DAOs won’t ever work until governance points are resolved | Coin tradition – coin tradition

Decentralized Autonomous Organizations (DAOs) have been hailed as the future of government, enabling a more democratic approach to decision-making. However, decentralizing leadership is not a panacea that immediately improves performance. To maximize the potential of a decentralized organization, weighted voting and tokenomics must be regulated. Some DAOs have already imploded for lack of proper compensation.

What is decentralized governance?

DAOs provide a paradigm for managing a project or company, where voting rights are distributed among all members. Often there is no central authority, just the collective will. This is the case with certain governance arrangements, although it sounds fair in principle.

DAOs with a token-based voting method can be the most problematic of all models. Though designed for decentralization, token-weighted governance that allows individuals with the most tokens to have the largest share of voting power could result in some wealthy players gaining control at the expense of the majority. This totally goes against the idea on which DAOs were founded and grants disproportionate influence to wealthy whales.

This can do more harm than centralization alone; Token-based voting systems can lead to hostile takeovers by DAO token whales and other bad players, as was the case with the Build Finance DAO takeover. In February, the DAO was compromised by an adversary with sufficient funds to pass a proposal that gave them complete control over the project.

This acquisition was perfectly legal due to the token-based governance architecture, leaving developers and the community with no choice but to fork the project and start over. An asset allocation weighted vote is not the best way forward.

How do I solve DAO problems?

The organizational structure of the DAO. Image courtesy of Seth Bannon.

The problem is that asset-weighted voting isn’t optimal for decentralized governance systems, especially if they’re looking to replace existing models. The long-term goal is to run businesses and organizations through a decentralized system that provides each member with a meaningful voice and takes into account what that person contributes. Balancing the equation may require different types of custom, blockchain-enforced IDs, as well as a meritocracy-based voting mechanism.

Imagine a new paradigm in which voting members are evaluated against certain Key Performance Metrics (KPIs). This can include engagement and development indicators within the DAO, and failure to meet these KPIs can reduce or eliminate a user’s voting rights. This strategy would push all units to make decisions that benefit the community, not just themselves.

It can affect virtually every aspect of the platform, such as: B. future technological advances or the allocation of community funds. It can even develop new systems of social organization for philanthropic organizations, environmental groups, and governments that provide motivations beyond financial gain.

NFT communities have already proven to reward activities that benefit the group, such as B. Requiring participants to be “whitelisted” for an NFT drop. It is often successful Web3 Projects to achieve a collaborative, mutually agreed goal, but current leadership structures don’t have that immediate motivation to join. Imagine modern governments where voters vote to elect one person to a position of concentrated authority. Web3 and DAOs show how things work differently through mutual benefit and engagement.

This is just one perspective, but the basic concept remains. Research into new forms of organization is necessary to ensure that decentralized organizations remain incorruptible. There are too many attack vectors damaging key projects. If DAO governance became a global movement and implemented outside of crypto, the issues must be resolved soon.


Share post on

Sonic BTC is reader-supported. When you buy through links on our site, we may earn an affiliate commission.

Is Binance USD (BUSD) Heading within the Proper Route on Sunday?  – Traders Observer Binance

Is Binance USD (BUSD) Heading within the Proper Route on Sunday? – Traders Observer

Binance USD receives a strong long-term technical score of 71 from InvestorsObserver's research based...

By Roger Gofman
Purchase the Large Eyes Token (BIG) to hitch a neighborhood of crypto millionaires like Uniswap and Binance |  – Bitcoinist Binance

Purchase the Large Eyes Token (BIG) to hitch a neighborhood of crypto millionaires like Uniswap and Binance | – Bitcoinist

Current cryptocurrency news and tips are now providing insights into buying the dip as...

By Roger Gofman
Moshnake: Optimizing Binance Sensible Chain to Generate Earnings Unrealized by Main Cryptos Like Chiliz – Tekedia Binance

Moshnake: Optimizing Binance Sensible Chain to Generate Earnings Unrealized by Main Cryptos Like Chiliz – Tekedia

Blockchain technology and virtual mechanism work relatively in hand to generate wealth for users....

By Roger Gofman
World’s Largest Cryptocurrency Change Binance Appoints Ibukun Awosika to International Advisory Board – Legit.ng Binance

World’s Largest Cryptocurrency Change Binance Appoints Ibukun Awosika to International Advisory Board – Legit.ng

The world's largest crypto exchange platform appoints the former first bank director to its...

By Roger Gofman
Analysts Anticipate Flasko (FLSK) to Surge Over 4,000% Whereas Tron (TRX) and Binance Coin (BNB) Underperform – The Coin Republic Binance

Analysts Anticipate Flasko (FLSK) to Surge Over 4,000% Whereas Tron (TRX) and Binance Coin (BNB) Underperform – The Coin Republic

Experts have said that Flasko will bring investors more than 4,000% profit and will...

By Roger Gofman
Binance

How Uniswap Targets Coinbase and Binance – Decrypt

Decrypting DeFi is Decrypt's DeFi email newsletter. (Art: Grant Kempster)The DeFi sector's largest decentralized...

By Roger Gofman
Binance

Tips on how to safe your Binance account with 2FA – MUO – MakeUseOf

You can have your Binance account shredded and wipe out all your money and...

By Roger Gofman
Binance Provides Choose-in Button for 1.2% LUNC Combustion Tax on All Trades – CryptoSlate Binance

Binance Provides Choose-in Button for 1.2% LUNC Combustion Tax on All Trades – CryptoSlate

Binance CEO Changpeng Zhao (CZ) was asked if Binance will ever impose the 1.2%...

By Roger Gofman

Latest Posts

Dot sample [DOT]: Does a drop on this entrance imply a drop on this entrance – AMBCrypto Information Polkadot

Dot sample [DOT]: Does a drop on this entrance imply a drop on this entrance – AMBCrypto Information

Dot pattern, she had one high development activity For quite some time we've been...

By Roger Gofman
WEF Launches Crypto Sustainability Coalition to Use Web3 Applied sciences in Combat In opposition to Local weather Change – Blockchain Bitcoin Information – Bitcoin Information Stellar

WEF Launches Crypto Sustainability Coalition to Use Web3 Applied sciences in Combat In opposition to Local weather Change – Blockchain Bitcoin Information – Bitcoin Information

The World Economic Forum (WEF) created the Crypto Sustainability Coalition, an initiative dedicated to...

By Roger Gofman
Mihai’s Ethereum Venture Replace. The First 12 months. Ethereum

Mihai’s Ethereum Venture Replace. The First 12 months.

Into the ether Hello, fellow Ethereans. I am Mihai Alisie, one of the Ethereum...

By Roger Gofman
Is Binance USD (BUSD) Heading within the Proper Route on Sunday?  – Traders Observer Binance

Is Binance USD (BUSD) Heading within the Proper Route on Sunday? – Traders Observer

Binance USD receives a strong long-term technical score of 71 from InvestorsObserver's research based...

By Roger Gofman
Ethereum co-founder Vitalik Buterin expects Dogecoin and Zcash to maneuver to PoS |  Bitcoinist.com – Bitcoinist Dogecoin

Ethereum co-founder Vitalik Buterin expects Dogecoin and Zcash to maneuver to PoS | Bitcoinist.com – Bitcoinist

Ethereum co-founder Vitalik Buterin believes that other blockchains like Dogecoin and Zcash should follow...

By Roger Gofman
MASSIVE BITCOIN PROBLEM TODAY!!!! [careful now] BITCOIN PRICE PREDICTION 2022 // BITCOIN NEWS TODAY Videos

MASSIVE BITCOIN PROBLEM TODAY!!!! [careful now] BITCOIN PRICE PREDICTION 2022 // BITCOIN NEWS TODAY

Bitcoin News Today - MASSIVE BITCOIN PROBLEM TODAY!!!! [careful now] BITCOIN PRICE PREDICTION 2022...

By Roger Gofman
Cardano Vasil: Charles Hoskinson Talks One other Factor That May Profit Blockchain – U.As we speak Cardano

Cardano Vasil: Charles Hoskinson Talks One other Factor That May Profit Blockchain – U.As we speak

Tomiwabold Olajide Cardano is the third largest blockchain with a staking market cap of...

By Roger Gofman
Ethereum

Ethereum Builders: Ein vorgeschlagenes Experiment

Hallo, liebe Ethereer. Ich bin Mihai Alisie, einer der Gründer von Ethereum, und seit...

By Roger Gofman