Starting from the theory of the "veil of ignorance," how can Web3 be used to create a fairer internet?

Authors: Li Jin, Katie Parrott

Original Title: “Web3 Is Our Chance to Make a Better Internet”

Translated by: MK, Chain Catcher

Abstract: Web3 represents an opportunity to reimagine the internet and rebuild platforms based on entirely new principles. But to do this, we need to reach a consensus on what these principles are and why they matter. The thought experiment of the "veil of ignorance," proposed by social and political philosopher John Rawls in his seminal 1971 work "A Theory of Justice," serves as a fitting exercise as we set out to build a new internet and design new economies. Rawls' principles of justice encourage us to approach this issue as if we do not know our position in society: which family we were born into, how much wealth we have, and so on. Lacking such knowledge, builders are more likely to design institutions rooted in fairness and consideration for all.

One of the most compelling arguments surrounding Web3 (a decentralized, blockchain-based internet ecosystem owned and operated by users) is that it is a movement toward a better, fairer internet. Specifically, proponents of Web3 envision an internet where users can reclaim power from a few centralized entities that exploit user data, and where everyone with internet access can participate in a fair competitive environment.

However, Web2, the current era of the internet defined by companies built on proprietary data (like Facebook and Google), also began with similar promises of empowering individual creators and eliminating intermediaries—promises that have not been fulfilled. Now, standing on the brink of a new era, we should ask ourselves: Has the third generation of the web truly democratized opportunity? If not, how can we better design platforms and governance systems to promote fairness?

The thought experiment known as the "veil of ignorance," proposed by social and political philosopher John Rawls in his seminal 1971 work "A Theory of Justice," provides a useful framework for these questions. Rawls argues that when laying the groundwork for an ideal society, we should imagine ourselves not knowing our position within it; that is, we should don the veil of ignorance. A just society is one "that you would be willing to enter anywhere if you knew it intimately," Rawls adds.

One of the fundamental features of this situation is that no one knows their position in society, their class status or social standing, nor does anyone know their wealth in the distribution of natural assets and abilities, their intelligence, strength, and so on. I would even posit that all parties involved are unaware of their concept of the good or their particular psychological tendencies.

Rawls' thought experiment is particularly relevant today because we are indeed at the kind of inflection point that the veil of ignorance imagines. Web3 offers an opportunity to build an entirely new internet from the ground up—indeed, an entirely new economic system. So the question arises: What kind of internet should we create?

Some may argue that Web3 is still young and that these questions will resolve themselves over time. However, the issues of impact and externalities were set aside too late in the design of Web2, resulting in consequences ranging from election manipulation to widespread vaccine misinformation. Some indicators suggest that early design choices in Web3 are replicating or exacerbating inequalities seen in Web2 and the real world.

If we want Web3 to fulfill its promise of materially improving the conditions of everyone in the ecosystem, not just a select few at the top, we need to design it according to principles that can achieve this goal.

How do we determine what is fair?

For centuries, philosophers and thinkers have debated how to optimally allocate resources among social participants. The body of thought dedicated to answering these questions is known as "distributive justice," within which there are various schools of thought:

• Strict egalitarians argue that the only just system is one in which resources are distributed absolutely equally; in other words, everyone should have the same amount of material goods. This principle is rooted in the belief that everyone is morally equal and therefore should have equal opportunities to access goods and services.
• Luck egalitarians believe that what matters is the equality of starting positions, and any inequalities that arise thereafter are justified by differences in merit.
• Libertarians argue that individual freedom should be the sole consideration, and any efforts to redistribute resources infringe upon this freedom.
• Utilitarians contend that the most just system is one that maximizes the total happiness and well-being of all participants. According to utilitarianism, wealth redistribution is desirable because each additional dollar has a greater impact on improving the welfare of the poor than that of the rich.

What these theories of justice have in common is the tension between two equally important but often opposing values: freedom and equality. A society in which all actors are completely free may lead to significant inequalities, as individuals have different motivations to pursue wealth and will act in ways that promote their own interests. Conversely, a society that is entirely equal may suppress freedom, as individuals cannot act in ways that lead to their inequality with others—even if such inequality is "earned" through hard work or skill.

Rawls employs the reasoning of the veil of ignorance to propose his own theory of distributive justice, known as "justice as fairness." It has two parts: the principle of maximum equal liberty and the difference principle. The maximum equal liberty principle grants all citizens the greatest degree of equal rights and freedoms compatible with the same rights for others. Justice requires that everyone enjoys equal rights.

The difference principle states that any social or economic inequalities that exist in society must meet two conditions. First, they must be "attached to offices and positions open to all under conditions of fair equality of opportunity." Social positions, such as jobs, should be open to everyone and allocated based on merit. In other words, an individual's prospects for success should reflect their level of talent and willingness to use it, rather than their social class or background. Second, any inequalities that do exist should benefit the least advantaged members of society the most. This is a profound principle. Thus, it is acceptable for a doctor to earn more than a janitor because this difference in compensation incentivizes doctors to pursue their careers and ensures that janitors (and everyone else) receive high-quality care when they are sick.

Rawls' theory is nuanced, but in short, it is unique in addressing the core tension between the competing demands of freedom and equality. By requiring that inequalities benefit those who are worst off, Rawls establishes a natural corrective to rampant inequalities that would otherwise arise in a system that places freedom above all else.

This balance between freedom and equality makes Rawls' theory a compelling philosophical framework for the internet. It leaves space for builders to be rewarded for their contributions, which is necessary to incentivize smart, ambitious individuals to build within the ecosystem. At the same time, it imposes a burden on these builders and the entire ecosystem to ensure that their ways of building create opportunities for participants who are less advantaged.

Assessing the Current Internet According to "Justice as Fairness"

To what extent does the current internet adhere to Rawls' principles? In many ways, the Web2 internet has expanded and enhanced opportunities for a vast number of people, bringing it closer to Rawls' difference principle compared to the world before the internet. Before the internet, opportunities to participate in various industries were limited by a few gatekeepers, from movie studios to music companies. The internet and social media platforms have made it possible for anyone to engage in content creation and dissemination, thereby enabling more creators to succeed.

However, one does not have to look far for evidence that the Web2 internet has fallen short in other respects. A few examples illustrate how Web2 platforms suppress equality and violate the difference principle. Gig economy platforms have generated billions in revenue while frontline workers providing services earn meager wages and are excluded from decisions that affect their lives. Social media companies and media platforms earn billions in advertising revenue through algorithms that elevate misinformation, harming vulnerable communities. Creator funds on platforms often reward creators with the most views and engagement, leading to income concentration among those who already have ample revenue sources, while failing to expand opportunities for aspiring creators from impoverished backgrounds. We have previously written that the original sin of the internet is its failure to support payment, leading to the extractive, ad-based business models that define the Web2 economy today.

However, it is not only Web2 platforms that fall short of Rawls' standards of justice. The current form of Web3 is also exacerbating inequalities. Web3 projects often issue crypto tokens as digital representations of value. Early versions of token distribution have led to unsustainable dynamics where speculators are rewarded rather than those who add consistent value to the network through actual use. Some Play-To-Earn games have implemented a dual token system, where users earn income rather than governance rights, creating the risk of replicating current economic dynamics where workers earn wages rather than equity, exacerbating wealth inequality. Business writer Evan Armstrong points out that some current NFT projects resemble multi-level marketing schemes, where later entrants into the ecosystem are structurally unable to achieve the same level of success as early adopters due to system design.

How to Ensure Justice as Fairness in Web3

We have seen that both the Web2 internet and early iterations of Web3 have failed to ensure a free and fair competitive environment that benefits the most vulnerable. So what would an internet that meets Rawls' standards look like? Some universal counter-principles begin to emerge:

• Do not build a system that only benefits the wealthy, because what if you are poor?
• Do not build a system that overly favors newcomers, because what if you are not embedded in a network that allows you to gain knowledge early on?
• Do not build a system that requires extreme technical proficiency to succeed, because what if you lack the ability or resources to learn those skills?

Guided by these counter-principles, builders and participants in the Web3 ecosystem can do three things to ensure it aligns with Rawls' ideals of liberty, equality, and the difference principle. First, promote self-determination and agency. Second, reward participation, not just capital. Third, incorporate initiatives that benefit marginalized groups.

Promote self-determination and agency. One of the main principles of Web3 is the idea of self-determination: unlike Web2 platforms, Web3 communities will be controlled by their members rather than a team of founders, executives, and shareholders holding all the power. This aligns with economist Albert O. Hirschman's "exit-voice-loyalty" model, which describes the choices individuals have when faced with dissatisfaction from organizations and states. Ideally, on Web3 platforms, users can express their concerns, attempt to change their circumstances; exit to new platforms; or, out of loyalty, wait for the situation to improve.

But today's reality is more complex. Early governance structures have largely adopted token-weighted voting, resulting in oligarchic rule that is not much different from the boards they seek to correct. Whether in a boardroom or in the Discord channels of decentralized autonomous organizations (DAOs), the problem of oligarchy is that those in power may cater to their own interests.

As a first step to aligning the future of Web3 with Rawls' principles of justice, participants and builders in the Web3 ecosystem need to advocate for democratic governance systems that give all members a voice, not just a select few. Everyone should have equal rights in the systems they participate in.

There are several governance systems that can combat oligarchy, such as:

• Reputation governance: granting greater governance power to those with high reputation value.
• Delegation: enabling community members to nominate others to vote on their behalf.
• Pods/subDAOs: smaller groups within an organization whose governance can be limited to their scope of tasks.

An example of a project that purposefully diversifies its member base is the $WRITE token airdrop by Mirror, which requires registering a custom subdomain on the platform and participating in governance in the future. To expand the user base that can influence governance, the token distribution is based on an algorithm designed to maximize diverse social clusters. According to Mirror, this airdrop "further democratizes the selection process and expands the entry criteria… the expansion of the Mirror community will be determined by those who have been most indispensable in shaping it thus far."

In addition to the importance of voice—the ability for people to change a system from within through governance—participants also need a viable exit route. Web2 platforms coerce user loyalty through network effects and closed data, making it difficult for creators to reach their audiences or content if they exit the platform. Web3 offers an opportunity to build systems that promote user agency and self-determination through true digital ownership, open data, and networks built on open-source software.

Reward participation, not just capital. A core philosophical principle of Web3 is that there are more ways to provide value to the ecosystem than through capital. Furthermore, value should be something that can be earned, not just purchased.

This is in stark contrast to existing structures, where those with capital earn income through investments that exceed what people earn through work—leading to a widening wealth gap over time.

Allocating ownership to participants is also a significant shift, as existing platforms are built by employees and investors, where meaningful ownership belongs to employees and investors but excludes users whose content and contributions make these platforms valuable.

An important step in aligning Web3 with principles of justice is ensuring that everyone is in an equal position and can gain power or rewards through their merits and contributions. The current reality is that those within the right knowledge networks can use strategies like creating multiple accounts (known as "witch attacks") to gain additional token airdrops, compounding their wealth. While early token distributions often anomalously incentivized short-term profit-seeking behavior—such as participating in yield farming and then exiting days later for higher returns—there is an opportunity to iterate and improve this process to support the long-term retention and sustainability of the network. One method is to make it possible to earn ownership through continued participation in the network, not just capital investment. Projects working to expand ownership include RabbitHole, Layer3, Gitcoin, BanklessDAO, and FWB.

Incorporate initiatives that benefit marginalized groups. The foundation of the difference principle is that inequality itself is not a bad thing. Given equal opportunities for fairness, inequality is still a natural result of people's abilities and their desire and effort to earn. However, when inequalities do arise, do these arrangements benefit the most disadvantaged members of society?

This is a challenging principle to apply in a technological context. But consider this thought exercise: do the current social network feed algorithms promote content that maximizes the benefits for the least affluent? For platforms that pay content creators, the creator funds are predicated on views and engagement. Does this unequal compensation maximize benefits for the least affluent among users? The answer is likely no. While top creators have numerous ways to monetize, regardless of how creator funds are compensated, they can sustain their output, while the least affluent may not even participate in content creation due to economic constraints.

The difference principle will be particularly important for the democratization of Web3, as participants will enter the ecosystem at different times, with a wide range of backgrounds, incomes, technical fluency, and access. Many projects are already leveraging crypto to maximize the well-being of the poorest populations. For example, SuperHi is a for-profit creative education platform that plans to decentralize ownership to its members and instructors, testing a basic income scheme aimed at expanding opportunities in creative careers. Projects like Proof of Humanity and ImpactMarket seek to use blockchain technology as a foundation to provide basic income to those in need. Communities like LaborDAO are leveraging building blocks to establish worker power, while others like she256, We3, and Komorebi Collective focus on increasing diversity in the blockchain space.

In addition to projects that have social good as an explicit mission, all Web3 networks should be incentivized to adhere to the difference principle and maximize benefits for the poorest, as this approach can attract new participants, driving further network effects.

A fair and just internet is possible

Web3 offers the opportunity for meaningful course correction—a chance to reimagine the internet and build new platforms from first principles. But to do this, we need to reach a consensus on what these principles should be and why they matter. Rawls' principles of justice provide a useful starting point. Without fully knowing our positions, our goal should be to design new systems rooted in fairness and consideration for all.