A Path to Decentralization

Thu Oct 11 2018
Ryan & Muneeb

Blog / A Path to Decentralization


A Path to Decentralization

At Blockstack, we are building a new network for decentralized apps. Decentralized apps developed using our open-source developer platform store data with the user without centralized databases or servers, and our decentralized network aims not to have any single points of failure or control. What we are building does not look like a platform backed by a single company, but a decentralized ecosystem; this is a new type of enterprise with no blueprint.

The next big challenge for projects like Blockstack, that started with a single corporation, pertains to corporate governance. The Blockstack network and blockchain uses open-source software and has an open membership and consensus mechanism. The network is decentralized by design, and what we are laying out here in this post is our plan for decentralization of corporate governance.

We’ve thought hard about corporate structures before, such as in 2017 when we raised ~$50M as part of our token offering we decided to start a new practice for token sales—we self-imposed milestones on the project for investor protection, where the investors could receive a refund of up to 80% of their investment if we do not build the technology and successfully deploy it. The legal framework we used was not straight-forward, but it gave us the properties (compliance with applicable law, investor protections, etc.) that we were looking for.

We’re determined to forge new paths and put in place governance structures that accomplish the goal of a robust and decentralized ecosystem. This won’t happen in one fell swoop, but rather over time, through careful consideration and execution.

Today, we’re excited to unveil our initial steps on the path towards decentralized governance with the following announcements:

Non-profit Foundation: We intend to assist in the forming of a non-profit foundation dedicated to supporting fundamental digital rights and ensuring that core internet infrastructure remains decentralized. We are currently in discussions around the form and structure of this Foundation, but we anticipate that Patrick Stanley, Head of Growth at Blockstack PBC, will serve as the interim-head of this foundation for a year while he starts the executive search for a Chairman. We anticipate that the Foundation will not share any directors or officers with other entities.

Independent US entity: Ryan Shea, co-founder of Blockstack, will be leaving Blockstack PBC to form a new US entity. Ryan will remain in the Blockstack community, will continue contributing to Blockstack, and will make an announcement about the new entity he is starting in the coming months.

Independent Hong Kong entity: Larry Salibra, an early Blockstack engineer based in Hong Kong, has informed us that he intends to form an independent entity focusing on a new stand-alone browser (different from the current Blockstack browser which installs as a browser add-on). Larry’s deep experience with the technical side of Blockstack and the Blockstack community, along with his background in product development, make him a great fit to lead this entity.

Blockstack PBC: Muneeb Ali, co-founder of Blockstack, will continue to lead Blockstack PBC and will mainly focus Blockstack PBC’s activities on the developer platform, the Stacks blockchain, and regulatory compliance. Over the next two years, Blockstack PBC will identify other responsibilities that can be handed over to independent entities to further decentralize the ecosystem.

Signature Fund: Blockstack PBC founded its Signature Fund to support exciting startups in the Blockstack ecosystem. We’re excited to announce that Signature Fund I has made investments in 8 startups building decentralized apps and protocols. These include Afari, Casa, CoinTracker, and others, and you can read more details on these investments here. While the Signature Fund is currently structured as a wholly owned subsidiary of Blockstack PBC, we plan to reduce the role that Blockstack PBC plays in any future funds, e.g., by potentially allowing third parties to invest in new funds we sponsor.

Our goal with all the above entities is to not have any overlap in control and to ensure that each entity can have its independent management and voice. The upcoming Stacks blockchain connects the entire ecosystem with individuals and entities having a shared interest in the success of the ecosystem.

Decentralization is not a binary step. It is a journey that needs to be carefully planned and executed. The announcements we’re making today are just the initial steps. It will take years to build a healthy ecosystem where no single party has too much control of the network, where users are not dependent on any single entity for software development, and where no entity can be considered an issuer of the tokens used on the network.

The path to decentralization will be a long journey, but it’s an essential one if Blockstack is to grow to its potential as a new network that preserves digital rights. The journey can have some entities coordinating early on as leaders, but it will be completed when leaders are no longer needed.

— Muneeb & Ryan


This blog post contains “forward-looking statements” including statements regarding Blockstack PBC’s plans for decentralization of the governance of its network for decentralized applications. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially, and reported results should not be considered as an indication of future performance. Potential risks and uncertainties that could change our actual results include, but are not limited to, risks associated with: costs and uncertainties associated with structuring and creating new independent entities; Blockstack PBC’s dependence on the third parties who will have control over these entities to manage them in a manner that benefits Blockstack’s network; the success, cost, and timing of investments made by the Signature Fund; and demand for the decentralized applications that are intending to use Blockstack’s network. These forward-looking statements speak only as of the date hereof. Blockstack PBC disclaims any obligation to update these forward-looking statements.