On February 26, 2024, at 1 PM UTC, Eric Zhang participated in the X Space event hosted by BNBChain, which focused on the topic of Decentralized Governance. Below is a summary of the entire discussion.
MC: Introduction and simple brief (1-2min) of each project by themselves
Eric: Thanks Mehmet, and it’s my great pleasure to join the BNBChain X Space to discuss decentralized governance. A lot of people probably know DoraHacks. Dora Factory originated from DoraHacks, the global hackathon community and one of the most active Web3 developer incentive platforms. Dora Factory tries to provide solutions to an important problem of Web3 open source communities and ecosystem funding - that is how can we make open source funding more sustainable? Because it’s crucial for the development of Web3 and more generally open source communities as a whole.
Dora Factory builds two products to address this, the first one is public good staking. The idea of public good staking is to incentivize blockchain and more generally, open source and hackathon communities with native block incentives. Currently Dora Factory PGS is validating more than 30 blockchains - L1s and appchains, it’s one of the fastest growing staking infrastructure.
Another product is Dora Vota - a decentralized governance appchain that hosts advanced governance technology - to improve funding efficiency through effective and effieicnet decentralized governance.
MC: Could you provide a brief introduction to decentralized governance for those who might be new to the concept?
Eric: When you have decentralized financial infrastructures like layer-1 blockchains, or decentralized applications like DAOs, you have a decentralized community, and the community is scattered, distributed, and they could be from anywhere in the world. So how do you make important decisions? That is where decentralized governance comes, where, it's a wide range of technology and protocol stack that enables people to make collective decisoins in a decentralized environment.
For example, there are uniquely blockchain-native mechanisms that we can build for decentralized communities, such as Futarchy - governance decisions made based on a prediction market.
MC: How does decentralized governance contribute to the evolution of blockchain technology?
Eric: I think dGov technology’s spirit is consistent with blockchain tech itself. The blockchain consensus protocols are designed to coordinate a distributed network of machines, and you have decentralized financial infrastructure. dGov protocols are coordinating people in decentralized communities, and help reach consensus among these people. But you know, blockchain protocols are maintained by people, so dGov is important. One example to illustrate this is in the early days, you had a couple of blockchains, and if people have disagreement over some important issue, you have a hard fork, you saw this during the DAO Hack Hardfork, and the Bitcoin / BCH hardfork. There’s no governance, so if there’s a major disagreement, hardfork is the only way you can go with.
But with dGov protocols, people can reach consensus on the human level, and in decentralized communities, this is a big progress, and it in turn contributes to a new generation of blockchain technologies, and partially, that’s in line with the multi-chain and appchain movement, now users can choose their favorite chain and favorite communities to skin in the game, this is largely because of the development of decentralized governance, and we are in a very early stage of this movement.
MC: Can you share an example where decentralized governance has made a tangible impact on a project or community?[ALL]
Eric: There are too many examples. As Dora Factory’s Public Good Staking validates many blockchain networks, we actively participate in governance in many ecosystems. There are a lot of day-to-day issues, like routine software upgrades, recovery of IBC channels, etc., and there are also hot topics that spark debates.
Two weeks ago, our proposal on Injective (prop 341) passed, in which we proposed to deploy a quadratic funding smart contract and start injective-native quadratic funding rounds. The proposal was passed with an overwhelming turnout and passion from the injective community.
Of course there were bigger ones, like the controversial CosmosHub prop 848, which reduced inflation from 20% to 10%, which was passed. There were also big debates during the Cosmos ATOM2.0 proposal, which didn’t pass. However, the point is, people can move on together right? In the case you really don’t like it, you can always sell your token and join another community. But decentralized governance brings people together.
MC: What trends do you see emerging in decentralized governance, and how might these trends shape the future of blockchain technologies?[ALL]
Eric: I think I cannot speak for the whole industry, but for us, the development of zero-knowledge proofs and how they can be used in decentralized governance is important. Dora Vota currently develops a general interface for MACI, with zero-knowledge proof, we can make voting and decentralized governance privacy preserving, and collusion resistance.
ETHDenver adopted MACI pretty early in 2022 to help incentivize the hackathon BUIDLs, during that voting event, Spork DAO holders were whitelisted and they were able to vote anonymously, the final results were validated with a zero-knowledge proof. After that, there were more and more MACI use cases in open source funding, such as 0x hackathon, Opensea & Replit hackathon, and now with Dora Vota, we are bringing the cost of deploying this kind of governance technology, MACI voting rounds much lower, so even very small community could use this technology.
MC: How do regulatory considerations influence the design and implementation of decentralized governance models, and how are you navigating these challenges?[ALL]
Eric: I think dGov tech is helping the situation here and over time it will be one of the most important things to make sure that Web3 protocols are actually decentralized and they are autonomous enough and the self-governing community can protect the users and deliver what was promised in the long term. dGov is probably the most important technology to ensure that.
About DoraFactory & Dora Vota
Dora Factory creates protocols, tooling, and public goods infrastructures that help open source communities and frontier tech builders to thrive. Dora Factory is one of the fastest-growing PoS validators, with over $300M in TVL.
Learn More: https://dorafactory.org/
Official X: https://twitter.com/DoraFactory
Dora Vota is a special-purpose blockchain for voting and decentralized community governance. Vota is bringing native Quadratic Funding to the Cosmos Hub for the first time.
Learn More: https://research.dorahacks.io/2023/07/31/vota/