How Blockchain Voting Is Supposed to Work

Already, decentralized applications including MakerDAO and Aragon, along with entire blockchain networks such as Tezos and Cosmos, have already completed multiple rounds of token holder voting enabling key protocol-level changes for their respective projects.

At the same time, common concerns such as low voter turnout and "Whale" voting - in which one large token holder effectively decides the outcome of a vote - have caused internal governance disputes about the true efficacy of on-chain governance.

Santi Siri, the founder of non-profit Democracy Earth, which created an ethereum-based governance token called Sovereign, argued that "The fundamental problem of blockchain voting today or blockchain governance today is that 100 percent of it is plutocratic."

Speaking to the concern of whale voting which did reverse the outcome of at least two out of nine governance proposals on ethereum application Aragon, CEO of developer group Aragon One Luis Cuende told CoinDesk the matter was non-issue.

For Cuende, there are many improvements to the token holder voting system that can be experimented with that over time will ensure fairer voting outcomes.

Precisely for these reasons, Siri argues that a democratic form of governance may be viewed as more legitimate by users and other stakeholders of a blockchain network.

For the reasoning that democratic systems of governance on a blockchain are still largely in a nascent research phase, Cuende maintains that while imperfect, a simple system of majority token holder voting is the best solution out there for on-chain governance at present.

Head of core community at leading decentralized finance application MakerDAO, Richard Brown, also agreed that governance on the blockchain while being "a capital H hard problem" presents unique possibilities that traditional forms of governance wouldn't have access to.

"What I'm most interested in are audit trails and visibility and tracking behavior over time in a way that's immutable," highlighted Brown about the strengths of putting governance systems on a blockchain.

"It's less about blockchain governance and more about an open source way of organizing."