What is [Crypto] Governance?
Strong governance models have been catalysts for the golden ages of progress, while poor governance models have propelled humanity into the dark ages of regression. Governance models establish formal procedures for conducting the policy, actions, and affairs of a state, organization, or people. They enable systematic decision-making to move groups with shared interests forward.
Governance and power are closely related. The decision-making implications given to those that govern empower them to set rules for individuals in their system.
In traditional corporations, governance tends to be hierarchical. Decision-making is concentrated in c-suite executives, chosen by a board of directors, which shareholders elect. Thus shareholders with the most extensive holdings have more influence over a corporation’s strategic direction. While this correlation of holdings and power is certainly present in crypto, governance and control are less clear-cut than in traditional businesses.
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INTRODUCTION The top 50 most valuable protocols all have circulating market caps of at least one billion. Why do these tokens, many of which have unproven business models, trade at such high valuations? One of the core assumptions behind these valuations is that the protocol will someday mature to have product-market fit, justifying its current market value. For protocols that operate decentralized applications (dApps), assessing profitability is one of the...