Home AI Many DAO and Web3 projects are ‘decentralization theater’: Tezos co-founder

Many DAO and Web3 projects are ‘decentralization theater’: Tezos co-founder

0
Many DAO and Web3 projects are ‘decentralization theater’: Tezos co-founder

Source: news.google.com

Tezos co-founder Kathleen Breitman says many Decentralized Autonomous Organizations remind you of high school.

“The way I see most of these DAOs fail, is like they basically act like a really bad school project,” he said. “When I was in high school, I was always the person who ended up doing the work on the school project, so I’m very sensitive to this dynamic.”

Breitman said that a DAO can quickly become a more involved member of the decision-making process than their peers, and He warned against putting people in a position of power that gives them the authority to overturn decisions once members of a DAO have stepped in.

Voting is one element of the DAO’s role, but ratifying an agreed measure is just as important, he said.

“If you don’t have any kind of way to algorithmically or programmatically enforce the decisions made by the group, you’ll end up trading one gregarious character for another,” he said in the latest episode of deciphergm’s podcast “That’s no way to govern anything.”

A DAO is a flat business structure based on blockchain technology where people come together to make decisions through smart contracts, be it funding startups, buying NFTs, or even offers in a historical print of the constitution of the United States.

They are sometimes described as “group chats with bank accounts” running on Web3. Breitman agrees that the governance process behind many Web3 projects can often be mediocre.

“Many blockchains and DAOs are run as suggestion boxes,” he said.

Integrating decentralization into the structure of a Web3 project is key to its longevity, Breitman said, even if it means there is no central figure who can capture mainstream attention. He explained that enforcing decisions programmatically through votes with the Tezos ecosystem has kept people engaged.

“Because your vote really has a consequence, and it’s not just a suggestion box, people are automatically empowered,” he said. “I think it’s that empowerment that really drives people to participate in the process.”

Tezos protocol updates submitted by developers are approved by votes of people who own the cryptocurrency. The system is built in a way that prevents it from being susceptible to a hard fork, which happens when a contentious upgrade to a blockchain causes it to go off on two separate paths, as it did with Ethereum and Ethereum Classic.

Tezos is the cryptocurrency ranked 46th by market capitalization according to CoinGecko, with a collective market value of $924 million. It reached an all-time high of $9.12 in October of last year and is currently trading at $1.01 as of this writing.

Breitman claimed that many projects on Web3 are engaged in “decentralization theater,” representing themselves as entities that embody the core ideals of crypto, but prioritize mass participation over organically growing communities.

“We’ve had a lot of tourists in this space launch different tokens, and then they have these really aggressive programs that provide high returns for people to participate in these ecosystems,” he said. “And at some point…the money box shuts down because the momentum stops building up.”

Stay on top of crypto news, get daily updates in your inbox.

Read More at news.google.com