Blockchain Governance

From P2P Foundation
Jump to navigation Jump to search


Definition

Lanre Ige:

“How public communities and key stakeholders arrive at collective action specifically with respect to protocol change.“ (https://medium.com/mosaic-network-blog/is-plutocratic-on-chain-governance-really-a-bad-thing-68132700205c)


Typology

Off-chain Governance VS On-chain Governance

Lanre Ige :

"Conversations around blockchain governance tend to distinguish between two kinds: Off-Chain Governance and On-Chain Governance.

Off-chain Governance: A governance process whereby decision-making takes place on a social level (off-chain) and then, afterwards, is acted on by developers who encode it into the blockchain protocol. Examples include Bitcoin and Ethereum.

On-chain Governance: A governance process whereby rules, voting, and choices are hardcoded (on-chain) into the blockchain protocol. Examples include Tezos and EOS. Voting in a democratic system relies on a “one person, one vote” system. On-chain governance, on the other hand, is often considered plutocratic because of the way voting is carried out. The on-chain voting systems rely on the number of native tokens (corresponding to the protocol being governed) that a given address holds.

A generic on-chain voting system would employ a “one token, one vote” policy or some derivation thereof (quadratic voting, etc.). These ‘one token, one vote’ systems often suffice given that there are no current decentralized identity systems which allows for ‘one person, one vote’ on-chain voting. On-chain voting systems, however, often have much more complexity than simply being ‘one token, one vote’. Holding tokens does not always directly entitle individuals to a vote: users often must take some kind of action such as: the staking of the tokens; the ‘buying of ticket’, as in the case of Decred: or holding a certain threshold of token, as is the case with DASH and masternode governance." (https://medium.com/mosaic-network-blog/is-plutocratic-on-chain-governance-really-a-bad-thing-68132700205c)


Protocol-level versus application-level governance

Lanre Ige:

"One must also distinguish between two kinds of blockchain-based governance: protocol- and application-level governance.

I) Protocol-level governance – this is governance over changes to a given blockchain protocol such as Ethereum or Bitcoin. This type of governance has historically been off-chain, but there have been more recent efforts at on-chain protocol-level governance.

II) Application-level governance – this relates to the inner workings of blockchain-based applications. For example, users being able to vote for the content they see on a decentralized video sharing application, or the voting mechanisms of a Token-Curated Registry.

It is useful to draw the distinction since both of the negative accusations of on-chain voting as ‘plutocratic’ (as well as the assumption that plutocratic governance is bad) most often hold on the protocol-level, but not necessarily for the application-level." (https://medium.com/mosaic-network-blog/is-plutocratic-on-chain-governance-really-a-bad-thing-68132700205c)

More information