To the chagrin of crypto art proponents, the “Wild West” continues to be the metaphor of choice for mainstream media coverage of the NFT market. Seeking a corrective, frustrated defenders of the space periodically lament that all NFT projects are being unfairly painted with the same brush. If the media and masses paid more attention to the projects that are Actually Good, then they might realize that not everything is a scam. But the Wild West metaphor doesn’t only apply to the scammy margins of the NFT space. The core, where the most respected and well-liked projects reside and where reputation and insider status matter, is lawless still—or, phrased less dramatically, characterized by underdeveloped accountability mechanisms, particularly when it comes to the actions of founders across their various pseudonyms. If we wanted to view things more optimistically, we might say that informal systems of accountability are starting to emerge at the heart of the NFT ecosystem.
The current state of accountability for NFT projects is reflected in two incidents this year where project founders’ activities under past pseudonyms came back to haunt them. Azuki’s Zagabond admitted he “fucked up” and was “truly sorry” for abandoning his previous projects CryptoPhunks, CryptoZunks, and Tendies in what arguably amounted to serial negligence towards holders, acknowledging the need for “more transparency and communication.” Similarly, Milady Maker’s Charlotte Fang disclosed their previous pseudonym of Miya, associated with, among other things, a suicide cult, apologized for “trying to hide the past account” and “its toxic baggage that’s hurting [sic] Milady community & poisoning the vibe.” In both cases, we saw rudimentary accountability systems grind into action. Past behaviors were brought to light, subjected to public discussion, and consequences followed: Miya/Charlotte stepped down, Zagabond promised to make amends by redistributing funds. So far, so good. These sequences of events more or less conform to the one-sentence definition of accountability developed by political scientist Andreas Schedler:
“A is accountable to B when A is obliged to inform B about A’s (past or future) actions and decisions, to justify them, and to suffer punishment in the case of eventual misconduct.”
Things, as they usually do, become murkier on closer investigation. In this definition, and in Schedler’s frequently cited work on the topic, accountability can be broken down into two dimensions: answerability and enforcement. Answerability is the requirement to both inform and explain your actions to another party. Enforcement is what it sounds like: rewarding good behavior and punishing bad behavior with real, material consequences. Answerability without enforcement is not accountability. As Schedler writes: “If a police officer kills someone in custody without due cause and still walks free, it does not satisfy the principle of accountability if a journalist documents this abuse of authority.”
This two-dimensional, mutually constitutive concept of accountability is simple, elegant, and may help the discourse around NFTs move beyond the impasse created by a limiting view of accountability as something that is primarily about identity. Answerability is more than transparency (providing information about identities), and enforcement can go beyond reputation (the staking of identities).
While much discussion around transparency and accountability in NFTs has centered on responses to the doxxing of the BAYC founders, the practice of self-doxxing, whether at the outset of a project or in response to allegations of wrongdoing, is an interesting example of accountability via self-restraint on power. We can compare it to what Schedler refers to as the “complex series of ‘self-binding’ mechanisms” that modern democratic states, their leaders, and citizenry impose upon themselves, holding themselves accountable in addition to being held accountable by institutions, the media, civil societies, and individual citizens. An earlier piece for Zora Zine describes how core contributors to social token DAO FWB had “chosen full transparency and doxxed themselves” as a “first step to being accountable to the community.” How “full” or total is the transparency secured by self-doxxing, whether an individual discloses a government name or a previous pseudonym? What is “full” about Charlotte Fang’s “full disclosure [that] I am Miya”? Rather than drawing a binary between full and partial transparency, we can turn again to the political science literature and consider instead the distinction between clear and opaque transparency.
How ‘full’ or total is the transparency secured by self-doxxing, whether an individual discloses a government name or a previous pseudonym?
In a governance context, Jonathon Fox writes, clear transparency reveals “reliable information about institutional performance…[and] institutional behavior”, while opaque or “fuzzy” transparency is merely “the dissemination of information that does not reveal how institutions actually behave in practice, whether in terms of how they make decisions, or the results of their actions.” Opaque transparency can also refer to the sharing of information in a way that is nominally open and public, but actually requires a substantial amount of work to turn that information into useful knowledge about whether power is being, or has been, abused or not. Amid the grand gesture of sacrificing privacy and valiantly disclosing one’s own identity “for the good of the community,” it’s easy to overlook the fact that in terms of creating answerability via transparency, self-doxxing, as a form of opaque transparency, doesn’t do all that much. Knowing the government names or past pseudonyms of important contributors doesn’t tell me whether the roadmap milestones are likely to be met, and just knowing the pseudonym under which a founder allegedly did questionable things doesn’t give me any information with which to evaluate their behavior unless I spend time and effort researching the allegations myself. An interesting question to consider is whether it would be possible to provide information that allows me to evaluate project decisions and performance, and perhaps even a founder’s trustworthiness and history of ethical conduct, without any real or alternate identities being revealed at all. If doxxing is neither sufficient nor necessary for clear transparency, is there anything else that it’s good for? Recall that answerability doesn’t lead to accountability unless combined with enforcement. Perhaps identity disclosure has more to do with enforcement than answerability.
To be effective, enforcement mechanisms require the party being held accountable to have something meaningful at stake. In politics, it is the staking of reputation that is supposed to give enforcement mechanisms their teeth for behavior that is bad but not illegal. As Schedler writes, “the destruction of reputation through public exposure represents one of the main tools of accountability.” The status quo of accountability in the NFT realm isn’t much different—we saw both outcomes in the cases of Milady and Azuki, with plummeting floor prices following public backlash reflecting reputational damage and its material consequences for both project teams and holders. Reputation staking also exists as a self-imposed restraint on power. In their article “Why Doxxing Doesn’t Work”, TheManther and TheSilber point to Punk 6529, the prolific NFT collector and fund manager for institutional investors, as one of many examples of reputation staking:
“He has more than 250K Twitter followers and has started an NFT fund without being ‘doxxed.’ Knowing he’s involved with the project gives credibility. He has put his reputation on the line; in every way that matters…”
In addition to someone staking their own reputation, the example of Punk 6529 “giving credibility” by being involved in projects shows how reputation staking can also work by proxy. In both the DeFi and NFT ecosystems, pseudonymous teams can create, or at least perform, accountability via the potential of meaningful enforcement by having a trusted third party back them. While reputation staking and reputational damage as enforcement already exist de facto, TheManther and TheSilber also call for more codified versions of these mechanisms through crypto-native means, such as reputation escrow services, a project confidence rating as a form of accountability accreditation, and a system whereby credits can be accrued over time by staking one’s reputation.
Reputational damage through public exposure is a form of shaming, and yet, as Fox writes, ‘the shameless may not be vulnerable to public exposure.’
Reputation staking does go some way to solving the problem of enforcement in the extralegal arenas of NFT projects while maintaining pseudonymity and avoiding the voluntary or forced disclosure of government names. In terms of creating meaningful and effective enforcement mechanisms, however, reputation staking, whether onchain or off, runs into some interesting limitations. Reputational damage through public exposure is a form of shaming, and yet, as Fox writes, “the shameless may not be vulnerable to public exposure.” No matter whether it’s your government name or a persistent pseudonym that is taking the damage, any project founder that is the least bit brazen may simply choose to weather the public criticism and bad optics—they may even come out better on the other side, taking the position of the defiant, unapologetic underdog. Their public mistakes make them real, authentic, and relatable—who hasn’t made a few unscrupulous choices here and there, and does it really matter if they also did great things? They can pose as outcasts, enemies of the system, stoic victims of mob mentality who deserve a second chance precisely because they didn’t grovel or shrink with fear. (This type of public figure is typically well-received, even seductive, for many in crypto, and gels well with the culture’s libertarian, meritocratic leanings.) This effect is compounded by the fast news cycles (Twitter cycles?) that seem to wipe the slate clean every week, and the many bagholders so emotionally invested in projects and their mythologized founder figures that they will sooner defend them than endure the psychological distress of demanding consequences.
In this way, if they play their cards right, accused founders may be able to turn public exposure intended for reputational damage into a source of antifragile reputational gains. These gains may even outweigh other sanctions that go along with public exposure. In politics as in NFTs, removal from office and providing compensation or remediation are two further forms of enforcement that often accompany public shaming. Charlotte Fang “left office” by stepping down from the role of CEO at Milady Maker; Zagabond stayed “in office” but committed to financial remediation. How might they answer if you asked how their experiences of being held accountable for their actions under previous pseudonyms changed their lives? It seems like they’re doing fine. Charlotte Fang continues to wax poetic on Twitter for a captive audience of supporters and detractors alike, Zagabond seems excited about a recent drop of Azuki jackets that symbolize “the fighting spirit of Azuki, demonstrating the enduring power and creativity of a community-first brand.”
One factor in why Fang and Zagabond were able to make a smooth return to their status as active public figures might be that they continue to benefit from their association with prolific communities that have made their projects successful without, in some cases in spite of, the actions of the founders. When choosing how to respond to allegations of bad behavior or abuses of power by the founders of a project that you’re part of, demanding accountability or defending them to the death aren’t the only options available. A third choice that some holders may embrace is making sure that the badly behaved founders become completely irrelevant to the project and its outcomes. In light of the antifragility of online reputation (any publicity is good publicity), irrelevance might be the only meaningful form of reputational damage. But it’s difficult to make this work. Intuiting this risk, founding teams may try to recuperate the threat of irrelevance by magnanimously embracing it as if it was their idea. It was you guys all along! I never mattered. You guys are amazing, you are the future of [project name]. Post PR crisis, Azuki leaned harder into being “community-first”, Remilia similarly leaned harder into their “post-authorship” stance. We can think of this positioning as the NFT equivalent of DeFi core teams claiming to have “stepped back” and taking the role of mere “contributors” to their protocols. But if you, as a founder, truly believe in your own irrelevance vis-à-vis your community, why are you expending so much energy in proclaiming it? Why not just go dark?
I can’t fault anyone for not being truly ready for professional self-obsoletion and voluntary ego-death. I’d struggle with it too. Until we find ways to make irrelevance easier to inflict as a sanction, it might make sense to treat reputation-based, identity-focused accountability as a dead end, and instead turn our attention to less philosophical and more practical enforcement mechanisms that carry concrete financial consequences, such as vesting schedules for founding teams that depend on roadmap milestones being met, as determined by third-party arbitration.
At the same time, we’d be remiss to not speculate on ways that rebellious subgroups in DeFi and NFT communities could coordinate to make those hollow proclamations of being “community-led” actually come true. While it’s unclear whether anything will come of it, a recent post outlined how UNI holders could reduce the power of Uniswap Labs, the founding team, and take the protocol into their own hands, such that “the Labs entity should eventually become just one (albeit important) team that works on the behalf of the protocol.” This might mean creating one or many alternative development teams that contribute to the protocol, potentially competing and vying for power with each other. Personally, I find the idea of hostile takeovers by evil twin core teams who rise up to challenge the dominance of founding teams a compelling one, befitting of the naturally chaotic energy of crypto at large. It also offers an interesting provocation for the Azuki and Milady communities. What would the anti-Azuki, or anti-Remilia look like? What would they build? Do they perhaps even exist already? Community ownership and decentralization are often described in terms of cooperation and consensus, but I’m curious as to whether we can make faster progress towards these power structures through antagonism, conflict, and dissensus. I’m no fan of the Wild West metaphor, but if you are, you might like to think of this as frontier justice.