Blockchain Governance :Its importance and uses

Blockchains are decentralized digital network providers whose governance is characterised by a complex interplay between stakeholders. To manage such a community of different people with different roles, some kind of technique is needed.

So Governance by the Blockchain refers to the use of blockchain technology to more efficiently govern and coordinate existing actions and behavior.

Public Blockchain Governance is characterized by the following stakeholders:

  • Token Holders
  • project Teams
  • Core Developers
  • Node Operators

We all fall under these. For me , governance is a way to keep things in control and avoid chaos due to the fact that it is a community so decisions need to be taken as a community and all individuals has a say. Take for instance, in a voting situation , all members has an equal right to choose a particular option once , and the majority of the choice from the result is what the team will stick with.

There are two types of Governance :

Off chain and On chain Governance

Importance of Governance

A governance system is necessary for blockchain projects to move forward. It should be able to fit most needs as blockchain systems need to be able to adapt to their environments. It is necessary to make important decisions from marketing, to PR ,to legal compliances, strategic changes, etc

Using Governance tools :Snapshot

Snapshot is a place where projects can create proposals for people to vote on using cryptocurrency. It is used by several companies in the DeFi space to help survey users. The project uses ‘off-chain’ signing techniques to make voting fee less. Normally, to vote using cryptocurrency would normally incur fees to process the movement of currency from one wallet to another but on Snapshot, that doesn’t happen, thanks to the clever use of the decentralized storage network called IPFS. Because Snapshot doesn’t use ‘on-chain’ verification, any votes are essentially fee-less.

I would love Covalent to use this tool, as it would help in determining some necessary decisions in the project. They have such an amazing community, and will love to participate in voting actions.

I hope you have enjoyed this article, and have gotten information from this.

Thank you.

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