Soulbound Tokens and Decentralized Society: An Interview With Glen Weyl
The economist believes pluralism could help crypto avoid a dystopian future.
- Crypto Briefing spoke with economist Glen Weyl about his vision of decentralized society and the role "soulbound" tokens might play in them.
- His paper, “Decentralized Society: Finding Web3’s Soul,” reached the top 50 most downloaded articles within a month of its publication on Social Science Research Network..
- According to Weyl, the essay advocates for cooperation across difference, pluralism, and diversity instead of a hyper-financialized or AI-controlled Web3.
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Crypto Briefing recently spoke with economist Glen Weyl, the lead author of “Decentralized Society: Finding Web3’s Soul,” a surprise hit that quickly became one of the Social Science Research Network’s most downloaded papers. Co-authored in May with Ethereum creator Vitalik Buterin and Stanford Law alum Puja Ohlhaver, “Decentralized Society” presents a vision of decentralized politics that draws upon a novel concept put forward earlier in the year by Buterin: “soulbound tokens.”
In a short essay published in January, Buterin advocated for the adoption of what he called “soulbound” tokens, or tokens that could not be bought, sold, or transferred away from their owners. Being non-transferable, soulbound tokens (or SBTs) would demonstrate uniqueness in a way that couldn’t be traded to someone else, allowing them to authenticate the credentials of whoever held them. Drivers’ licenses, university degrees, formal identification—all could be encoded on the blockchain and verified by the token.
We spoke with Weyl about what a decentralized society would look like, the role SBTs could play in it, and the various arguments against his position. The founder of RadicalxChange and a political economist at Microsoft Research special projects, Weyl is also the co-creator of quadratic voting and the co-author of Radical Markets: Uprooting Capitalism and Democracy for a Just Society. In our chat, he expanded upon his vision for decentralized society and the role SBTs might play in them.
On Decentralized Society
Q: Your paper “Decentralized Society: Finding Web3’s Soul” made a big splash upon publication. How do you feel people received it? And how do you feel about the feedback you’ve gotten?
A: Well, the first thing I would say is that I didn’t realize it was possible for such a dense and abstract thing to go so viral. So that was surprising. I knew that with Vitalik [Buterin] it would have a big impact. But within a week it had been downloaded more times than the other paper I’d written with Vitalik (“A Flexible Design for Funding Public Goods,” 2019), which had also been my most downloaded paper of all time back then. And now, less than a month in, the Soul paper is in the Top 50 most downloaded papers of all time on the Social Science Research Network. I think it’s almost unprecedented in terms of the number of people interacting with it. So that’s pretty interesting.
And the second thing I would say is that, you know, there’s been a whole range of different reactions. There’s been what I would call the “crypto bro reaction,” which is like “Awesome, this is the next big thing”—and that’s not particularly edifying. Then there’s been a number of people who really get it, and that’s really exciting. And then there’s been a bunch of backlash from people in the Verifiable Credentials (VC) community. Which has been fine… But it’s not exactly what I might have hoped for. There’s also been a little bit of blowback external to the Web3 community. But it’s mostly been within the Web3 world that I’ve had interactions so far.
Q: Right. Were you surprised by the VC community’s reaction?
A: Yes, in a few ways. I mean, I’m pretty close with some of the people in that world and I didn’t mean the paper to be in any particular way negative on [Verified Credentials]. It’s just been a lot of, really, really, really strong emotional reactions that I still don’t fully understand. So that’s been a bit strange. I thought [the paper] was not completely aligned with their main perspective, but I didn’t mean it to be in any way negative towards them. So I was just surprised by that reaction.
Q: Is there anything major you’ve changed your mind about following the publication of the paper?
A: I wouldn’t say anything major. I mean, a lot of people interpreted the paper as being really into using blockchains as the primary substrate, and I did not intend that to be what the paper was arguing for. But I think I’ve come to have more appreciation for the costs and benefits of doing that. I would say the reaction from VC people on the blockchain stuff has given me a little bit more appreciation for blockchains, and a little bit less appreciation for VCs overall. I think when I wrote the paper I was moderately pro-VC and reasonably anti-blockchain. Now I’d say I’m kind of neutral. I think they basically have equal strengths and weaknesses.
Q: I saw a lot of people in the VC community criticize the idea of putting personal data on the blockchain.
A: Yeah. I mean, a lot depends on what one means by the word personal data, right? Is the CV that you post on LinkedIn personal data? Yes, it is. It’s something most people have in the public domain. So I’m a little bit surprised that people think so strongly that that’s information that should never be public. Obviously, there are many other things that aren’t like that, that are very private, and we definitely would never advocate bringing them on blockchains.
You know, I found it very strange that the VC people gave virtually zero attention to the actual applications that we were talking about. Almost all the attention has been on whether it’s religiously evil or not to do X, Y, or Z, which is just not my focus. My focus is on, “What technology do you need to explore these use-cases?” And at what costs to other values?
Q: Papers tend to be quite technical in crypto. I opened yours thinking it was going to be a white paper, and I was surprised when it wasn’t. My reading is that it advocates for putting data on-chain and for using a community recovery paradigm [for lost “Soul” wallets]. And it also seems to have a political vision for a hypothetical blockchain society. Would that be a fair description of the paper?
A: I think maybe the single thing it most strongly advocates for is the use of this notion of cooperation across difference, pluralism, or diversity. And community recovery is part of that, and all the correlations discussed [in the paper] are part of it. The notion that we can go beyond the ways that we’ve thought about decentralization—you know, beyond just openness and a lot of participants. To really focus on ensuring a lack of capture by any concentrated group with strong social connections. Reimagining decentralization in a social context is really what soulbound tokens are meant to enable. And the paper is much more about serving that goal than about any particular implementation. We didn’t focus on blockchains because I have any particular affection for them, but because there’s a lot of activity in the crypto space. And we thought—in retrospect correctly—that by showing people how to achieve ambitious goals like [creating a decentralized society], using the primitives that they were using, we might get pretty far in terms of investment, enthusiasm, and engagement.
Q: You definitely got people’s attention.
A: If you want to evaluate the success or failure of something, empiricism is not the only approach, but it is one approach. And I would say that, empirically, the paper did reasonably well.
Q: So would it be fair to say that the paper is political?
A: I don’t think that there’s a sharp separation between politics and technology. I think they’re incredibly intertwined. And I think that things that try to pretend like they’re not political and they’re just doing something technological… These things are actually engaging in a more dangerous form of politics. So yes, the paper certainly has political elements to it, but certainly not political in the standard left-right sense. You know, I wish the technology were more political and the politics more technological. I wish politics could advance beyond our current debates to solve what both sides want. And I wish that technology were more open about the political values that it has within its code. The paper tries to strike a balance by being open about both sides and how they interrelate with each other.
Q: Would there be a structural incentive for the politics of diversification and pluralism that you argue for in the paper? Why would people who are not politically aligned with you use this technology the way you want them to?
A: Well, I mean, the term “structural incentive” is a little bit misleading because our society has different types of structures. We have a capitalist structure, which is about making a profit. We have a political structure, which is preoccupied with getting support—votes. And we’ve got an academic structure, which is about prestige and publications and so forth. And I think that what can help us appeal to people in those different contexts differs.
I think pluralist values are more consistent with many people’s hopes for a future than hyper-financialized values or top-down AI (artificial intelligence) values. Maybe for no other reason than that they are pluralist and so lots of people can at least go along with them a little bit. So I think pluralism can work well politically for that reason, but I think it can also work for profit, because fundamentally what every business fears most is disruption by new technologies. And new technologies come from the intersection of existing disciplines, circles, etc. There’s a huge amount of evidence on that. And if we have powerful tools that enable people to start those new clusters, and bridge their communities, it will be an enormous engine for people to form startup groups or for companies to prevent disruption.
There’s this great book called The New Argonauts, and it argues that a reason behind Silicon Valley’s success was that universities were a sort of neutral territory in which people working at different companies could end up talking to each other, exchange ideas, and build startups of their own. And if we have a powerful tool for doing that in the online world, it’s just an engine for productivity. So that’s an economic reason. And then there are academic reasons and there are all these different elements of life functioning according to different logics and reasons. All of them might be attracted to pluralism.
Q: You’re making the case that pluralist politics would be beneficial to the people implementing them, and the incentive comes from that. Is that it?
A: Yeah, that’s one incentive. But that’s only an incentive in the economic realm, where people are motivated by making money. As I said, that’s not the only incentive.
Q: Okay. I live in a really small village. All the people I know here are working class. If the community were to be defined by its actions and associations, every person would look very similar to their neighbors. Under the diversification politics your paper advocates for, it seems to me people living in rural places would find themselves at a disadvantage compared to the ones in cosmopolitan settings. Or am I mistaken?
A: I think there’s truth and nuance to what you’re saying. I do very much agree that urbanity and modernity are precisely the contexts in which this sort of intersectional nature of identity arises.
You know, in less urban or less “modern” contexts, people’s social circles overlap a lot more. That would normally be… not necessarily treated as a Sybil attack [by SBT-using protocols functioning under pluralist politics] but effectively, the whole community would be pooled together and treated as a unit in how it interacts with the outside world. Which, by the way, is how a lot of federal systems kind of work, right?
I think that’s neither good nor bad. On the one hand, the community gets a lot of self-governance in that setting, because there is a coherent set of people, and the people inside really have control over the whole thing. Whereas a lot of these modern urban people are intersecting with a thousand things, and [they] probably aren’t viewed by the system as pretty loyal in the local context of decisions there. So they won’t get much influence on that. But on the other hand, they’re less tied to just one community. And so for broader decisions, they’ll get less luck, but they’ll be lumped in a little with many different communities.
So, you know, I think that these pluralist systems really have two offsetting principles: one is subsidiarity, which is giving power to local communities, and the second is cooperation across differences. And those offsetting incentives—I don’t think they’re either good or bad. Instead, they reward you for doing the thing that’s natural for you in the currency you should care about. If you are tied to your local community and care about your local community, then you’re going to get authority within that community. But on the other hand, for broader decisions, it’s your community as a whole that will speak and not each individual member.
Q: You and [co-author] Puja Ohlhaver said on Laura Shin’s podcast that community recovery mechanisms prevented people from selling their wallet because they could just recover it from their community—nobody would want to buy it. But what about a voluntary handoff? Like a grandfather delegating a wallet with an excellent credit score to his granddaughter. Isn’t that a problem the technology would have to solve?
A: Well, I mean, there would be a question of whether the community would assent to the handoff because if that child ever lost the wallet, they’d still need to go back to the same community to recover it. But at some level… It’s not necessarily a problem. You know a lot of people are against any wealth tax but then are totally in favor of an inheritance tax. And I don’t agree. I think the distinction we make between individual human beings versus people who share a lot of social contexts is misleading. You know, I actually think that you can pass down parts of your family and its reputation to children. It’s not true that the only thing you inherit from your parents is wealth or education. You inherit various characteristics of the family name and so forth. But I haven’t thought about this a lot. But it’s not obvious to me that that’s really problematic.
Q: In the paper, you acknowledge the possibility of Soulbound technology being used in a dystopian manner. What would you look out for as warning signs or red flags?
A: People being forced to put data on-chain that they really don’t want to have publicly exposed. Or people competing over people’s SBTs in ways that are based on hate and exclusion, rather than on cooperation across differences. And just to be clear, I don’t necessarily think that the appropriate response to any of these would be to shut it down, critique it, etc. They could be counterbalanced by other institutions that are built on other principles. You know, I don’t think, for example, that the right solution to nation-states sometimes being nationalistic is to abolish the nation-state. I’d rather build the United Nations.
Disclosure: At the time of writing, the author of this piece owned ETH and several other cryptocurrencies.