2020-03-11 LSWG Call 5 - Governance Discussion
Intro to blockchain governance by Brian
https://github.com/ChorusOne/liquid-staking/files/4322655/Governance.and.Liquid.Staking.pdf
- History and problems of governance in blockchains
- On-chain governance
- Currently results are positive (Cosmos, Tezos, on-chain governance has gone smoothly)
- Many chains adopting on-chain governance
- Some concerned: e.g. Vlad Zamfir
Discussion
- Are implementations present to discuss how they would handle governance?
- Acala might have a design (Marouane)
- Everett: person that locks ATOM on Hub (creates Liquid Staking Position) has governance rights
- Could e.g. also build a DAO that votes of entire stake on Everett
- Baker DAO: automated baking and payout system for Tezos, governance rights are a big issue
- Could you restrict governance rights to move to another chain?
- Forbid voting from other chain? Also forbid exchanges? How can you do that? In any case this would be censorship
- Is it ok to separate voting rights from value and rights for staking rewards?
- Preferred versus common shares
- Is vote buying dangerous?
- Different chains have different assumptions: e.g. Cosmos you have to wait until after lockup, Tezos you can sell after voting
- If you sell your vote for sth that is detrimental to the network token price will go down, thus if your tokens are locked you are held accountable
- Even if you simultaneously short, there is a limit to how much you can borrow to short (or also borrow to sway votes)
- Holders of liquid staking derivatives aren’t probably going to be the ones holding the tokens
- The success of such an operation will also depend on the voter turnout/participation rate in governance
- Free market hypothesis
- One account can split his votes (potential change to governance)
- Is there a distinction in governance models between application-specific chains and general purpose chains?