Title: Governing Composable Commerce as a Public Good
Team members: Mu & Devin
Short summary of your improvement idea:
Context: Commerce is continuously evolving, with the e-commerce market reaching $2.78 trillion in 2023, signaling major economic growth. However, concerns over opaque governance and platform risks persist, exemplified by criticisms of domain giants for anti-competitive practices (FTC, 2023). India’s ONDC initiative aims to mitigate such monopolies by transitioning to open protocols, reducing consumer costs and boosting competition, though issues like data transparency and dispute resolution remain (Pymnts, 2023; Girdar, 2023).
Improvement idea: For the past six months, Mass Labs has been developing an L2/L3 protocol for onchain e-commerce focused on data sovereignty, portability, and community ownership. We plan to govern it through its own ecosystem, though governance mechanisms are yet to be defined. With this grant, we seek to refine protocol governance and manage ecosystem dynamics by leveraging lessons from ONDC and traditional platforms like Shopify, aiming to establish a fairer, more innovative future in commerce.
Answers to the following questions:
- What is the existing target protocol you are hoping to improve or enhance?
E-commerce ecosystem governance
- What is the core idea or insight about potential improvement you want to pursue?
We aim to shift from traditional platform-based to protocol-based governance in e-commerce (e.g. Shopify, Woocommerce), moving from an exploitative model to one that equitably distributes control and benefits. Current models centralize power, limiting innovation and misusing data. Although this centralization helps manage ecosystem relationships and the dynamics between collaboration and competition, it results in significant issues like reduced interoperability, opaque algorithms, data monopolization, and anti-competitive behavior.
Our proposal is to develop a community-governance model for an open L2/L3 e-commerce protocol that addresses these issues, promoting transparency, fairness, and innovation. Such innovations might include supply chain verification, verifiable reviews, and targeted advertising, as well as support creators in building communities and managing customer rewards, improving buyer-seller interactions.
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What is your discovery methodology for investigating the current state of the target protocol?
- Field-Observation: Analyze terms and conditions of leading online marketplaces and the ONDC/Beckn Protocol to identify governance challenges in e-commerce ecosystems.
- Stakeholder Interviews: Conduct interviews with stakeholders in offchain e-commerce to assess the effectiveness and issues within their governance mechanisms.
- Technical Analysis: Evaluate API accessibility and data management in existing ecosystems to understand data availability, siloing, and implications for user privacy and innovation.
- Governance Research: Leverage commons management theories, like those of Elinor Ostrom, to study governance structures in both successful and failed protocol-ecosystems, deriving principles for effective protocol governance.
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In what form will you prototype your improvement idea?
Software Simulation: Utilize agent-based modeling to simulate the dynamics of the proposed governance system, exploring interactions among ecosystem participants under various conditions to assess its strengths and vulnerabilities.
- How will you field-test your improvement idea?
Documentation and Developer Engagement: We will create a comprehensive governance document to detail our model’s mechanisms, offering a clear blueprint for its implementation and operation. We will consult with developers from established e-commerce ecosystems like WooCommerce and Shopify, presenting our governance document to solicit feedback on its practicality, impact, and implementation aspects.
Collaboration with OnChain Marketplace Projects: As Mass Labs develops an L2/L3 e-commerce protocol, we will pilot our outcomes. We are already in conversation with blockchain-based marketplaces Hamza/Loadpipe and Crowdmuse and will engage Slice for additional feedback. By collaborating with these communities, we aim to confirm the feasibility and effectiveness of our governance model for a protocol-driven e-commerce ecosystem.
- Who will be able to judge the quality of your output?
Our proposal’s success hinges on ecosystem response, which reflects the effectiveness of our governance model in fostering a user-focused e-commerce environment. We will gather feedback from various sources:
- Project Collaborators: Feedback from onchain commerce projects Hamza/Loadpipe, Crowdmuse, and Slice, alongside our Mass Labs team.
- E-commerce Participants: Insights from sellers and app developers in offchain marketplaces to evaluate our proposal’s practical impacts.
- Major E-commerce Platforms: Using Shopify, WooCommerce, and Amazon as benchmarks to assess our governance model’s performance and pinpoint improvement areas.
- How will you publish and evangelize your improvement idea?
Dissemination strategy includes both offline and online methods to enhance visibility and encourage dialogue.
- Publication: Publishing detailed findings on Mirror.xyz to engage p2p communities, with additional promotion across Farcaster, Lens, Bluesky, Twitter, and LinkedIn to reach both niche and broader audiences.
- Conferences and Workshops: Participating in relevant conferences and workshops to present findings, submit papers, and host sessions or panels for discussion and diverse input.
- Development of an Open-Source Community: Making research, code, and simulations openly available to foster collaboration and advance the application of protocol governance in e-commerce.
- What is the success vision for your idea?
Our vision for success involves establishing an e-commerce protocol ecosystem that effectively balances community ownership with efficient management. We aim to avoid the tragedy of the commons and prevent dominance by any single faction, ensuring that the ecosystem equitably supports the goals of both buyers and sellers as well as application developers within it.