On Crypto Governance - a16z crypto

Decentralized governance is at the heart of the ideological foundation of crypto: equal participation for all actors. The playbook of progressive decentralization is being followed by more decentralized finance (DeFi) projects. Users and tokenholders can now have more control over protocol parameters, treasury spending, and, in general, the industr... See more

---------SIGNAL VS NOISE Social governance in DeFi applications is usually coordinated through online forums and Discord channels. Snapshot applications conduct "off-chain" voting before protocol changes are encoded on the blockchain. DeFi governance evolved organically but created a lot of noise because proposals, discussions, and votes spread acr... See more

---------PROTOCOL LEADERSHIP Kain Warwick, Synthetix's former "benevolent dictator," recently explained a problem arising from the decentralized governance of Synthetix. Warwick recalls stepping away from his de facto leadership position and leaving the Spartan Council, a democratically elected body that approved Synthetix protocol changes and was ... See more

Decentralized governance implemented through DAOs encourages open participation in the development of the DeFi industry. By either purchasing or earning governance tokens, actors not only have the opportunity to share in the risk and reward associated with the monetization of a new financial system, but also the incentive to define the economic and... See more