The Votes Are In
It’s not simply crypto governance that’s messy. The debacle within the Iowa presidential caucuses final evening revealed the difficulties of coordinating votes in any democratic system.
Even the freest, most well-established, and highest-stakes voting protocols can typically falter. And that’s assuming you agree with their design within the first place (see: the electoral school). Perhaps you may’t envision a future the place blockchains are used to displace legacy voting methods, however I’d argue the foundations governing these experimental crypto networks supply essentially the most thrilling testbed for voting innovation in a couple of hundred years.
In reality, governance innovation often is the most incessantly missed public profit byproduct of the crypto infrastructure funding glut.
In the previous 12 months, the DAO idea has witnessed a resurgence, providing a sneak peek into one attainable way forward for public items funding. We simply witnessed the fruits of a year-long (and apparently profitable) Zcash governance realignment (see yesterday’s glorious Pro analysis piece). We even watched a token challenge group vote to self-destruct final month for the primary time. And we’ll in all probability watch extra communities expel their leaders or fork away from dissident stakeholders if they’ve the correct motivation.
(An in-depth take a look at the year-long Zcash governance replace.)
Sure, there are weaknesses in crypto governance. Validator cartels, miner centralization, and deposit centralization can (and arguably has) led to occasional vote manipulation from whales. But that appears to be a weak spot inherent in most political methods.
On the opposite hand, emergent issues inside crypto have a tendency to draw creatives who discover options shortly.
One drawback/resolution illustration of this was introduced in a latest put up by Placeholder GP Joel Monegro, relating to the “price of a crypto vote.”
Joel says you may ballpark the tangible price per vote by crypto borrow charges. The longer the maintain interval required for a given vote and the much less liquid the token, the costlier that vote turns into. You guarantee extra of your voters are aligned along with your mission and have actual pores and skin within the recreation.
It’s fairly primary, nevertheless it additionally makes tangible one in all my theses that there’s financial worth to crypto governance rights…supplied you are speaking about securing methods with actual financial worth.
Joel says “protocols and DAOs can influence the cost of their governance by changing how long it takes to vote.” Which means one thing like a minimal holding interval for voting tokens might open the door to appeals processes, and communities might implement variable holding intervals relying on a vote’s significance.
These fragile methods will get anti-fragile over time as extra experiments (and errors) are made.
Crypto has all the time been an explicitly political motion. That’s why I for one will indulge at this time in Iowa schadenfreude as a result of I do know it’s good for the candidate I’ve supported for the previous eight years: