The Governance of Degenerates Part II: Into the liquidityborg

“Cyborg-gal-avi” by Pandora Popstar/Lainy Voom is licensed under CC BY-NC-SA 2.0

Where would such machines come from?

One place to look for such machines is in distributed systems (the other place, which I will not cover here, is in data cooperatives). Distributed systems exist without a centralised controller. The security, stability and existence of the machine depends upon enough people choosing to direct their own resources and ideas to running nodes. Distributed systems are used right now for transactions and registries, forming what we call ‘the internet of value’. In this extended, imaginary scenario, the distributed machine is also able to make decisions based on what we choose to feed it.

Peer-to-contract machines

In an effort to remain decentralised and overcome some of the inefficiencies of peer-to-peer exchanges and trading, blockchain developers created automated financial infrastructures. DeFi, short for decentralised finance, includes decentralised exchanges, prediction markets, asset management tools, and derivatives. DeFi DAPPS (decentralised applications) are mostly built on the Ethereum blockchain. These are what Stani Kulechov of Aave has named “peer-to-contract” technologies.

Participative intelligence and the social life of tokens

Taking data derived or extracted from multiple sources and applying algorithms to it is already the basis of much automated decision-making. How then are these decentralised financial tools and infrastructures different from other machine learning or AI systems?

DAOja vu

There is nothing to say that the outcomes are good just because they are collectively governed. The yield farming frenzy of Q3 2020 exposed some heinous greed, a bit like the ICO craze of 2017 but (thankfully) less accessible to the general public. DeFi has already experienced a number of exploits, glitches and scams. We have also seen communities rally around these events and attempt to rescue protocols in trouble. Self-interest and common good motives are both observable in DeFi.

Composing new capabilities

There are other ways to understand the rise of DeFi, such as its composability (meaning the ability to use existing apps, oracles and liquidity pools as building blocks for new applications). Anthropologist Christopher M. Kelty, writing on open source communities, came up with the concept of recursive publics. By that he means that code is a form of speech and open source communities effectively write the terms of their own speech:

Playful infrastructures

All financial infrastructures are communication infrastructures, performing information-matching to settle payments and accounts at the end of the day. Lana Swartz in her recent book also looks at the cultural and social network dynamics of money, from payments specific to social media platforms to credit cards imbued with status, aesthetics and desire.

A meme from when Elon Musk tweeted about the original meme coin (dogecoin) at a time when DeFi yield farming was in full swing.

When DeFi grows up?

At the start of this article I posed the question, “what might it be like to be part of a machine that makes decisions?” Firstly, we’d have to confront the fact that these robot overlords are not just made by us, but they are constituted of us — or at least require our active participation. They would be built from our own personal resources and put to work for the collective interest (or harm).



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Ellie Rennie

Ellie Rennie


Professor at RMIT University, Melbourne. Australian Research Council Future Fellow 2020–2025: “Cooperation Through Code” (FT190100372) Twitter: @elinorrennie