Governing Decentralization: How On-Chain Voting Protocols Operate and Vary

Published on by Cointele | Published on

This is called on-chain governance, a formalized way in which a group of people can make changes by voting through the protocol.

In Bitshares, BTS owners get to vote on several things: block producers, Proxies, committee members who manage a few blockchain parameters and have control over required transaction fees, and funding the development of future BitShares Improvement Protocols.

In Bitshares, BTS owners vote to fund the writing of BitShare Improvement Protocols.

There have been rare occasions where the voting system has been used.

How might they properly encourage voting? Or, how can a secure blockchain be ensured with governance that won't be exploited? In regard to voting, how much power should be given to coin owners? Should they to be delegated? And how much influence in the network should delegates have?

Decred incentivized voting through 30 percent DCR block rewards.

Dash combined voting with mining by creating a high threshold to be met before the becoming a Master Node.

Steem and Bitshares allowed delegation of votes, yet the former restricts it only to delegates while the latter allows voting in other areas.

Decred's subsidies consisted of 10 percent of the block rewards, which DCR owners can vote on how to use.

Dash's subsidies also consist of 10 percent of the block rewards which Master Nodes vote on how to spend.