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Tim Draper Backed Aragon, Disrupts Traditional Governance With A Decentralized Court

This article is more than 4 years old.

"I believe that Bitcoin and crypto will drive most of the commerce of the world," said Silicon Valley venture capitalist Tim Draper to Forbes two years ago. A longtime believer in cryptocurrency, blockchain, and other innovations in governance, such as proposing for a 6 state split of California, Draper has since turned his attention to open-source project Aragon’s decentralized court system.

Draper recently invested $1M worth of ANT tokens, Aragon’s digital token, which will be used in what the company describes as the world’s first “digital jurisdiction” or digital court.

Aragon, founded in 2016 by Luis Cuende and Jorge Izquierdo, aims to “create global, bureaucracy-free organizations, companies, and communities,” with a counting list of 1,000 organizations in its network already.

“Our vision was to create a platform for a new class of organizations which are borderless and global,” Cuende said, while also explaining how Aragon’s blockchain network is open for any organization to join. Early this month, the company announced the launch of Aragon Court, a digital court system with an online dispute resolution service for DAOs (decentralized autonomous organizations).

“With everything living on the Internet, everyone has their own rules,” Cuende explained on the creation of Aragon Court. “There’s no single jurisdiction to work on and they [organizations] can't solve disputes in a traditional court,” speaking on the rise of fully digital, online companies. “The reason we launched our own court is so these organizations can solve their problems all online.”

The network’s ANT governance token must be converted into Aragon Court’s native ANJ token, used by jurors, before handling disputes. Separating the two tokens was important to distinguish use in the network and use in court, providing incentive in both spaces. In “digital court”, subjective disputes are handled just as in a traditional court system with human judgement, except here jurors scroll in their dashboard and vote, thus completing actions to earn ANJ.

“Disputes now have evidence fully seen online, from social media posts to crypto transactions,” Cuende said of the switch from the traditional, in-person court cases towards one fully online and digital. Most organizations on Aragon now are crypto-related with online communities, Cuende confirmed, with the room to open up towards other industries.

Voting in this nature isn't new territory. In fact, blockchain-based voting has been criticized as of late, particularly with Voatz, which aims to resolve absentee ballot issues in elections.

A team of MIT engineers recently published a research report on the app deciding the app is too risky. "We join other researchers in remaining skeptical of the security provided by blockchain-based solutions to voting, and believe that this serves as an object lesson in security — that the purported use of a series of tools does not indicate that a solution provides any real guarantees of security," the team explained on its findings.

Having invested in Cuende’s previous startup, Stampery, when he was just 19, Draper’s initial $1M investment in ANT tokens is now worth $1.2M, the founder confirmed. With Draper now owning the majority of all Aragon tokens, will this affect his ability to vote in the network? One person being able to exercise all influence may undercut Aragon's message but it is ultimately unavoidable until more people follow suit.

“He’s [Draper] fascinated with governance,” Cuende said of Draper’s backing while also relaying his belief in what Aragon has built. Draper has also previously invested early-on in companies such as Tesla, SpaceX, and Theranos.

Aragon’s next plan is building its own blockchain, Aragon Chain, aimed to launch by the end of 2020. “I think by having our own blockchain will enable us to subsidize contracts cheaper,” while also serving different purposes, Cuende noted. Aragon is now powered on Ethereum.

Disruption in the world of governance now has the belief and backing of a prominent venture capitalist, focused on innovation, as seen with Aragon’s decentralized court system. Yet, it ultimately might take more like-minded believers like Draper for decentralized court systems to be used in governance around the world. “Bitcoin commoditized and eroded monopolies of currency,” Cuende concluded, “we are trying to do the same for governance.”

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