How to participate in the governance of decentralized projects? Do these three homework first

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Avatar for Hakpabior
3 years ago

My opinion:

The concept of decentralized organization Dao is particularly important in the currency circle. This article wants to discuss how to participate in the governance of decentralized projects.

First define what is governance.

A product or agreement needs to be upgraded iteratively, such as adding some new features, and doing marketing. All of these behaviors that make this product or agreement more valuable are collectively called governance.

The update of the currency circle products needs to be divided into two categories. One category involves compatibility, or modification of the consensus layer; the second category does not involve modification of the consensus layer.

Whether Bitcoin needs to expand or not is a big governance topic, which involves the revision of the consensus layer. If a unified opinion is not reached, it will cause division.

But this article does not want to discuss governance at the consensus level. This article wants to discuss the governance of projects like MakerDao, compound, uniswap, which have voting functions to determine how the project evolves.

Decentralized projects, such as uniswap, although there are core developers, the update of the project still relies heavily on community governance. The governance process can generally be divided into three stages: discovery of requirements, realization of requirements, and then promotion of requirements.

Governance tokens will play a role in the whole process. For example, if someone finds a need, they can initiate a vote and ask the developer to develop it.

The developer has developed a feature, in order to be activated on the chain, it can also be activated by voting.

Similar governance processes are common in uniswap and compound.

How can we participate in the governance of a project?

The first thing to answer is, why participate in the governance of a project? This project is probably not yours, and you are not even the biggest gainer.

The ability to participate in governance has commercial value.

The most direct is that projects generally have funds rewarded to those who contribute to the project, and governance is eligible for these rewards. But this uncertainty is great.

Governance capability is a kind of operation and maintenance capability, which can have a large curve to realize value. You can control the development direction of the agreement, there is no doubt that there is huge arbitrage space. At least, it is a huge help for investment.

At present, A16Z, a large investment institution in the currency circle, has a large number of governance token warehouses for these top projects of compound.

Governance ability also represents the status of the arena, which is value in itself.

If you want to participate in governance, I think you probably need to do the following things.

The first is to collect existing information.

In order to be eligible to participate in governance, it is best to read every detail of the project's official website, and it is best to have the ability to read all the codes. Find out the value of the project, technical details, and the status quo of the community.

At least you must complete the reading of the official website, and all the information about the important communities of the project, such as discord, forum, twitter, reddit forum, must not be let go.

The second is to collect potential governance directions, or to collect project requirements, to see what can be improved in the project. Evaluate the demand, study the feasibility of the realization of the demand, and study the realization value of the demand.

This process requires a lot of communication, including communication with community users, communication with developers, output of some text and even code work.

The third is to master some core resources related to the project.

For example, A16Z can participate in a large number of project governance, the main reason is that they are large institutions in the investment circle, influential, have capital, and control the voting positions of various projects.

Ordinary retail investors, those people and organizations without core values, basically have no opportunity to participate in governance.

If you have mastered its core resources for a project, you are generally able to influence the development of the project. For example, if you are a super large accountant on an exchange, the exchange will of course consider your opinion.

For a project, the common key resources are: professional knowledge, like the words of God V, must have a governance effect; influence, like CZ and AC, is also governance; capital, like the opinions of A16Z, the project party will listen.

There are also some unique resources of the project, such as uniswap. If you make a financial contract (similar to the uncle, Harvest) and master a large number of LPtokens, then you have a say in the development of the uniswap project. For example, if you have a large amount of cToken, the project side of the loan agreement under the comment will also listen to it.

When you have done the above three tasks, you should be involved in the governance of the project. As for the specifics of writing code, doing promotion, and participating in voting, they are all implementation details.


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