– TIMESTAMPS –
0:00 Intro
2:22 Power Of Community Governance
4:47 Off-Chain Governance
8:02 On-Chain Governance
12:07 How DAOs Can Replace Governments
15:42 DAOs And Decentralized Identity
18:11 Conclusion
About 100 years ago, it was popular for communities in some western countries to form fraternal or โfriendlyโ societies to collectively fund their own healthcare. A single dayโs wage could cover a yearโs worth of basic medical care. Unfortunately, these societies disappeared due to government regulations
๐โโ๏ธOff-Chain Governance๐โโ๏ธ
Off-chain governance is common among proof of work cryptocurrencies such as Bitcoin, Litecoin, Monero, and also Ethereum for the time being.
One off-chain governance process some of you are familiar with are improvement proposals posted by crypto community members on GitHub for everyone to see and discuss
If you want to make a big change to a proof of work cryptocurrency like Bitcoin, the economic majority must be in favor of the change. This includes Bitcoin miners, Bitcoin developers, and also BTC holders
โOn-Chain Governanceโ
On-chain governance is common among proof of stake cryptocurrencies such as Polkadot, Solana, Terra, and eventually Ethereum after 2.0 rolls around
That said, on-chain governance is not limited to cryptocurrencies. On-chain governance is frequently leveraged by decentralized applications, especially DeFi protocols
Smart contracts which define and enforce the requirements for tabling, passing, and rejecting proposed improvements. Some of these set ups can be extremely elaborate as they are entirely on-chain
๐จโ๐ปHow DAOs Can Replace Governments๐จโ๐ป
According to Ethereum founder Vitalik Buterin, the main thing thatโs missing from cryptocurrency governance structures is a mechanism for properly funding public goods
Public goods are the things that governments are supposed to provide. This includes stuff like roads, bridges, police, firefighters, military, elections, regulations and various administrative practices
One solution is quadratic funding which is based on the idea that if multiple people are allocating money to a particular thing, that thing is worth more than the sum of the money being poured into it
๐DAOs And Decentralized Identity๐
Rather than entrust the user verification mechanism to a centralized party, we can use decentralized identity solutions instead
Though there are many cryptocurrency projects currently working on this, they all work in more or less the same way, and thatโs to have someone else using the app or dApp verify your identity
This can be something as simple as meeting up in person or having a video call online, and many of these decentralized identity solutions donโt even require any form of ID.
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๐ Disclaimer ๐
The information contained herein is for informational purposes only. Nothing herein shall be construed to be financial legal or tax advice. The content of this video is solely the opinions of the speaker who is not a licensed financial advisor or registered investment advisor. Trading cryptocurrencies poses considerable risk of loss. The speaker does not guarantee any particular outcome.
