The term "network state" is from a book by Balaji Srinivasan called "The Network State: How To Start a New Country".
A network state is a social network with a moral innovation, a sense of national consciousness, a recognized founder, a capacity for collective action, an in-person level of civility, an integrated cryptocurrency, a consensual government limited by a social smart contract, an archipelago of crowdfunded physical territories, a virtual capital, and an on-chain census that proves a large enough population, income, and real-estate footprint to attain a measure of diplomatic recognition.
Countries and nations in today's world were built over centuries with collective governance and technological innovation. Broadly speaking, what makes a nation established and capable are its people. Without a collective group of people working towards a common goal, the nation wouldn't gain global recognition and power. The nation's citizens are the foundation to how that nation runs and creates impact throughout the world through their behaviors and actions. This general way of thinking can also be applied to how online communities can be built over time to not just be a platform for people with similar interests but to also allow for collective action in the real world.
My approach to turning an online "startup society" into a "network state" would be to first start off with the most important aspect of any nation: citizenship. In the real world, a nation's citizenship allows a person to receive benefits, vote on various propositions, and etc. Overall, citizenship is the base foundation to the development of a nation. The DAOCitizenship.sol contract serves as a token contract that represents the DAO's citizenship. It is similar to an ERC-20 token contract except that it tracks the registration date (mint date) of a citizen and it is non-transferable (similar to how real citizenships are non-transferable). However, citizenships can be destroyed if the citizen were to allow it. The process of obtaining the DAO's citizenship is from the NetworkStateDAO.sol contract and could require a payment of the DAO's native token plus any other requirements to make admissions a bit more selective so getting a citizenship is not purely related to having money alone.
Now, with the base citizenship, the next most important aspect of a nation would be governance. Most of crypto governance is done by coin-based governance which basically means that the token holders have influence on any changes to the protocol or project. However, this puts most of the governance power in the hands of the largest token holders. Therefore, instead of a coin-based governance system, I have decided to implement a simple democratic voting system where each person's vote is the same weight as any of the others. The Ballot.sol contract serves as a simple governance contract that allows people to create and vote on proposals. The only requirement to creating and voting on proposals is the possession of the DAO's citizenship for at least half a year (time frame can be adjusted). Similar to how people in the US can vote based on US citizenship (plus age, residency, and identification requirements), the DAO's citizens can also vote based on how long they had a citizenship for. Other factors can also be added to make voting requirements stricter, but for simplicity, only a citizenship for at least half a year should suffice in this example to show basic functionality.
With both the citizenship and governance contracts implemented, the actual DAO contract can now be created. To give a general smart contract outline for this proof of concept, I decided to implement contract inheritance to better understand how everything fits in together.
Citizenship.sol ---> Ballot.sol ---> NetworkStateDAO.sol
Starting from most base-like to most derived, Citizenship.sol would be the most base contract that would serve as a foundation for the network state DAO. To interact and be part of the community, one would need the DAO's citizenship. Ballot.sol would then be the second most base contract with NetworkStateDAO.sol being the most derived contract. Looking at this proof of concept in this lens allowed me to visualize how a nation could possibly be built with an integrated cryptocurrency. The NetworkStateDAO.sol contract also comes with basic crowdfunding abilities for any citizen create fundraising campaigns for various purposes such as for crowdfunding physical territories in the real world. For contributing to campaigns, anybody regardless of citizenship can contribute ETH (could adjust to make contributions in the native DAO token). However, one could also put citizenship restrictions to this, but for simplicity, I decided to let anybody contribute to think of fundraising campaigns as a type of "foreign direct investment" in the DAO.
This proof of concept shows my take on how a "network state" can be created. Just like how every nation has different ways of governance and business, future network states can also differ in those aspects. Nonetheless, I believe that the power of social networks and communities can realized through blockchain technology and cryptocurrencies. By using new emerging technologies and fundamental theories, people can create and innovate on top of existing resources.
This proof of concept is not production ready. Citizenship, governance, and crowdfunding only provide basic functionalities and should be modified. One addition to this project would be to add a native DAO token that can have different utilities depending on what the DAO community's shared goals are. Overall, any online community with a shared interest can possibly form a network state that represents their social network with added value.