A big hot-topic in the cryptocurrency world is governance, who gets to make the decisions to run the network. This question is so important that it split Ethereum in two, and threatens to do the same to Bitcoin this year. A well-structured decision-making process is essential to the long-term viability of any project, and digital assets are no exception.
Dash was one of the very first to have a thoroughly-intentioned governance system, and we have that to thank for a very stable and drama-free community over the years. However, there have been some criticisms that the entry price point to being able to have a masternode and vote on governance decisions, once only a few thousand dollars, is now far too high. As such, “community-based governance” is the concept du jour in the cryptoverse, with many clamoring for everyone to get a vote in how coins are run. This might not be the best idea right away, and here’s why I think Dash has it right in delaying implementing a more purely democratic system.
Dash governance favors early adopters, with good reason
Early Dash investors got in for a very cheap price, and now exert a kind of influence on par with that of millionaires. This is a perfect mechanism for preventing a hostile takeover of Dash by outside influences. Early adopters in other coins may become rich for backing the right horse, but unless they specifically reinvest their profits in the infrastructure necessary to run the coin, they have no special influence. Meanwhile, an outside actor can buy out the development team and build a few mining farms (or direct current hashpower away from other coins) and easily exert a great deal of influence, with early actors powerless to resist. Dash safeguards against this by giving the early users a lot of influence in governance, and by making newcomers buy into the coin at very high amounts in order to have similar influence. This simple economic feature keeps the balance of power.
The barrier to entry secures wise governance
We now have two barriers to entry: foresight and finance. This means that long-term believers in the coin, as well as those who have staked significant resources into its future, get to throw their weight around the most. This works wonders to weed out a lot of monumentally bad ideas. I have personally seen plenty of those, from activating Segwit on a network that absolutely doesn’t need it in order to scale, to massively slashing the Core team’s (at that time) barely competitive budget in favor of countless minor (and poorly thought out) community initiatives. Community vigor is great, but lacks the necessary prudence of someone who has either been in the project since the beginning or who has sunk a literal fortune into its future. A wave of excited new users without the context of either experience or heavy financial investment can spearhead some major changes that can cause the project to become a failure. New members risk relatively little, while the more prudent voices could lose years of their lives and large fortunes.
Easily-accessible governance is coming, but after the network is mature
The beauty of the system is that, in a few years time, community-wide governance accessibility will become a reality with Dash. Later versions of Evolution will include trustless masternode shares with voting rights. This will allow everyone to have a say in how the coin is run, but only after the network is mature. A well-established coin being used to run day-to-day transactions all across the world will be much more insulated against spur-of-the moment fervor-based decisions by new users who have nothing much to lose. A healthy enough ecosystem can handle very broad participation.
Governance is crucial in the development of digital assets. Getting governance right can be the difference between a flash-in-the-pan fad coin and a long-term, world-changing powerhouse. Based on Dash’s structure thus far, its long-term prospects are looking pretty good.