DAOs must neutralize whales (and more) if they want better governance
Decentralized autonomous organizations would benefit from greater checks and balances that prevent influential minorities from taking control.
Opinion
Over the past few years, Decentralized Autonomous Organizations (DAOs) have introduced a clear paradigm shift in blockchain governance. With their communal decision-making and adherence to hard-coded rules, they have challenged the role of hierarchy and central authority that is present in modern organizations, especially when it comes to business. Ideologically, DAOs have much in common with democracies: individuals holding a specific token amount of a DAO can allocate those tokens as votes on governance proposals. After the voting is complete, the final result is executed autonomously by smart contracts.
In functioning democracies, however, citizens elect representatives to legislate laws and govern society, and periodic elections and an independent judiciary help ensure that elected leaders work honestly in the common interest. DAOs, especially those that also operate as business entities, often fail to implement and practice these checks and balances. As a result, many retain centralized or minority control, limit the scope of decisions in which community members have a say, or suffer from uninformed and disorganized voting practices.
Problems with DAOsThe problems with DAOs start with the fact that tokens are required to participate in the voting procedures of a DAO. This means that wealthier individuals have the ability to buy more tokens and therefore exert more influence over the voting results. This type of token-based selective enfranchisement can lead to skewed voting results that may not be beneficial to the community as a whole.
While some early adopters may join DAOs based on collective interests and long-term goals, there are inevitably investors who adhere strictly to make quick profits without worrying about sustainability and sustainability. future of a project. Given the intrinsic importance of tradable governance tokens to a DAO's operations, it can be difficult to align financial incentives and community interests in a way that maximizes a project's growth potential with longer periods.
Related:...
Decentralized autonomous organizations would benefit from greater checks and balances that prevent influential minorities from taking control.
Opinion
Over the past few years, Decentralized Autonomous Organizations (DAOs) have introduced a clear paradigm shift in blockchain governance. With their communal decision-making and adherence to hard-coded rules, they have challenged the role of hierarchy and central authority that is present in modern organizations, especially when it comes to business. Ideologically, DAOs have much in common with democracies: individuals holding a specific token amount of a DAO can allocate those tokens as votes on governance proposals. After the voting is complete, the final result is executed autonomously by smart contracts.
In functioning democracies, however, citizens elect representatives to legislate laws and govern society, and periodic elections and an independent judiciary help ensure that elected leaders work honestly in the common interest. DAOs, especially those that also operate as business entities, often fail to implement and practice these checks and balances. As a result, many retain centralized or minority control, limit the scope of decisions in which community members have a say, or suffer from uninformed and disorganized voting practices.
Problems with DAOsThe problems with DAOs start with the fact that tokens are required to participate in the voting procedures of a DAO. This means that wealthier individuals have the ability to buy more tokens and therefore exert more influence over the voting results. This type of token-based selective enfranchisement can lead to skewed voting results that may not be beneficial to the community as a whole.
While some early adopters may join DAOs based on collective interests and long-term goals, there are inevitably investors who adhere strictly to make quick profits without worrying about sustainability and sustainability. future of a project. Given the intrinsic importance of tradable governance tokens to a DAO's operations, it can be difficult to align financial incentives and community interests in a way that maximizes a project's growth potential with longer periods.
Related:...
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