[CMCPlaybook] jump_ believes that governance solutions should not be one-size-fits-all but instead specialized to particular protocols’ needs. Here's a proposed framework for the decentralization of protocol governance. Will 2023 be its glory year? 💪
to mitigate it. There are identity solutions, which link crypto wallets to the individuals behind them; friction solutions, which make Sybil attacks costly to execute; and challenge solutions, which incentivize participants to police the protocol. We give examples of each approach in our piece linked above.
DAOs should consider the choice of voting mechanisms as just one tool in a broader toolkit to counter one-token-one-vote dynamics. Other levers can also be pulled. For instance, protocols can distinguish classes of tokens so that certain tokens are eligible for greater yields but cannot be used to participate in governance. This could incentivize whales to draw down their reserves of governance tokens in favor of holding a tranche of tokens with higher monetary rewards.
. One example is to lock up tokens of holders who vote in favor of a proposal until that proposal is implemented. Protocols should be willing to compose these ideas and others in order to meet their own governance needs in light of any observed points of centralization.Governance in blue-chip crypto protocols is fairly stale, and DAOs have converged on similar mechanisms. We believe that governance solutions should not be one-size-fits-all but instead specialized to particular protocols’ needs.
At Jump Crypto, we believe the rapid innovation and experimentation that characterizes the crypto landscape should play a role in protocol governance. After all, centralized governance might help protocols survive their initial cold start problems, but true decentralized governance is a crucial feature to ensure that they do not ossify. Protocols should be sensitive to their governance needs and ensure that they are availing themselves of all options to enable healthy decentralized governance.
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