SUMMARY OF THIS ARTICLE
A single-minded focus on token price does not serve the best interests of the Crypto Community and of Society at large.
There is no gap between the interests of Token holders as a class and those of Stakeholders and the broader society.
Crypto Governance deals on a daily basis with the most myopic, moronic, opportunistic, self-destructive, and pathologically asocial subset of Token holders.
The myth of Token holder value: the proper goal of Crypto governance should NOT be to maximize Token holder wealth.
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What Lynn Stout writes in "The Shareholder Value Myth" can easily be applied to the world of Crypto.
No team should be under a legal or implicit obligation to prop up the price of a token, by releasing timely news items, for example, and to look after the interests of Token holders.
The idea that the prime focus of corporate governance should be to maximize the wealth of price-obsessed Token holders is derived, mainly, from the work of economists such as Milton Friedman and Eugene Fama, who believed that "a corporation’s share price is always the accurate reflection of the enterprise’s worth", an idea that, with time, morphed into this other one: "The proper goal of a corporation is to boost its share value. [in the context of our discussion, token value]".
The Shareholder Dogma is best illustrated by the work of people like Jack Welch, also known as "Neutron Jack", who went above and beyond in order to maximize shareholder value.
This strange notion that the interests of token holders should come first has created a bit of an unhealthy climate on crypto forums, reddit, Telegram and other channels. Speculators - they can be a very vocal bunch - clamor for news, partnerships and rebranding campaigns, hoping these will affect, in a good way since the opposite is certainly conceivable, the price of the tokens they hold.
And thus, Corporate governance has had to deal with the most myopic, moronic, opportunistic, self-destructive, and pathologically asocial subset of token holders. This cannot be easy.
As you know, certain teams buck under the tremendous pressure exerted by the Crowd. Devs out there know how difficult it can be to resist a Crowd chanting for green Dojis. "When Binance?", "When Moon?": a Crowd can be a scary thing indeed.
“…if people crowd together and form a mob, then the dynamisms of the collective man are let loose – beasts or demons that lie dormant in every person until he is part of a mob. Man in the mass sinks unconsciously to an inferior moral and intellectual level, to that level which is always there, below the threshold of consciousness, ready to break forth as soon as it is activated by the formation of a mass.” (Carl Jung)
The clamor of the Crowd has led teams to re-allocate resources in a non-optimal manner - in order to keep things "exciting" for those who dream of Lambos on the Moon. This is all very short-sighted and "dialectical" in nature as pleasing the Crowd, always hungry for more green Dojis, never satisfied, sometimes turns out to be detrimental to other stakeholders and the Crowd itself.
If you liked this very short article, you can choose to support me as I plunge into the crazy world of Crypto Governance.
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References
Le Bon, Gustave. "Psychology of Crowds", Sparkling Books edition, 2009.
R. Straub, “Shareholder Value – A Theory that changed the course of history – for the better or the worse,” Drucker Society Europe, June, 2012.
Jensen and Meckling, “Theory of the Firm: Managerial Behavior, Agency Costs and Ownership Structure”, Journal of Financial Economics, October 1976.
Lynn Stout, “The Shareholder Value Myth”, Harvard Law School Forum, June 2012.
Yves Smith, “Maximize Shareholder Value”, Naked Capitalism, May 2014.
Diane E. Davis, “Political Power and Social Theory”, MIT, Cambridge, 2005.
Steve Denning, "The Dumbest Idea in the World", Forbes, November 2011.
Yvan Allaire, “Activist Hedge Funds: Creators of lasting wealth, What do the empirical studies really say?", Institute for Governance of Private and Public Organizations, July 2014.
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