Decentralization, Democracy and Trust

    A lot of confusion exists concerning those words like trustless and decentralization in the crypto circle. “Trust-less” is misleading, what is really meant is that blockchain is so trustworthy that you do not need to think it anymore, it is highly trustworthy. This trust in almost absolute meaning originates from high-level decentralization or democracy. All these innovations are of some traditional thoughts about our belief or trust in democracy, this belief has existed for hundreds or even thousands of years in the practice and theory of the constitution of social and political community, only that here this trust created by democracy is not so absolute. The whole thing is still about trust, from democracy or anything else.

    Blockchain itself is decentralized, but this does not mean that things on it are necessarily decentralized semantically. Native cryptocurrency is decentralized because it is a closed system in which people linked only by blockchain. he has only two entities to trust: the blockchain and himself.

    But this is not the case when other roles or actors or intermediaries enter into the scenario. E-commerce platform engaged in selling fake goods do not worth more trust just because they onboard some commodity traceability system, though there is people taking it not as a joke, which is sad.

Democracy in Sto claim

    What is in my mind is that for STO, a lot of things, intermediaries take part in the business, the above perspective is valuable in inspecting this matter. Among all those intermediaries, one of them should be paid most attention: Claim issuance.

1. Repeat it: The whole thing is still about trust, from democracy or anything else

2. The formal structure of the claim issuing system is highly centralized: it is hierarchical.

3. Trust do can come from a highly professional tradition.

4. Some democratic element still is possible

    Claim issuer itself needs a claim, necessarily backtracking to a root, this structure will map into the structure of any technological on-chain claims registry, no matter how you make effort to design it. This is a partial reflection of the real world. I said partial because:

1. From the perspective of facts, in some jurisdiction this is completely true, the root, a dictator, presiding over this pyramid. But in another jurisdiction, there might be some representative political mechanism in it to make the regulatory system democratic.

2. From the perspective of feasibility, For the latter one, we do have the opportunity to not only reflect this democratic element, but also push it forward by our claim system. Our system is also not doomed to be so centralized. We still have hope for certain extent of decentralization or semi-decentralization.

    That’s the rationality concerning decentralization of claim systems in Sto. We cannot change evil ones just by our technology. But we can make good ones better.

    But still there’s no absolute necessity for this democratic element. Need not push too hard in this effort. The core question is still about trust. In modern western civilization with long tradition of rule-of-law and highly developed social organization and high expertise of the lawyer’s profession, arbitrary power tamed, trust is naturally put into some licenses and just on-chain them. This will work for Sto without waiting for some ideal democracy. We are not making Utopia. Decentralization technology can do nothing for North Korea and its great neighbor or any fake good platform， and also need not stick hard to the decentralization ideal.

    What does it mean for design?

    Let’s talk about the design of claim system. First, I give a simple description of our current Claim Mesh system, then some thoughts considering its design and evolution.

Our claim system: Claim Provider Mesh

    Claim mesh is a network with a structure quite like the 0x-mesh based on order-book sharing, consists mainly of two roles: Claim Order Relayer and Claim Provider

1. Identity Wallet: investor prepare identity information, custody it in Information Service and send claim request.

2. Information Service: Custodian for Identity off-chain information

3. Claim Relayer：receive claim request from Identity Wallet and put it into the order-book managed by it, deliver it to claim providers to work on it. Further order-book sharing between relayers also is valuable. Claim relayer has restful api for Claim Provider Workshop.

4. Claim Provider Workshop: Issuer of the requested claim, licensed institution, law firm, are called claim provider, they have Claim Provider Workshop to browse, choose and receive claim order, using KYC service that is integrated into the relayer restful api service to do all validation work, issuing claim and put this claim into on-chain Claim Registry

Some (bold) assumption about democracy

    This connected claim provider network or mesh is the current working system in Magic Circle Sto. From technological view, it has the capability of easily evolving into some democracy:

1. Democracy in execution level: the decision to issue claim is not arbitrary made by a single lawyer, lawyers vote on the claim order, decision is the result of this voting. Policy of voting depends on situation and is configured by system, or even by governance described below.

2. A governance committee responsible for evaluation of the work of claim provider, voting policy of the execution level voting. The work of the committee is also by a voting process.