Governance in Decentralized Autonomous Organizations (DAOs)
Governance in Decentralized Autonomous Organizations (DAOs)
Blog Article
Introduction
Decentralized Autonomous Organizations (DAOs) rely on governance mechanisms that enable decision-making without a central authority. Governance in DAOs is a critical component that ensures collective control, transparency, and efficiency.
What is DAO Governance?
DAO governance refers to the system by which decisions are proposed, voted on, and implemented within a decentralized organization. It replaces traditional corporate hierarchies with community-driven decision-making.
How Governance Works in DAOs
On-Chain vs. Off-Chain Governance
- On-Chain Governance: Decisions and votes are executed directly on the blockchain through smart contracts.
- Off-Chain Governance: Discussions and decisions take place outside the blockchain before implementation.
Voting Mechanisms
- Token-Based Voting: Members vote based on the number of governance tokens they hold.
- Quadratic Voting: Reduces the influence of large stakeholders.
- Delegated Voting: Token holders delegate votes to representatives.