head around is the participation of staked Spark tokens in accumulating FTSO rewards. The whitepaper outlines that spark holders using their Spark as collateral to generate FXRP will still be able to participate in votes for the Flare Time Series Oracle by delegating their votes to another address:

“If there were no way for the address to use the Spark claim amount to contribute to the FTSO (and potentially earn the FTSO reward), then the addresses owner faces an undesirable opportunity cost in deploying that Spark as collateral in the application. A system of delegation is thus introduced to resolve this. Delegation allows an address to bestow all or a fraction of the votes associated with its Spark tokens upon another address for the purposes of both FTSO and governance participation without moving or transferring those tokens. Each Spark token holds one vote that can be contributed to the FTSO and a separate vote that can be contributed to governance. These votes may be delegated to different parties. The opportunity cost described above is then solved when any application that creates a Spark claim automates delegation of the claim amount to an address specified by the collateral provider.”

Does this mean that staked Spark tokens can’t participate in the FTSO without delegating to another address? That’s what it sounds like in the quote above. Keep in mind I’ve never participated in a DeFi blockchain voting process, so it’s difficult to picture what this might look like in-practice from just reading a white paper.

A recent reply to this question by @FlareNetworks:

Voting

Spark tokens are the primary mechanism by which users vote, with one token corresponding to one vote. The whitepaper indicates that propositions can fall under three different voting difficulty categories. These are: Simple Majority, Super Majority, and Super Super Majority. Each of these categories has a minimum voter turnout rate as well as a specific goalpost number that is required for a proposition to pass:

For the most difficult category of propositions (Super Super Majority), the required voter turnout rate is 70% of total spark tokens. For the proposition to pass it also must capture a threshold of at least 80% of votes in favor of the amendment. The Super Majority category would be the most familiar to citizens of the United States as Super Majorities are required to pass constitutional amendments.

Most of us are accustomed to citizens in a democracy being granted a single vote. Having more voting power simply by virtue of an individual having more of an intangible asset seems contrary to the democratic spirit. Nevertheless, it’s important to keep in mind these are very different structures. It’s far easier to verify identity in the real world than it is on a pseudonymous blockchain. And a DeFi platform won’t be required to embed itself in the physical world to the extent that a formal government would (providing welfare, collecting tax, buildings roads, funding healthcare, the military, policing, holding territory, maintaining borders, defending sovereignty, etc.).

In most western democracies, we are accustomed to casting votes for representatives. We’re often not required to vote directly on an issue. Direct-democracy of that nature is comparatively rare in large nations – not unheard of, as elected officials sometimes put issues to a popular vote. It is far more common for most decisions to be made by our representatives found in whatever major political party manages to capture the seat of power, either by winning a majority or forming a coalition.

The liquid democracy model isn’t strictly a direct democracy model, but it allows individuals to vote for each separate issue if they wish. The voting process found in the Flare Network seems designed to enable voting for participants in a pseudonymous network, where it’s difficult to have identity verification of the kind found in a formal nation-state. Nevertheless, I could envision the process of voting through single delegates or a group of delegates leading to the same kinds of factionalism and party politics that we find in traditional democracies. And the delineation between something that exists online and something that interacts with the physical worlds is increasingly becoming blurred. The question then becomes, how does the foundation counteract the notions and issues of plutocracy that spring up whenever we have a voting scheme that is ostensibly tied to associated wealth in a network? Their answer to this issue is to have stringent requirements to pass propositions, depending on the impact these propositions could have on the network, and by balancing major stakeholder’s economic interests against the value of an asset that they hold a large amount of.

Major stakeholders, or the voting blocs mentioned above, even though they may have a large amount of voting power, may have difficulty reaching the requisite voting thresholds to pass the kinds of propositions that fall under super and super super majority categories. Even though a stakeholder might be wealthy in terms of spark assets, their influence on amendment propositions is limited by the stringent requirement of both voter turnout and the large percentage required to pass the amendment.

Some may question the difference between the foundation operating one of the network’s most powerful voting delegates versus them being allowed to vote with their Spark reserves. As I indicated above, it’s likely that the foundation’s voting bloc will be trusted by a large portion of the community during the Flare Network’s early lifecycle, which would give them a majority of the vote. I suspect that average users won’t have the wherewithal or the motivation to vote directly on every single proposition that is put forward onto the Flare Network, so trusting the foundation as a voting delegate would be a convenient decision. The difference between the two approaches of allowing the foundation to vote with their Spark as opposed to operating a powerful voting delegate is that the former is permanent power as long as they keep a large enough portion of their Spark reserves, whereas the latter is temporary power, likely to dilute over time as new personalities and groups emerge that the community trusts enough to act as their delegate, or if the Foundation operates in a manner that members of the community oppose. Allowing the foundation to vote with their Spark holdings is permanent tyranny, whereas operating a major voting delegate is temporary stewardship.

If you have any additional thoughts or questions, don’t hesitate to reach out on Twitter @MacroPolo707.

#cryptocurrency

Enter your email to subscribe to updates.