The best off-chain governance system

Recent attention to blockchain governance has encouraged people to think about governance systems in more detail. This article will explore different levels in off-chain governance.

Off-chain versus On-chain

The first step to analyze blockchain governance, is to distinguish two forms of governance: off-chain and on-chain.

Off-chain governance platforms

Blockchain projects such as Bitcoin, Ethereum or Monero aim to operate in a decentralized way. In practice, this means that there is no central control over their public blockchain. However, off-chain governance processes still need a platform where contributors can come together and collaborate. In many decentralized projects the question arises: how to organize off-chain governance in a robust and decentralized way?

Off-chain governance is about participation

Levels in off-chain governance

As stated, it is important to consider who to include into what. There are several levels of participation. Higher levels naturally have higher barriers.

Level 1: get in touch

To onboard people and help them out, chats work just fine: Slack, Discord, Matrix, RocketChat, IRC and such. Casual platforms like Twitter and Facebook also fit. Most superficial conversations are level 1 governance.

Level 2: interact with the community

Next, when people get around and have something to say, they have a choice. If it is something quick and not too important they can use chat. If they want to start a thoughtful discussion that will survive in history, it’s better to use something topic-based: Medium, Reddit, forums, or mailing lists.

Level 3: contribute work

An even higher level is if they have work to contribute: a good idea, a bug report, code, design, and so on. A platform similar to GitHub is necessary at this level, since you need an issue tracker to work more effectively.

Level 4: exercise power

The highest level is exercising power. This is “formal” off-chain governance. This level demands more from the people and the platform in use.

  • Data is timestamped and signed to verify integrity.
  • Decentralization: the platform must survive shutdowns with no data loss and minimum time to recover (easy to replicate).
  • It must be very expensive to overwrite content, which is achieved by anchoring data into a secure public blockchain.
  • Sybil-resistant voting system to make collective decisions.
  • Payment barriers to register and submit proposals. Note, we’re talking about small amounts to combat sockpuppets and spam.
  • Balanced approach to malicious behavior. Transparent, publicly provable censorship to strip outright spam, and at the same time prevent silent censorship like on Twitter and Reddit.
  • For proposals funded by digital currencies: ideally, disbursements are automated and control is decentralized.

Conclusions

All blockchain projects are governed, although some governance systems are more visible than others. This article has explored four levels in off-chain governance: getting in touch, interacting with the community, contributing work, and exercising power.

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