Mechanisms for Coordination
The following excerpt was taken from an April, 2022 OpEd I had written for ChainSafe’s newsletter “Centralization Strikes Again”. If you find this content helpful, we would love your support on our Substack! ❤️
A core web3 and game theory concept I have recently fallen in love with is the idea of coordination games. I have to accredit this to Kevin Owocki and his excellent Green Pill manifesto, which deeply embeds into the reader’s conscience the idea of regenerative cryptoeconomics — that is, how to leverage blockchain-based technologies in order to coordinate for the regeneration of capital assets and solve for issues like the Tragedy of the Commons and the free-rider problem on public goods.
The more I have internalized and thought about the concept, the more the meme has stuck with me in my head.
It really is coordination games all the way down.
To quickly define per Wikipedia, a coordination game describes a “situation where a player will earn a higher payoff when he selects the same course of action as another player”. The most famous example of this is the prisoner’s dilemma.
The crux of human thriving is sourced from coordination — bartering, money, markets, resource utilization and allocation, governance at the familial/local/state/national/global levels. Conversely, coordination failures lead to war, famine, societal collapse, strife between family members, failed companies, partisanism, and so on.
For the past two-to-three hundred odd years, we have witnessed civilizational levels of coordination thanks to institutional and technological innovations brought on from the industrial age: from the nation state identity, to double-entry bookkeeping, to building a network of roadways connecting one urban centre to the next. Similarly, coordination games have brought us into the information age, where we have set humanity to the moon, laid fibre optic cables beneath titanical oceans connecting similarly weighted continents, and produced vaccines that today help prevent diseases like smallpox, polio and tetanus.
Without doubt, some of these coordination activities have happened necessarily out of centralization. At scale, you can argue centralized coordination is efficient. But it is also the reason why, as Kevin Owocki suggests, zero-sum games like nuclear war have endured. What sane, rational individuals would choose to coordinate in a way that assures mutual destruction? What sane, rational individuals would coordinate to exploit our 1of1 ‘looks rare’ blue planet so that our future generations are left to fight for the scraps? All this for a lack of better coordination mechanisms!
Today, we have entities like Facebook and Google standing on the back of the once Open Internet and playing coordination games without the direct participation nor governance of the individuals they harvest from. Quixotically, they have managed to connect humans across the globe at such staggering pace our biological processors have scant ability to parse the immense amount of information filtering through our feeble brains. It is not surprising to surmise then that many current forms of centralized coordination games are failing humanity.
And yet, like a liberating salve, we were bestowed blockchains, cryptonetworks, and web3. We were gifted The Internet, and now we have been gifted The Internet of Money. Open source; transparent; abundantly clear incentive structures laid right into the bedrock of its code. While decentralized coordination games in web3 are still nascent, it has produced global-scale coordination amongst sovereign individuals the likes which we have never seen before. We must be careful stewards of this gift.
And while decentralized coordination can still be a bit of a pipe dream, it has always been a worthy ideal to strive for. It produced the thriving of the medieval and Enlightenment-era city states; the ideals of Greek democracy; and the constitution and its reverent amendments on liberty and civil rights.
Web3 presents the best chance we have at creating better coordination games than we have ever had before.