On Crypto Governance - a16z crypto

To address DeFi protocol governance, projects such as Compound pioneered the governance token model. Governance tokens provide voting power, allowing token holders to vote on protocol proposals that any community member can submit. Admittedly, this system is not perfect. There are all kinds of problems such as voter apathy, high participation cost

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Growth incentives Compound, an on-chain lending protocol, decentralized itself in June 2020, with its core developers turning over the network's operation and ownership. Community members had control over the protocol's reserve assets generated by borrowers in a Compound Governance DAO. This was (at the time) the highest revenue generated by an on-... See more

The three key governance areas Growing DAOs will likely reach the point where their communities demand governance structures for all three key needs. Below, I share a more detailed breakdown of each of them to help builders/protocol developers identify where they will have to put their focus if they want to build a successful DAO.

Introduction Curve Wars highlight crypto governance. Metagovernance has far greater ramifications than the Curve Wars suggest. This article introduces metagovernance and its roots in the traditional world, as well as a specific metagovernance event with Fei-Index-Aave. I will conclude with implications and future considerations.