A system of sovereign bonds but for alternative types of sovereignties?
Tools for interoperable, sovereign, digital, regenerative commons
<the "fourth sector": a hybrid of the state, the market, and the nonprofit sector - including foundations and NGOs - all interacting in a system of open cooperation and operated by a network of peer-to-peer nodes. This network's mission is to organize our public goods and our commons, using systems of cooperation and modularity that are interoperable between all these entities.>
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<We are currently living in a system where economic flows are organized by the State or by private companies. We wish to establish sovereign bonds but for alternative types of sovereignties, such as consensual communities that establish their own nation and social contract. We seek to capitalize on the social capital, NFTs, real assets, and even GDP of these communities, using tokenization to finance these companies.>
This is part of occasional ‘guest’ articles that will appear in my substack.
This is a translation of the French-language interview with Hugo Mathecowitsch,
which appeared in Discernation, the newsletter of Alain Bezançon, at
Why am I reproducing it here?
Because this is a very well thought of proposal (and project under construction) to create a new layer of sovereignties, that are both local and digital, and can attract and manage capital for regenerative purposes. So imagine an interlinked network of local regenerative projects, which add a new digital layer that can claim some new form of sovereignty, and re-orient investment flows towards regeneration. I have confidence that this will see the light of the day, after several conversations with the protagonist, his experience, and hard work in making it happen.
So, let’s start with the interview:
Hugo Mathecowitsch:
The genesis of “Tools for the Commons” was forged through a set of diverse and significant experiences. It is the confluence of these experiences in the spheres of government policy, particularly on issues of international relations, cross-border investment funds, cooperation systems between regulators and sovereign funds, and investments, which has shaped this vision. My journey also took me through the world of fintech, exploring models of cooperation between banks, national treasuries and development banks, as well as decentralized protocols and the emergence of blockchain and "Real World Assets" (RWA). ), or assets guaranteed by tangible collateral.
It is the integration of these multiple fields – politics, history, anthropology, technology, finance and law – that allowed me to make “Tools for the Commons” a reality. This initiative aims to deploy the knowledge acquired for the benefit of regenerative institutions. These are designed to establish a solid foundation for what is theorized as the "fourth sector": a hybrid of the state, the market, and the nonprofit sector - including foundations and NGOs - all interacting in a system of open cooperation and operated by a network of peer-to-peer nodes. This network's mission is to organize our public goods and our commons, using systems of cooperation and modularity that are interoperable between all these entities.
The ultimate goal is to set up innovative cooperation systems to serve populations and their environment. These institutions are designed to support individuals and their habitats, reversing the current dynamic where people and their environments appear to serve institutions. The origin of “Tools for the Commons” therefore lies in this vision and arises from a technical and executive approach on how to implement these tools to achieve this vision.
How does this vision fit into historical development?
Our vision is part of a centuries-old historical evolution, marked by alternating cycles of centralization and decentralization, shaped by technological advances and societal changes. If we consider the West as an example, today institutionally globalized, we see that its institutions have always been sculpted by historical vicissitudes – wars and technological innovations. We must not forget that technologies transform societies, which in turn reinvent their institutions. Historically, societies with the best technologies or the most militarily advanced have often dominated.
Great civilizations were built around means of communication and the capacity to exercise physical coercion, with a back and forth between centralization and decentralization. The empire, with its extreme centralization, was possible thanks to ideological cohesion supported by writing, with scribes playing a central role in the management of territories.
Feudalism followed, characterized by massive decentralization facilitated by the construction of fortresses — defensive technologies that allowed micro-management and great mobility within society. This resulted in further centralization under the great monarchies, which unified languages and beliefs, aided by the invention of printing and military advances like gunpowder.
The monarchical system gave way to nation-states, technologically close to what we know today, with two major post-First World War differentiations: the fall of monarchies in favor of liberal democracies and the rule of law, then the division of the world in two after the Second World War.
The atomic age ushered in a radical change in international relations, but the most profound impact on our current civilization is the advent of the Internet. This new medium has redefined social and physical movements, challenging sedentarism and opening new frontiers of identity and community belonging.
Our proposal is that of a “fourth sector”, born from the decentralized Internet, where cooperation is formed by consensus and where interoperable tools make it possible to superimpose governances. Current states are struggling to align with this new reality, but we envision a future where traditional institutions will give way to digital native institutions, managed by and for the Internet, facilitating the exchange of know-how and import-export. institutional tools, adapted to contemporary technological and anthropological realities. It is this vision that embraces and drives the convergence of current technologies with new anthropological realities.
“Tools for the Commons” offers several means to realize our vision, structured around four main axes.
The first axis is not technological, but is based on a change in consciousness. To transform the real world, it is necessary to change the software that governs it, and to change this software, we must change consciousness. This tool will be deployed through a dedicated foundation. We plan to create or co-create one or more foundations in the coming weeks that will be in charge of this change in consciousness, broadcasting content, presentations, podcasts, like our first conference in Latin America on start up societies, which was held in São Paulo.
The second axis concerns legal change: creating new legal structures which fit into the reality of the fourth sector and which are interoperable. This includes using existing international agreements and creating what I call PPDP (Public-Private Decentralized Partnerships). We want to enable cooperation on various topics and verticals, thus imagining new special zones and agreements between various actors such as communities organized on Ethereum, Brazilian companies, and public authorities from different countries. We are creating legal tools to facilitate these new interoperable agreements.
The third axis is financing: creating new capital markets. We are currently living in a system where economic flows are organized by the State or by private companies. We wish to establish sovereign bonds but for alternative types of sovereignties, such as consensual communities that establish their own nation and social contract. We seek to capitalize on the social capital, NFTs, real assets, and even GDP of these communities, using tokenization to finance these companies.
The fourth and final axis is a governance as a service marketplace, where different commons management modules are available. These modules can be government, private, distributed or belong to NGOs, each managing a specific micro-service. This will enable tailor-made governance, where one can choose and combine different governance elements from various locations around the world. Effective service providers will be able to export their know-how, while less efficient ones will be rejected by communities in search of better options.
How will people appropriate these new modes of operation and these new ways of thinking about society?
The impact lies mainly in communication and changing consciousness. Currently, we act through our company and soon through dedicated foundations. Furthermore, there is already a significant technological infrastructure, particularly in Latin America, Asia, Africa, and well established in Europe and the United States, thanks to the advanced digitalization of society.
Take the example of a disadvantaged neighborhood in Brazil: even in favelas, where basic infrastructure may be lacking, most households have access to cell phones and the Internet. Thus, the Internet has already supplanted the state as the predominant institution. This is why, when cutting-edge technologies provide a satisfying user experience, they are quickly adopted by the general public. Brazil, for example, demonstrated this with the central bank's PIX system for instant payments – one of the world's best examples of mass technology adoption.
The majority of Brazilians do not need to understand how underlying technologies like distributed ledgers, blockchain or cryptography work, just like we do not need to understand how satellites work to watch television. Countries that have made rapid technological advances and have institutions promoting this digitalization have already created a strong bond with their citizens.
For example, a grandmother in Mato Grosso uses PIX and WhatsApp easily, and might as well adopt a new citizenship if she saw a clear and tangible benefit. If she can get better health services or educational benefits for her children or grandchildren, she will quickly understand how to do it. This is how we can expand the adoption of these technologies beyond the geek and programmer communities.
As for the necessary infrastructure, our goal is to benefit both large operators and small communities. We plan to provide many open source tools, operating in distributed data storage and computing, to maximize the technical sovereignty of local communities. Beyond legal questions, there is also an issue of technical and technological sovereignty. Currently, most servers and data are hosted in the northern hemisphere, and managed by companies incorporated in Silicon Valley.
We strive to decentralize hosting to strengthen local technical sovereignty. In the meantime, we live in a hybrid world with centralized and decentralized technologies, where people will continue to use WhatsApp and Facebook, with servers hosted in Scandinavia, the United States, and Germany. However, we recommend that States increase their technological sovereignty, because true independence lies not only in representation at the UN, but also in technological autonomy.
Ultimately, what we are proposing to States is to facilitate cooperation systems and grant more sovereignty at the local level, while maintaining certain aspects of governance under the jurisdiction of the nation-state. Micro-managed communities will thus be able to exercise their own sovereignty. This is a potentially more desirable model than remaining technologically dependent on a few countries that dominate the “digital gold” of data and services.
What are the next steps in the project?
I am at the beginning of this journey, a journey that has taken shape in recent months with a clear objective: to deepen my understanding of the themes that are close to my heart. This intellectual journey is not from a year ago, or even six months ago. At the time, I only had fragments of the vision that is now mine; I was discerning how to innovate in finance and envisioning possible changes in law and technology, as well as the impact of my actions on a micro scale. However, it is only recently that I have been able to conceptualize a revolution in the very structure of institutions by merging all these concepts.
The year 2023 was about identifying a starting point and assessing what was achievable and fundable. In these industries, many entrepreneurs solve a tiny part of the problem – the famous “last mile” – without tackling the broken cogs upstream. On the other hand, there are thinkers, philosophers who, although having a deeper understanding, do not know how to implement these ideas or who depend on those who have a greater capacity for execution. My task is to bring together this diverse expertise.
Currently, we have concluded half a dozen mandates that commit us to the creation of special governance zones. This will require substantial resources, so our next step is to find financial partners. These can come from the for-profit or non-profit sector, from governments, or from decentralized networks such as blockchains. We are preparing to capitalize in order to carry out these mandates.
We tackle mandates of varying lengths, some extending over several years, others over decades. We therefore have governance to consider in the short, medium and long terms. Our goal is to create and validate the first use cases once we are well capitalized, by establishing recurring transactional models and cooperating with new actors who will gradually adopt and repeat these patterns.
In 12 or 24 months, we plan to decentralize the network. Instead of centralizing the registration, operation and execution of agreements exclusively within "Tools for the Commons", we will establish a system of validation and execution by consensus on behalf of the network. We will create specialized nodes that will operate the network according to their area of expertise, and these experts will be able to enter into peer-to-peer agreements and register them in the network. Other executive nodes will act in the real world on behalf of the network, thus bringing an executive and judicial dimension to a distributed system.
What resources and skills do you need?
In the short and medium term, I am looking for a variety of resources and skills to enrich my project. Above all, I am looking for specific know-how. All profiles are welcome, particularly those with expertise at the frontier of law, as well as in blockchain technologies, particularly those relating to oracles that connect the real world to blockchain and cross-chain to ensure compatibility between different blockchains. I'm also looking for people who understand digital assets collateralized by real assets, as well as the entanglements of capital markets, especially as they relate to cross-border transactions and public-private partnerships.
My project would greatly benefit from the expertise of anthropologists, artists – art being a crucial element – philosophers, and people who have an understanding of new systems of cooperation, the commons and techno-optimism. I am also looking for collective consciousness-oriented individuals and experts in arbitration, international law, and economics, as I believe these fields provide considerable value.
I seek to attract these talents as advisors, executives, co-founders, investors, both as individuals and legal entities, including philanthropists. It is essential that these individuals are ambitious, optimistic and above all humble. I am speaking particularly to the West, to find people who can understand that new systems of governance must be designed for an imminent world population of 8 to 9 billion people, including nations like India, China , Brazil, Nigeria, Indonesia and Mexico.
I wish to avoid reproducing outdated governance patterns like those established in Berlin in 1884, where global governance was drawn up with a rule. Instead, I aim to build a cooperative system. We aspire to make the most of the Western advances of recent centuries, while integrating current best practices that respond to the realities of a world populated by billions of people, not just a billion Westerners.
I am completely open to suggestions and constructive criticism. Four months ago, I would have been unable to express my ideas with this clarity. And I am convinced that, if I were to make a new presentation in the coming months, it would be even more successful. I recognize that some points could be more developed and that I may have blind spots. It is possible that other systems, which I have not yet discovered, are more effective. This is why I am extremely receptive to good ideas and constructive suggestions.
Anyone who would like to help with this project is warmly welcome. We plan to host events, whether virtual or in-person, to deliver a clear, attractive and engaging message. It would be a pleasure to be able to count on Discernation readers to join us in this collective approach and engage on questions of such importance.
I learned a few things from Hugo, but I see a category fallacy in this presentation.
What do we call "sectors"? We speak about the public, private and solidarity sectors. We see them as distinct because we can differentiate them unambiguously. We can do that by looking at the property regime that form their basis and at their governance. The public sector rests on public property and uses representative democracy. The private sector rests on private property and uses a hierarchical governance model. The solidarity sector uses share property and direct democracy (one member one vote). Their mission is also distinct: public welfare, profit, communal welfare and benefits. Since their fundamentals are different, their economic models are different.
Hugo's proposition for the 4th sector is: "a hybrid of the state, the market, and the nonprofit sector". In other words, the 4th sector would provide the infrastructure to contain a tight coordination of these 3 sectors. In other words, nothing new here... just a composition of these 3 dimensions. But this proposition excludes a reality that is staring at us since the beginning of then Internet, which is p2p, as a distinct mode of production, with its new property regime (nondominium, ex. the Bitcoin network, no one owns but anyone has permissionless access based on some rules baked in the protocol), a meritocratic governance model (skin in the game, computing power in the case of Bitcoin), stigmergy as mechanism of large scale coordination instead of planning and instead of the market. This is an undeniable reality, the Bitcoin network exists, that cannot be explained from the 3 previously dimensions, public, private and cooperative / solidarity. Non of these sectors rests on the nondominiom form of property, non of them heavily rely on stigmergy. So fine, we can set in motion the creation of an infrastructure that binds the public, private and the solidarity sectors together, but no matter how we mix these 3 dimensions together we will never get this forth reality, which is the reality of transparent permissionless networks that can operate outside of the market and beyond the power of the states (transnational), ex. the Bitcoin network. According to this logic, the Bitcoin network must be subdued to the power of the state (it has been designed to escape the influence of the state) and to the market (although people have built a crypto market, the Bitcoin token is valuable because it is uncapturable, not through a relation between supply and demand, since no one can control the supply, the supply does not respond to demand, it's production / supply is not coupled to fluctuations in demand, no monetary policy possible based on the market, i.e. totally decoupled from the market). So by design, Bitcoin has been architectured to escape state influence and market manipulations. Trying to subdue it to the state and the market means essentially trying to destroy it, which is trying to deny its reality, trying to exclude this new reality.
My proposition is to acknowledge this reality and integrate it into society as a 4th sector. Thus, the 4th sector is not the tissue that binds the existing 3 sectors, it is a new sector that lives in parallel with the other 3, under different principles. Semantically speaking, it makes more sense to call this new reality 4th sector, because it refers to a new mode of production distinct from the other 3. It is a category fallacy to call the binding of the 3 a 4th sector, since there is nothing new, just a combination or the existing 3.
For more details on our interpretation of the 4th sector see this doc.
https://docs.google.com/document/d/1RPZzvrLx1yy3_HeTYk7dhxyRnNmIk0O6GRC8zRBqbf4/edit
Thanks Michel for sharing.