The Blockchain: An Experiment in Governance Without Power
Bitcoin’s unique ecosystem of peers and stakeholders stands in stark contrast to most other human organizations. The voting public is accustomed to issues being settled by aggregated winner-take-all votes, and executive edicts enforced by the state. Meanwhile in the corporate world, directives are issued down a hierarchy, and those who do not comply with them are ultimately fired. But the same rules and attitudes do not define the governance of blockchain ecosystems. According to conventional political ideas a decentralized and wholly voluntary system of governance should not be possible,....
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Governance has long been one of the most-hyped applications for blockchain technology. However, there's often little clarity about what "governance" means in this context. The term is used to encompass applications ranging from secure online voting, to new forms of political governance, to flawed experiments in decentralized investment funds. First, we need to be clear about what we mean by "governance". Most often the term brings to mind political governance. The institutions that, according to a system of rules and laws, make up our various levels of government.....
Governance tokens allow users the opportunity to take on a more active role in managing decentralized projects. Governance tokens are a type of cryptocurrency that allow tokenholders to vote on the direction of a blockchain project. The primary purpose of governance tokens is to decentralize decision-making and to give holders a say in how the project is run.Governance tokenholders are usually more invested in the project’s success as they stand to gain or lose more, depending on the outcome. Community members can use tokens to influence the direction and features of a blockchain protocol....
The central bank of the Netherlands is preparing an ambitious experiment aimed at discerning if an entire financial market can be built on a blockchain. While many so-called smart contract applications of blockchains can be replicated using existing technology, the man in charge of a series of experiments conducted by De Nederlandsche Bank says the distributed nature of blockchains could lead to entirely re-imagined financial market infrastructures (FMIs), ones that are much more difficult to hack. Like the bitcoin network itself, the experiment envisions how an FMI's internal operations....
Dharma’s Uniswap governance proposal risks giving it too much power, according to critics in the community. Decentralized exchange Uniswap is currently undergoing its first governance vote, which was submitted by open-source lending protocol Dharma. But a number of community members have raised concerns that if successful, the proposal will hand Dharma too much control over the future direction of Uniswap.The proposal, for which voting ends on October 19, suggests a reduction in token governance and quorum thresholds. This potentially gives the top holders — of which Dharma is one —....
Vitalik Buterin wrote that supporting DAOs with transferable governance tokens is contradictory and enables the power-hungry. The governance discussion intensifies as decentralized autonomous organizations (DAOs) become more popular in the blockchain space. The dilemma between giving power to a specific few and the freedom to voluntarily delegate decision power was highlighted in a Twitter thread created by Ethereum (ETH) founder Vitalik Buterin. In a tweet, Buterin brought up an old adage pointing out that power-hungry individuals are not suitable to lead. The Ethereum founder highlighted....