This post is an Overview and response to DFINITY economist, Yulin Liu’s, medium post “Glimpse of Blockchain Governance” It contains my own comments, criticisms, and key takeaways… I enjoyed Yulin’s article and you can find the medium post below.
A shift from off-chain to on-chain governance is underway. We are seeing this through the growth of Proof of Stake Blockchains with on chain governance.
On-Chain governance is more aligned with the “decentralized ethos” as everyone in network has a vote… with off-Chain governance however, the core developers and full node providers have much more power than ordinary users.
So rather then endless debates on community forums to have something upgraded or implemented with an off-chain governance. In a PoS blockchain, the voting and rules are predefined and made automatically.
Architecture of On-Chain Governance
Proposals require a collateral stake to prevent spamming. High quality proposals are rewarded and spam proposals penalized.
The more tokens that get behind a proposal, the quicker it will be addressed.
Create a weighted voting system that incentivizes members to stake their tokens. Give more voting weight to members staking long term (e.g: a person with 10 tokens locked for a year would have more voting right then someone with 50 tokens but not staked) This gives chances for all community members to have their voice heard, rather then just a few large whales and also incentivizes members to stake there tokens, and in my opinion would create a higher demand and ultimately push price upwards. This price movement could attract more speculators and enthusiasts and we can see Network Effects takeover.
Vote Delegation : Sometimes a particular area is just not your area of expertise and you may have a thought leader you trust. You can delegate your votes to the person of your choice.
Random voting body : rather then having entire network voting on each issue. Then take a random segment of the network to vote on the issue. Randomness is CRUCIAL here. My assumption is that this is where threshold relay will come into play as well. True randomness in the network for low costs.
Zero Knowledge Proofs : Anyone that knows me, knows I’m a huge proponent of ZKP. When I saw Jens Groth joined the DFINITY team, I was beyond excited. So, with zero knowledge proofs, you can have registered users that gain more voting power. But thanks to ZKP, the user’s private data is ensured safe, preserved, and secure. I am greatly behind this implementation in the networks.
Criticisms
Obviously in the beginning a central organization needs to bootstrap the network and get it kicked off. But how do you sufficiently decentralize it over time. How do you prevent an organization/entity to keeping just the right number of tokens so that they will always have the necessary voting power to make whatever upgrades they choose? How do you prevent a decentralized entity from only giving the illusion of being decentralized?
