## A brief introduction
I originally posted this article as a thread on Twitter after seeing calls for the ACD to implement a conflict-of-interests policy because of fears of governance capture (mostly related to the [events leading up to the inclusion of EIP-3074 in the Pectra fork](https://ethereum-magicians.org/t/protecting-the-eip-process-from-special-interests-examples-case-study/6542)). While I think it’s important to defend Ethereum governance against the threat of adversarial actors, excessively formalizing governance processes risks creating unintended consequences and eroding Ethereum’s ethos of decentralization, credible neutrality, and permissionless participation.

The [Twitter thread](https://x.com/eawosikaa/status/1783660355744346295) goes into detail around the problems with prematurely implementing a conflict-of-interest policy for core Ethereum researchers and developers. [Josh Davis](https://twitter.com/joshdavislight) suggested turning the thread into a blog post to make the content easier to share and reference—an idea I thought was worth exploring. The “article” reproduces the content from the original post on Twitter and only makes edits for grammatical mistakes I failed to catch in the original post (along with some small changes to improve structure).I hope you enjoy reading it!

## Keep Ethereum governance scrappy, fun, and chaotic

The calls I’m seeing for the ACD to implement a "conflict-of-interest" policy (as part of the debate around EIP-3074) is evidence we still haven't grasped Ethereum's essence. Spoiler: Ethereum isn't your average VC-backed project that looks no different from your Silicon Valley startup.

Ethereum is first and foremost an open-source software project run by hundreds of people who just showed up one day and said "I don’t know who you are, but you look serious about building for decentralization and slaying Moloch—let's collaborate and build cool tech together." Sure, you have a few "coordinating entities" like the Ethereum Foundation, Ethereum Magicians, etc., but those organizations are loosely organized and don't even fit the picture of a traditional top-down organization.

That means Ethereum's governance and research/development process can be very scrappy and disorganized ([Ethereum Cat Herders’](https://twitter.com/EthCatHerders) motto is "bring the minimum order that chaos needs to move forward" for a reason). It doesn’t always operate smoothly and efficiently like people want (or expect), especially when research proposals/governance decisions have implications for the million-dollar businesses built on top of the core protocol.

But the scrappiness and disorganization and loose decentralization and prioritization of "rough consensus" over formal approaches like on-chain governance or off-chain voting in Ethereum is a feature, not a bug. Not only does the lack of excessively formal procedures and bureaucracy reduce the barrier to participation (no one monopolizes special knowledge and benefits from information asymmetries), but it makes Ethereum resistant to capture and several edge cases that projects with more "polished" structures for governance often face.

For instance, I’ve pointed out that a conflict-of-interest policy doesn't even help you detect bad actors that wish to capture the governance process. Worse, enforcing a COI policy for core developers and researchers can have unintended consequences:

### A conflict-of-interest policy provides a false sense of security

If Mr. X declares no conflict of interests, then they must be immune to external pressures (even the ones that we don't see), no? Now, count how many times journalists, judges, bureaucrats, and executives have managed to bypass COI regulations and still acted nefariously (after declaring no conflict of interests). And you still believe COI is a silver bullet for keeping people in check?

Having developers reach "rough consensus" on proposals is arguably effective and more aligned with the structure of a decentralized collective like the ACD. Insofar as everyone has equal weight in the decision-making process, it doesn't matter how much conflict of interests I have—I simply cannot capture the governance process and force through a bad proposal.

Traditional organizations, however, concentrate decision-making power in a key man/woman and so, even with COI rules in place, one person (who might be subject to invisible pressure to act a certain way) can unilaterally corrupt the governance process. That's what centralization and "organization" and "polish" gets you.

### A conflict-of-interest policy disincentivizes legitimate contributions from well-intentioned individuals

Ethereum is a brilliant example of how open-source projects with a Cypherpunk-y culture can find PMF without having to sell out to corporations, or limiting the project's reach to a small user base. The only reason this works is because Ethereum has figured out (and is still figuring out) a way to align interests of (pragmatic) companies/individuals who want to make money and (idealist) individuals who want to build permissionless, secure, censorship-resistant digital infrastructure ("Ethereum-alignment" as the cool kids call it).

If we enforced a conflict-of-interest policy and took it to its (extreme) logical consequence, no one would get anything done. Take, for example, this comment: "VitalikButerin wrote the Ethereum whitepaper and has substantial amount of ETH holdings. Thus, Vitalik cannot participate in the R&D process because we assume Vitalik must be biasing the process to make changes that pump the price of ETH and, consequently pump Vitalik's bags."

Imagine someone said this and we never had VB contributing to L1/L2 R&D. We can see how much he's contributed over the years and can understand how much the ecosystem would have lost if we let some absurd conflict of interest concept push out well-meaning people from contributing to Ethereum because they committed the crime of ever wanting to work for pay or hold investments (like every other person does).

IMHO It's okay and normal to have financial interests *and* be intent on advancing Ethereum. It's why we usually harp on Ethereum-alignment since it allows companies and individuals like to balance financial interests with a desire to contribute positively to the protocol’s development.

More importantly, I don't think it's useful in the long-term to overindex about potential conflict of interests from for-profit companies engaging with the EIP process (or individuals currently/previously affiliated with said companies), such that we prevent skilled people from working on Ethereum L1 R&D. People are always going to find fault and make up elaborate narratives about the actions of contributors if they wanted--but eschewing ecosystem contributions for that reason is a net negative for everyone.

For example, we’ll often describe the Ethereum Foundation as “neutral”, but we all saw how many people raised pitchforks and accused the EF of trying to force through the issuance curve change (for some very absurd reasons) a couple of weeks back, didn’t we? Despite the EF trying very hard to be neutral, people still think *that* level of neutrality isn't enough.

Now, imagine the EF closed shop and said "some people on crypto-Twitter think we're biased and cannot be trusted by the community, so we'll let the Ethereum ecosystem pilot itself." Does that sound like a net positive for the ecosystem? Of course not. But the people who are busy criticizing the EF don't want to acknowledge the long-term impact of their conspiracy theories.

As Ethereum evolves into a high-value settlement layer for thousands of applications, governance will become more dicey. The reason is simple: changes to the protocol have material implications for various groups (investors, companies, protocol DAOs, etc.) and their financial interests.

We've seen this play out during the ETH issuance debate, and now during the EIP-3074 debate. In all cases, a larger part of the controversy is whether the proposal is because people are divided on whether a proposal supports or harms competition between different industry players.

At the same time, we shouldn't look to centralization and TradFi tactics to solve problems facing a project that has decentralization as a core ideal. I've seen StarkNet folks say "keep StarkNet strange" as a way of reminding the community to stay true to its ideals; we should borrow a leaf from the StarkNet community's playbook and "keep Ethereum scrappy, fun, and chaotic.”

I say to keep Ethereum scrappy, fun, and chaotic because it's tempting to give into the urge to become a “serious” project...especially as institutions and Big Tech companies start entering crypto en masse. But, that’s a fast path towards becoming “just another open-source project that got captured by Wall Street and Silicon Valley”. Soon, we’ll have critics telling us we need to have core developers put their hands on a Bible and say “I solemnly swear I have no conflicts of interest (except the ones I haven’t disclosed, of course)” as [Tim Beiko](https://twitter.com/TimBeiko) watches on with a grave face.

Then we’ll have “off-chain voting and signaling” and “on-chain governance” and see groups/individuals spending material resources to campaign for changes to the protocol. In this future, the status quo (where any person can show up and open a PR to have an EIP/ERC added to http://eips.ethereum.org) disappears and “permissionless innovation” becomes a thing of the past. Who knows what we’ll do next—implement on-chain governance, so that whales can unilaterally decide what upgrades or protocol improvements are accepted or rejected?

I don't doubt that processes can be improved, but there’s a reason people say “complex systems fail in complex ways”. Ethereum’s governance and R&D process isn't pretty and would give a political scientist heart attacks (“how can you possibly be making missing-critical decisions based on fuzzy rough consensus???”). But it works, and there's simply no reason to change it—to change it is to open a Pandora’s Box of changes that might erode Ethereum’s credible neutrality, (social) decentralization, and resilience to capture by special interests.

Thanks for coming to my TED talk.