The Importance of Blockchain Governance
Blockchain governance can be defined as the process by which stakeholders (people who are affected by the network and can affect the network) exercise their bargaining power on the network. Blockchain governance helps to “Realize the direction, control and coordination of stakeholders in the context of a given blockchain project.”
The importance of governance (Personal Opinion)
• The governance of blockchain projects is crucial for their sustainability because it allows stakeholders to discuss and formulate the decision on how the blockchain should develop and evolve. Effective blockchain governance is also crucial to the successful implementation of the blockchain and its adaptability, interaction and change. Because Blockchain projects are large-scale and governance is particularly prominent, it is of utmost relevance to manage and coordinate the entire community towards a common goal.
• The introduction of effective governance has a significant impact on the cryptocurrency market. It has really increased transparency and opens the door for more institutional investment in this area. In the previous years where governance in blockchain was not a common thing, due to the significant risks, volatility and uncertainty surrounding crypto projects, many crypto investors have been on the sidelines. But with improved governance through the correct disclosure and information requirements now, investors are now more willing to participate in the offering.
• The importance of blockchain governance is further highlighted in recent governance issues encountered by public blockchains. In 2016, Ethereum Blockchain faces a governance crisis, when exploit vulnerabilities in the source code of “DAO”, Applications created on the Ethereum blockchain, resulting in the theft of Ether equivalent to 50 million US dollars. In this dispute, the core developers of Ethereum finally decided to return the stolen ether through a hard fork. Not everyone agrees with this decision to divide the Ethereum blockchain into two parts. These reports illustrate why blockchain governance is a key aspect for stakeholders in the blockchain field.
Safesnap — My proposed governance tool for covalent
Gnosis launched the first decentralized governance toolkit integrated into Gnosis Safe, aptly named SafeSnap. Since Gnosis multi-signature wallets have become the preferred way for many DeFi projects to manage their ETH-based assets, having native integrated governance tools that can interact with community funds makes this product a perfect fit. With this new feature of Gnosis Safe, the team believes that Gnosis Safe will become an operating system for autonomous decentralized organizations or DAOs.
SafeSnap combines Gnosis Safe with the Snapshot governance platform. By integrating these two popular tools, Gnosis creates another important infrastructure for the decentralized technology ecosystem. It has joined a group of early adopters, including Yearn, SushiSwap, Synthetix, Balancer, mStable, PoolTogether, dHedge, BrightID, Stakewise, EPNS and GnosisDAO.
I strongly suggest that covalent should see how they integrate the SafeSnap module into their existing operations. By using SafeSnap, the protocol will allow your communities to perform trustless on-chain execution based on the results of off-chain voting via Snapshot. With Gnosis Safe as the main component, you can see the following progressive decentralization path:
• Gnosis security and snapshot, where the multiple signatures promise to act according to the off-chain vote. This is the current status quo.
• Gnosis Safe, Snapshot and SafeSnap, where the on-chain execution of off-chain voting is handled by the SafeSnap module, but there are still multi-signature owners who can veto malicious behaviour or take quick action in emergency situations.
• Gnosis Safe, Snapshot and SafeSnap, where the owner of multiple signatures has been removed, and the only way to execute the transaction is through the SafeSnap module.
In conclusion, SafeSnap has passed rigorous internal testing and has also passed a successful audit and as such, I would like to see covalent make use of it.