On the Modularization of Decentralized Governance

Quick Take

  • Decision-making in crypto protocols has primarily been done via democratic token voting (with the added ability to delegate to others).
  • Voter apathy and a large concentration of tokens lead to a handful (or even a single) voters being able to push decisions through unilaterally.
  • For functions that are not automatable, protocols are moving towards dedicated teams/committees that are responsible for specific functions. Tooling is being built with that in mind.
What is decentralized governance? Web3 applications — from decentralized finance and compute, to the continued process of blockchain consensus — is all about coordinating different parties, who do not know each other, towards a common goal. The aim can be to run a lending market, asset or derivatives exchange, digital gold, or any other potential […]

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