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A Summary of

Notes on blockchain governance

Vitalik Buterin
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There is a resurgence of on-chain coin-holder voting as a multi-purpose decision mechanism. These votes are used for protocol parameters and for implementation of protocol upgrades. Votes are automatic in all cases.

Blockchain Governance

  • Model #1: Decision Function
    • Treats governance as a function
    • Inputs are the wishes of legitimate stakeholders
    • Output is the decision
    • Useful as an approximation
  • Model #2: Coordination
    • Sees governance as something that exists in layers
    • The bottom layer is always the ultimate deciding layer
    • The second layer is coordination institutions
      • Creates focal points around how and when individuals should act
      • Establishes a culture where everyone can see "go" or "stop" signals
    • Governance requires coordination "games" for meaning

Role of Coin Voting

  • Tightly coupled coin voting
    • Creates a default in favor of the blockchain adopting what the majority wants
    • Requires minorities to exert greater effort to coordinate a hard fork to preserve a blockchains existing properties
  • Loosely coupled coin voting
    • Only a coordination tool
    • Requires users to download and run the software that implements any given fork
  • Low voter participation in coin voting mechanisms
  • Low probability that a single vote will have a large impact
  • Bribes can be offered to increase voter turnout
  • Ethereum does not have any examples of tightly coupled coin voting
  • Ethereum uses tightly coupled miner voting
  • Ethereum results show voting may not be able to deliver decentralization if the voters are not technically knowledgeable

Multifactorial Consensus

  • An approach for blockchain governance
  • Different coordination flags and different mechanisms are polled
  • The ultimate decision depends on collective results of the mechanisms together
  • Flags may include:
    • Coin holder votes
    • Consensus among dominant core development teams
    • User votes
    • Established norms
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