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A Summary of

Blockchain governance/ governance 101

Vlad Zamfir
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Intro: What is it?

  • Node governance is performed through operators executing software
  • Software governance is performed through developers creating the software

Intro: Why is it needed?

  • Needed for tech maintenance, upgrades, and attack recovery
  • Ensures (or attempts to ensure) that the impact of the blockchain on the world is beneficial

Basic terms and definitions:

  • Governance: decision process
  • Governed: the resource under governments
  • Participants: involved with/influence governance process
  • Stakeholders: affected by governance
  • Structure: plans/agreements of the process; can be thought of as the rules directing governance

More on Participants

They use information (about governed, the process, other participants) to achieve goals in the governance process. Participants’ knowledge of other participants influences their strategy and generates… - Expectations: aspects of the process that are expected; can lead to governance norms - Governance norms: What becomes normally expected - Common knowledge:  I know that you know (keeps participants honest); can help enforce governance norms since common knowledge cannot be disputed Because participants’ knowledge of each other influences the governance process, it is part of governance structure.

More on Structure

Can be organized into two parts (internal and external). - Internal Structure: Exists independent of participants’ motive/info - External Structure: Exists because of participants’ motive/info; limits participants (governance norms); hard to change/violate (due to norms and common knowledge)

Structure can be:

  • Formalized: can be written out and communicated
  • Institutionalized: coded into the governance structure
  • Procedural fairness: results when governance is formalized and institutionalized. Generates common knowledge. Can be problematic if the governance process is not good

More on Stakeholders

  • Disenfranchised: when governance does not act in their interest
  • Represented: when governance does act in their interest
  • Apathetic: if disenfranchised, they can basically give up. Not engaged
  • Engaged: if represented, they can be involved. This is the goal
  • Illegitimate: how a governance process is described when stakeholders have common knowledge that they are not represented
  • Legitimate: how a governance process is described when it represents the stakeholders When a governance process is illegitimate, stakeholders can act by:
  • Loyalty/apathy: do nothing
  • Persuasion:  Influence the participants
  • Amendment: modify structure
  • Revolt:  replace the governance process
  • Forking/Splitting: make a different process off the original There can be issues with all these options. Some may not be possible depending on the particular governance process.
  • Ideal governance process: when everything comes together for the ultimate benefit of stakeholders. Not realistic. There will always be some compromise.

Process: for Ethereum blockchain governance

The Ethereum blockchain structure incorporates many intertwined governance processes. Ethereum governed (resources) includes: - Full nodes – operators decide what software to execute (influenced by peers/community) but are limited to executing software issued by Geth and Parity (development teams) - Miners – influenced by profit motive - Geth and Parity codebases – Two different development teams with different motivations that generate Ethereum software and make protocol alterations. Representatives attend All Devs call. - All Devs call – Occurs 2x a month. All developers involved create consensus on Ethereum software developments etc - Ethereum Improvement Proposals (EIPs) – can be issued by all Github accountholders. When an EIP advances through proper development or gains enough attention it is brought to the All Devs Call - Roadmap – long-term future goals of Ethereum. Small items become EIPs. Large items get to be papers. It is the most institutionalized, but least formal, of all of Ethereum’s governance processes.

Ethereum governance legitimacy

  • Overall, pretty good performance. Most people involved are happy
  • There could be improvement by more education and participation in the process
  • Some hard forks are causing some controversy and questions and should be monitored so they do not jeopardize governance legitimacy

Conclusion: pet peeves

  • Governance that removes node participation by deciding what software to execute
  • Requests for developer accountability without realizing that this is already done by governance structure
  • Creating governance norms that actually make governance worse

Conclusion: blockchain governance…

  • Does exist, even if not formalized
  • Has structure limiting power which can include norms and common knowledge
  • Legitimate processes are best Call to action: Learn about other governance processes and use legitimate ones Call to caution: governance is hard, so it’s best to take current processes and see how they can be improved, instead of trying to institutionalize one idea.
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