Advantages and disadvantages of on-chain governance!
Cryptocurrencies have a system for managing and implementing changes to the blockchain called on-chain governance. Developers propose changes to cryptocurrency blockchains. And this proposal is accepted or rejected by voting. It is determined by blockchain stakeholder votes. Anyway today I will discuss with you about the pros and cons of on-chain governance. Let's start the discussion:
It is a decentralized form of governance. One of the advantages of being decentralized is that it relies on the community to make collective decisions. Changes to a blockchain are not routed through a core development community. Changes to the blockchain make it possible for the development community to evaluate its merits and demerits.
As a result, stockholders have a say in the proposed changes to the votes cast by stockholders. These stockholders can read or discuss the pros and cons of this. It offers quick turnaround time for changes informal governance requires time and effort among stakeholders to reach an agreement about the direction of a project.
One of the disadvantages of this process is that once the voting process is done through this process, developers are bound to follow the results. There is facility to change the programming as needed. Programming starts or stops and these have the advantage of being audited and all node operators must follow the decision. To remain part of the network these decisions must be followed and accepted as well as updated or kept unchanged. And if any operators, participants and developers i.e. those who have voting privileges do not follow the voting results then they will not be supported by the community. They even use a version and their version of the blockchain and network becomes a fork.
One of the objectives of the on-chain regulated blockchain is fair elections and participation by all. But if it has low voter turnout then it is a problem for it. Because these voters form a centralized group that determines the future of the blockchain. But low voter turnout creates other problems. Such low voter turnout undermines the benefits of decentralized systems.
Owners who own more tokens have more votes. This means that users can take control of the voting process with greater participation. And because these voters have more votes, they can drive development in their desired direction. And this is also a major disadvantage because it focuses on maximizing future profits rather than innovating for the future of blockchain.
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Everything comes with certain advantage and disadvantage and Crypto is also following the same methodology however considering what kind of revolution it brings through technology is more of an opportunity and it brings a bunch of advantage scenarios for us.
Thank you so much for your valuable feedback
What a Explain, Go ahead Bro,
Thanks
Your article is very good. Nicely explained about Advantages and disadvantages of on-chain governance. I hope you write articles like this in the future.Thank you.
Thank you so much for your valuable feedback
There are several pros and cons to chain governance, which you have presented nicely.