Speed ​​reading | Chain governance and DAO must read articles recommended

Author: True Satoshi

Generally, there are 5 articles a day. The day before yesterday, I made an anonymous coin article selection. It seems that the response is not bad. I decided to do another blockchain management. Today, the content includes:

1. The story of the irrational token holder;

2. Blockchain governance: weaving our future;

3. Oppose the governance on the chain and refute Fred Ehrsam's governance blog post;

4. Some opinions on the management of blockchain;

5. Thinking about governance and network effects;

6. The interpretation of DAICO;

7. Why 2019 will be a year of DAO;

8. Moloch DAO: defeating the company system;

9, the status quo of DAO;

10. Highlights of four DAO projects (Aragon, DAOstack, Colony, Moloch).

1 The story of the irrational token holder

Author: Kathleen Breitman

Kathleen Breitman is the woman of the Tezos founder's couple. Tezos is one of the most influential and label blockchain governance projects in the blockchain. This is mainly Kathleen's true vision of blockchain governance and Tezos governance design.

Blockchain governance is not entirely suitable for any existing model.

Tezos does not have the concept of a registered identity, so all decisions regarding protocol changes will be weighed against the number of tokens owned by the participants. We consider proportional voting based on token ownership as an ideal feature of our governance system. It is also said that the corporate governance structure and the similarities of Tezos, part of the reason for this comparison is that we use representative voting (liquidity democracy)

We may see many failures in corporate governance, but we believe that there is a key difference when considering blockchains as specific use cases. The only asset of a blockchain-based network is the belief of the people who use it. Cryptographic currency is very similar to legal currency because people believe that others will find them valuable and want to hold them.

Vitalik Buterin said that in the Tezos network, a person may be able to use bribery to form an alliance. If a group of participants does try and successfully promote a disproportionate amendment to the group, then the social consensus will only take over everything (I am The understanding here is that Polychian's Olaf mentioned when talking about PoS: social consensus means that when a bribe occurs, if most people in the community do not accept it, they can fork a new agreement, and the new agreement will give the bribe Kick off). We don't think our governance model is near perfect, which is why we created a mechanism to change it within the protocol itself. We have many opportunities to improve this model in the future.

Full text link: https://medium.com/tezos/the-myth-of-the-irrational-token-holder-c12438709afd

2 Blockchain Governance: Weaving Our Future

Author: Fred Ehrsam

Fred Ehrsam is the co-founder of Coinbase and a partner at Pradigm Capital. His view is that blockchain governance design is the most important issue of blockchain, the key components of blockchain governance, current methods, potential future approaches, and some suggestions for the community.

I think governance is the most important issue in the field. Other basic issues such as Scalability can be said to be solved by using governance to set the right motivation for people to solve problems. However, there is very little research on governance, and little is known about it. The two key components of governance are incentives and coordination mechanisms.

Current Approach: Two of the Biggest Blockchains Today: Analysis of the Advantages and Disadvantages of Bitcoin and Ethereum


The incentives are: 1) developers: increase the value of existing token holdings; 2) miners: increase the value of existing token holdings; 3) users: increase the value of existing token holdings.

The coordination mechanism is for offline communication, and developers coordinate through the Bitcoin Improvement Proposal (BIP) process and mailing lists. Miners can coordinate on the chain in their own creation chain.

Asymmetry in incentives poses risks to the system, resulting in a growing concentration of early core developers in a small group after a number of cycles, slower technological advances, and conservative. Developers have strong power but lack economic incentives and therefore risk being bribed. The asymmetry of coordination capabilities gives the miners enormous power. The exchanges between miners are very small, and miners can also get disproportionate power by bribing developers or hiring themselves.


The systematic incentives and coordination mechanisms of Ethereum are currently similar to Bitcoin. As Ethereum turns to PoS, power will change. The “certifier” with a sufficient amount of Ethereum will replace the miners' power. This is especially true, because solutions like 1protocol can even involve the smallest Ethereum holders, making the difference between miners and users even more Flat and potentially reduce the risk of centralization such as bitcoin.

The weaknesses of the current mainstream governance model include: 1) over-reliance on its creator (Vitalik); 2) the limited way in which bitcoin motivates core development, forcing more developers to engage in projects to create tokens to support themselves.

Double-edged sword for chain governance

Chain management is a double-edged sword. On the plus side, it helps ensure that processes are followed consistently, which improves coordination and fairness. The downside is risk, because once established, the meta system will become more difficult to change. For some use cases, it may be good to tend to static. This is especially true for value storage.

Fred then introduced several governance strategies that might be implemented in the future: – Futarchy: Society defines its value and then uses predictive markets to determine what actions maximize these values. – Mobile democracy: Everyone has the right to vote, to vote for others and to cancel their voting rights at any time (more and more PoS systems are using this). – Second vote: It is a system for purchasing votes, where each additional vote costs twice as much as before. In other words, money can buy tickets, but the benefits are declining.

Fred's summary: Governance should be the main focus of investors in this field. The principles of cryptographic economics and overall governance of these networks are critical.

Full text link: https://medium.com/@FEhrsam/blockchain-governance-programming-our-future-c3bfe30f2d74

3 Oppose the governance of the chain, refuting Fred Ehrsam's governance blog post

Author: Vlad Zamfir

This article is very interesting, Ethereum star developer Vlad Zamfir refuted the content of Fred, the second article above.

There is no doubt that governance decisions are important and time is long. The structure of the blockchain governance process can significantly affect governance outcomes. However, this does not make blockchain governance a design issue. Before looking at the revolution, let's take a look at the system. He knows very little about the working principle of the Ethereum governance process. Everyone just assumes that Bitcoin's governance and decision-making are very bad. Ethereum is completely calculated by Vitalik, but the internal governance of the system has not been See and understand.

Against chain governance

Adopting chain governance is extremely risky because it always represents a revolution. This is not necessarily a rebellion against the governance process that incorporates code into the software repository (because it can be imagined that the code can be coded on the chain, although this is usually not the case), but a revolution that overturns governance The process of the entire node.

Token-based governance in the chain is not only inconsistent with the interests of users, but also runs counter to the spirit of the public blockchain. The blockchain serves the public and serves the public interest. It is not for the big family to get rich. Money holdings are highly concentrated in the hands of a few people, and blockchains should not be owned by anyone.

Full text link: https://medium.com/@Vlad_Zamfir/against-on-chain-governance-a4ceacd040ca

4 Vitalik's comments on blockchain governance

Author: Vitalik Buterin

This is written by the founder of Ethereum Vitalik. This article is also premised on the basis of the above Vlad article against Fred. On the whole, he is supporting Vlad, but his attitude is more gentle and more neutral.

I think the vote on the chain is overrated, and the status of "informal governance" by bitcoin, bitcoin cash, Ethereum, Zcash and similar systems is far less than people think. The purpose of the blockchain is to completely eliminate the direct communication of people, and the feeling of supporting full algorithmic governance (emphasizing "completeness") is absolutely crazy, and underestimates the loosely coupled voting by power voting and similar systems.

Chain governance makes it easier to split minority groups? Splitting will continue to disrupt network effects. Emphasizing “governance”; in the absence of coordination games (or more generally, multi-equalization games), such governance concepts are meaningless

I would also say that voting or other explicit plans for voting on similar chains have no status. Leading alternatives seem to be the consensus of core developers. The blockchain governance approach I advocate is “multi-factor consensus”, in some limited cases. Tightly coupled voting is also possible – for example, despite the flaws, the miner's ability to vote for Gas is a feature that has proven to be very beneficial in many situations.

Full text link: https://vitalik.ca/general/2017/12/17/voting.html

5 Reflections on governance and network effects

Author: Luke Duncan

The author of the article, Luke Duncan, is a researcher at Aragon. This article discusses governance and its impact on network impact, and why both are related to value flows and how they are acquired in token-based blockchain networks. In the end, it brought out the governance-as-a-service (GaaS), which made a wave of Aragon.

If you're building a product that relies on network effects, creating governance tokens or adding governance to existing tokens can be very powerful. It increases the voice of network participants and makes the network more flexible.

There are many potential methods for token-based governance, including secondary voting, mobile democracy, minimalist democracy, and many other forms of concern.

Each process has different advantages and disadvantages, some advantages and disadvantages are obvious, while others may require experimental implementation to discover. It is not clear what the ideal governance mechanism is, or whether there is an effective “one size fits all” mechanism. However, it is clear that finding a better mechanism is very valuable.

Aragon is building infrastructure to support these experiments. aragonOS allows building governance applications and sharing them across organizations, and can set privileges so that you can first experiment with more experimental models with limited capabilities and then gradually give more privileges. This will enable us to bring the continuous improvement process in the software world to the economics and social sciences while maintaining acceptable levels of risk.

Full text link: https://blog.aragon.org/thoughts-on-governance-and-network-effects-f40fda3e3f98/

6 DAICO's explanation

Author: Vitalik Buterin

This is a brief description of Vitalik's DAICO Interpretation of ETH Research, which combines some of the benefits of DAO to improve the ICO model, but in a way that minimizes complexity and risk. This is mainly about his design ideas, and the comments below are also very exciting.

The idea is as follows. The DAICO contract is issued by a single development team that wishes to raise funds for the project. The DAICO contract begins with a “contribution model” that defines a mechanism by which anyone can contribute ETH to a contract and receive tokens in exchange. This could be capped sales, no capped sales, Dutch auctions, interactive tokens, KYC auctions with dynamic per caps, or any other mechanism chosen by the team. Once the fundraising period is over, the ability to pay ETH will stop and set the initial token balance; from there, the token can be traded.

Voters provide a reasonable and not too high monthly budget for the development team and increase the budget over time as the development team has to do things to get funding. If voters are very dissatisfied with the progress of the development team, they can vote at any time to completely close DAICO and recover the funds.

Full text link: https://ethresear.ch/t/explanation-of-daicos/465/15

7 Why 2019 will be a year for DAO

Author: Stefano Bernardi

Stefano Bernardi is an executive director of the Aragon project and one of the editors of TokenEconomy. The article mainly writes that the six trends he observed may drive the decentralized organization's experiments.

These six trends are: – Talent globalization and “work” transformation – a resource-rich stakeholder network needs to be coordinated – the rise of decentralized finance – participation in governance standardization – de-platformization becomes an important issue – political/social organization Rise

These trends have caused interest and demand for DAO. He then gave a lot of interesting examples, Gitcoin, which allowed the open source community to motivate their work and profit from it. Espresso, a decentralized data store that integrates with aragonOS, allows DAO teams to share files without relying on Dropbox or Google Drive; and Planning Suite, another Aragon application that provides a collaborative planning model that makes A number of different stakeholder groups within an open source or decentralized organization can coordinate the use of shared resources. Finally, one of the most interesting projects in the field is Pando, which actually converts creative projects with multiple collaborators (from books to music to video games) to DAO. There are many examples of decentralized finance. MakerDAO is an increasingly important project and 0x is transitioning to community governance. At the end of last year, Melon disclosed its proposed governance approach.

Regarding political and social organizations, the use of DAO remains to be seen. When you see both their trends and the upcoming DAO infrastructure, it's hard not to be excited about the possibilities of DAO development in the coming year.

Full text link: https://tokeneconomy.co/why-2019-will-be-the-year-of-the-dao-20f18117e4c1

8 Moloch DAO: Knocking the company system

Author: Simon de la Rouviere

MolochDao is the DAO who was founded by the founder of Spankchain and his good friends. The DAO also successfully ignited the cryptocurrency community to re-focus on DAO.

The key to Moloch DAO: A novel organizational design whose main purpose is to more effectively coordinate the resources used to develop Ethereum development grants. (So, a bit like the development union of Ethereum)

By creating well-defined rules for members of smart contracts, Moloch DAO is a novel approach to collective organization around a common goal. It reduces the cost of coordinating transactions while sacrificing the flexibility of resource management and allowing its members to be prone to defects. The assumption is that this trade-off may be a meaningful way of collectively allocating and organizing funds. very interesting.

Full text link: https://medium.com/@simondlr/the-moloch-dao-collapsing-the-firm-2a800b3aa2e7

9 Status of DAO

Author: Vu Gaba Vineb

This is one of the best articles about DAO's history and now (I don't think one personally thinks it). The author's definition of DAO is an organization that people work together through trust agreements, and can collectively do something for a reason. decision making.

Bitcoin – original DAO

Essentially, it is an organization run by miners and entire nodes that coordinate with each other through the Bitcoin protocol to determine which transactions are included in the main chain of the Bitcoin blockchain and what their order is. The reason for the organization is simple: protect the Bitcoin network and promote transactions on it.

DashDAO – the first "meaningful" DAO

In this DashDAO, anyone can pay 5 Dash to create a proposal to seek funding. Dash Masternodes vote to decide which proposals should or should not be funded. The decision to make in DashDAO is about how to allocate a pool of funds for real-life proposals to ultimately promote Dash adoption.

DAO – the infamous DAO

The decision to make in DAO is similar to DashDAO: how to allocate a pool of funds for real-life proposals and ultimately return the proceeds to DAO. Unfortunately, it ended very early, and there was a vulnerability in DAO's code that led to the notorious hacking attack.

MakerDAO – Administrative DAO

The decision to make in MakerDAO is basically to adjust the configuration of the entire system and trigger an emergency shutdown if necessary. The configuration to be determined includes the CDP type parameter, the CDP type to be added, and the price prediction machine set of the mortgage type.

Aragon DAO – Plug and Play DAO

With Aragon, you can easily create a simple DAO in just a few steps. In such an Aragon DAO, you can assign equity to a group of initial members, vote for new members' rights, vote for releasing funds from your DAO, or be binding on anything.

DigixDAO – Gold DAO

The decision in DigixDAO is similar to DashDAO: how to allocate a pool of funds for real projects to facilitate the adoption of DGX.

MolochDAO – Incentive Adjustment DAO has two types of decisions in MolochDAO: First, who is accepted into the union. This is to make the interests of new entrants better aligned with the union. Second, how to allocate new shares (essentially dilute shares) to a proposal that should increase the value of the entire union.

DAO Stack and DxDAO – Anarchist DAO

DAO Stack (a framework for creating DAOs), the original purpose of DxDAO by DAOstack is to manage the parameters of the DutchX protocol. DutchX is a novel and completely decentralized trading protocol using the Dutch auction principle.

Polkadot – meta-protocol DAO

Polkadot is a meta-protocol – a protocol used to change its own protocol. Polkadot takes it to another level by moving the protocol upgrade mechanism over the chain. This means that Polkadot's stakeholders can vote hard to determine hard forks, which can be used to smoothly develop Polkadot into any possible way through protocol upgrades.

Full text link: https://hackernoon.com/the-state-of-the-daos-b7cba318460b

10 Highlights of four DAO projects (Aragon, DAOstack, Colony, Moloch)

Author: Daniel Kronovet

The author is Tel Aviv's data scientist Daniel Kronovet, from the Colony team. This article compares and contrasts the basic highlights of four important Ethereum DAO projects (Aragon, DAOstack, Colony, Moloch).

Aragon is arguably the most compelling DAO project and is the largest of the projects discussed in this article. Aragon is more focused on providing a secure and versatile backbone for the formation of general organizations, rather than building products around specific decision mechanisms. On the one hand, this is very practical and attractive: by leveraging the foundation built by the Aragon team, end users only need to use the tools provided by Aragon to quickly form an organization that meets their specific specifications.

DAOstack clearly values ​​the decentralized decision-making mechanism, and the project focuses more on solving the inherent problems of large-scale decentralized decision-making. DAOstack's most notable achievement is not in technology, but in its "holographic consensus" cryptoeconomic mechanism. Use a small number of participants to achieve effective and reliable approximation of group decisions (a hologram is an image in which each part contains all the information of the whole). The mechanism's role is to motivate a “predictor” network to bet on whether a proposal will pass; then use that prediction (and many other rules) to decide whether to emphasize the proposal and to modify the number of people required to pass the proposal (eg A highly promoted proposal may require only a small total number of votes to approve.)

Colony chose to focus on the day-to-day operations of the organization. Colony focused on minimizing the need to vote in daily operations, using "no license" as a battle slogan. Utilize time to implement a series of resource allocation mechanisms that are “no license required”. Time plays a role in the group in two key ways: the reputation gained wins over time. The greater the reputation that supports a proposal, the sooner you get funding.

MolochDAO has suddenly appeared in recent months and has generated tremendous appeal. Unlike other projects, such as Aragon's starting point is to get rid of bad government, DAOstack and Colony's starting point is to improve the dysfunction of human organizations. Moloch is based on solid rationalism and encryption economy, and its starting point is to solve the decentralized organization. Pain point – Committed to using the "DAO" approach to solve the problem of collaboration failure. Moloch can be described simply as an experiment of coordination mechanisms, seeking to create “minimum feasible processes” that allow people to share shared resources for a common goal while actively minimizing the attack or laissez-faire of bad factors (from technology and society). on).

Full text link: http://kronosapiens.github.io/blog/2019/06/16/aragon-daostack-colony-moloch.html

We will continue to update Blocking; if you have any questions or suggestions, please contact us!


Was this article helpful?

93 out of 132 found this helpful

Discover more


Binance.US Faces Regulatory Challenges in the United States

Regulators from both Florida and Alaska have requested Binance.US to cease its operations and refrain from providing ...


Grayscale and FTSE Russell Unleash the Cryptocurrency Sector Index Series A Match Made in Blockchain Heaven

UK-based Grayscale, known for their fashion-forward digital investments, is teaming up with FTSE Russell, a division ...


IEEE Joins Forces with Avalanche and Zupple Labs, Unleashing Cutting-Edge Credentialing System

IEEE and Zupple Labs team up to launch Avalanche Proof-of-Stake protocol for credentialing in the fashion industry.


Welcome to the Memeinator-verse: A Meme Token On Fire! 🔥

Memeinator's stage 6 release sells out in record time, fueling high expectations for the brand's future in 2024.


Binance Brings the Hammer Down on AEUR: Stablecoin Rockets 200% Overnight

Binance Halts Trading on AEUR Stablecoin as its Value Skyrockets Over 200%


The Crypto Community Speaks: Binance Holds the Crown

According to a Binance survey of 1,172 users in geographical regions where the platform is permitted, 45% use cryptoc...