Stephanie Hurder: The Fourth Era of Blockchain Governance

If you follow our writing at Prysm Group, you know one of our mantras is that governance is essential for the long-term survival of blockchain projects.

Governance enables blockchain projects to continually innovate, upgrade their protocols and adapt to changing market conditions while maintaining the desired level of decentralization.

The original blockchain projects, such as Bitcoin and Ethereum, had no formal governance.

After a briefing I gave two weeks ago jointly with Mark F. Radcliffe, Partner at law firm DLA Piper, I believe we have entered Era 4: the era of systemic governance design.

Systemic governance design also takes a ground-up approach based on first principles while explicitly considering the ways in which a project's governance must be designed to work in harmony with the governance of other projects in the blockchain ecosystem.

Enterprises considering deploying blockchain solutions want to know how various platforms and their governance designs function in sum, so they can minimize unnecessary uncertainty and deliver on their project goals.

Understanding the governance of the underlying technologies the consortium is using and the impact it will have on a consortium's own governance also is essential.

Including more sophisticated steps such as soliciting and distributing expert feedback on proposals, introducing mechanisms to ensure timely implementation of upgrades, and having well-defined crisis governance with clear delineation of decision-making all increase the probability that governance will be reliable.

While blockchain governance best practices are rapidly evolving, there are frameworks projects can use to minimize the prospect of overlooking essential elements.

All blockchain consortia should recognize that governance practices are evolving and should pay particular attention to the processes for changing governance procedures.