Investopedia, the famous financial knowledge database and financial news service, recently published an article that discusses the importance of cryptocurrency governance.
The author, started off by mentioning the DAO on the Ethereum network that raised a record $100 million USD, but eventually got hacked, lost $55 million USD, and created a fork in the Ethereum community. The article highlights other failed governance models such Tezos, which lead to a lawsuit and stalled development along with how the Bitcoin Core team prevented the expansion of the Bitcoin blocksize, which lead to a fork and the creation of Bitcoin Cash.
However, the article continues to highlight the importance of a working governance model in cryptocurrencies. relates back to how traditionally “[e]quity markets have clearly defined stakeholder structures for investor recourse”, which “protect investor interests and prevent rogue executives from running amok with the company”. emphasizes Dash and how it has incentivized stakeholders to maintain the blockchain working in favor of the users. Sharma quotes Ryan Taylor, CEO of Dash Core team, on how the Dash Core team is “owned indirectly by the network and [has] a fiduciary duty back to them”. The author also mentions Decred as a working governance model in cryptocurrency.
Importance of Stakeholders
Stakeholders are anyone with interest in the success of a project, which for cryptocurrencies are users and hodlers. Empowering these stakeholders with ability, responsibility, and rewards to improve the blockchain along with the ability to delegate paid agency, though code, to other stakeholders allows for an evolving development structure to fit the needs of the users.
Cryptocurrency commonly receives criticism from mainstream outlets that it is not backed by a national government nor bureaucracy. Contrarily, many find cryptocurrency appealing strictly because it is back by code and not a bureaucracy that can change goals on its own accord. However, it can be argued that a good transition to cryptocurrency from the traditional financial system is cryptocurrency backed by publicly viewable code, but also has officially paid developers and organizers that are incentivized to act in the best interests of the cryptocurrency users. Those individuals then act as a reference point for new potential cryptocurrency adopters afraid of a faceless organization. This system not only provides a stepping stone between the old financial system and cryptocurrency, but also provides a sustainable path for long term growth and development.
As the article highlighted, bad governance structures can lead to bad results for end users. The cryptocurrency could become divided, slowed down, or have more expensive transactions. This hinders long term growth. However, good governance structures with proper incentives, maintain a solid and secure network with fast and inexpensive transactions in order to create the stability that is necessary for long term growth.
Dash has been planting the seeds for long term growth
Dash is able to utilize its DAO to leverage key incentives to create unique stakeholders. Between the masternodes, miners, and treasury, Dash is able to ensure that the network is maintaining low fees, fast confirmation times, security, and privacy. Dash demonstrated its consensus ability through the DAO with its most recent upgrade, which doubled the block size and lowered transaction fees without a fork, which other cryptocurrencies still struggle to accomplish. The Dash DAO has been continuously improving the development of Dash and has significant plans for the future.
The DAO of Dash has been able to create the structure necessary for a long term feasible cryptocurrency that works to accomplish the desires of consumers. The article above highlights that others are starting to take notice of the success that Dash has had in the cryptocurrency space where other coins have had lackluster results.
