Report: Cardano Ecosystem Has A Complex Governance Structure

A report said that the Cardano (ADA) ecosystem has a complex governance structure, not dissimilar from the way the US democracy operates, with its built-in checks and balances. 

It has been reported that according to the Foundation’s incoming CEO Frederik Gregaard, there are three main players: the Cardano Foundation, EMURGO, and IOHK, where the governance will only get more complicated as more organizations join. 

However, he also said that he intends to maintain the Foundation’s independence from Cardano’s founder and IOHK CEO, Charles Hoskinson, who created this structure in the first place.

He added:

“The Foundation law in Switzerland says that we need to be independent. That’s exactly why it’s interesting and why Charles chose to set it up like that, because he really, truly feels that the people who are going to protect the Cardano protocol for the generations to come, need to be independent.”

As per the report, the Foundation’s mission is the advancement of “the Cardano protocol.” It also retains a development company for the protocol, which is currently IOHK, though its contract expires later this year. With the Voltaire era scheduled for release in a few months, the community will soon vote on whether to extend IOHK’s contract. In the unlikely event that IOHK fails to secure the backing of the community, another development company will be hired to take their place.

Gregaard accepts that Hoskinson is more than just the head of Cardano’s development company and there may be times when they will butt heads over the direction of Cardano’s development.

He said:

“Charles did initiate the project together with one of his colleagues. So, there’s no doubt about how brilliant he is and how visionary he is. But he’s running a product company that needs to deliver products. <…> I’m sure that there are going to be some fights in terms of priorities and some spots where we believe, together with the community maybe, that we should go a bit more right and Charles wants to be a little bit more left and we need to agree on that together.”

Also, he said that having worked with Hoskinson for the past 6 to 12 months (as a PwC consultant), he has a good feeling about this relationship, though he does not expect it to be easy.

Thus, Gregaard is a big supporter of decentralized governance, as, for him, this presents a viable alternative to the current state of the world, where Facebook and Google manipulatively exploit their users.

Source: Cointelegraph

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New Compound Governance To See All Future COMP Token Distributions Locked In A Vesting Schedule

A new Compound governance proposal from Tarun Chitra, the founder of Gauntlet, would see all future COMP token distributions locked in a vesting schedule.

It has been reported that the proposal was submitted on Wednesday and highlights several ways that the vesting could be implemented.

However, one would involve discrete vesting where the tokens could be claimed at periodic intervals, while another proposes “continuous vesting” that frees tokens gradually as they reach maturity.

According to the report, either solution would be in stark contrast to how the reward system is set up right now, where the vesting time is effectively zero.

While COMP is not immediately distributed into user wallets, it can be claimed at any point in time either by interacting with the protocol or explicitly calling a claim function, as this is mostly a gas-saving measure.

It has been analyzed that with no vesting, yield farmers can simply pool their liquidity to earn COMP and immediately sell it on the market. This has resulted in a somewhat perverted incentive that goes against the stated purpose of the COMP distribution.

Moreover, the idea behind it is to distribute ownership and governance of the platform to its users, but in reality, the distribution is currently dominated by whales that are looking for an instant profit. 

By adding vesting would discourage “purely capitalist yield farmers,” as Robert Leshner, the CEO of Compound Labs, referred to them, from committing their capital to the protocol for a short-term gain.

Likewise, if the proposal were to pass, it could have a powerful effect on the current DeFi ecosystem.

While Compound is rarely the most remunerative yield farming protocol, it has been the most stable and high volume source of yield, largely due to its relatively steep distribution curve and high market capitalization. 

It has also been analyzed that tightening the yield tap through vesting could result in much of the capital unwinding, sending Compound and likely Maker’s total value locked downward. 

Due to a somewhat widespread belief that TVL reflects the protocol’s success this could result in token prices going down as well. On the other hand, the selling pressure would be lowered significantly, which could have a counterbalancing effect.

Thus, the decision would significantly limit a major portion of total liquidity mining revenue, most likely affecting all other protocols in some way.

Source: Cointelegraph | Image: Cryptocurrency Hub

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Huawei and Beijing’s Municipal Government Jointly Develops Blockchain Directory Across Urban Governance

Huawei and Beijing’s municipal government have jointly developed a blockchain directory to use across urban governance.

On August 24, it has been reported that the system, which still being trialed, is aimed at improving government services and supporting the city’s business environment. 

However, interest in blockchain technology forms part of Beijing’s research into smart city approaches to enhance urban innovation and governance. 

Other technologies being explored for smart infrastructure include 5G, artificial intelligence (AI), and cloud computing.

It has been analyzed that throughout 2019, Beijing and Huawei have jointly built a blockchain system directory to link up the city’s 50 municipal departments and support cross-departmental sharing and management of big data.

The report said that the system’s applications span real estate management by enabling efficient communication and feedback between the citizens and the mayor’s office, road parking services, medical care, notably including pandemic response services, and utility provision (water, gas, and electricity).

Likewise, Beijing’s government said that ordinary people are poised to become the direct beneficiaries of the new infrastructure.

Huawei’s role in the directory is contributing its proprietary Huawei Cloud Blockchain, as the system supports real-time data management and feedback, rights management, data synchronization and exchange, permissioned access management, and traceability.

Thus, the report stated that the use of blockchain technology will play a key role in integrating new-generation technologies into the strategic goals of urban modernization and digitized municipal services.

Source: Cointelegraph | Image: BiteMyCoin

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Equilibrium Adds Four Block Producers To Its Governance System

Equilibrium, an EOS-based DeFi project, has added four block producers to its governance system, to make use of the blockchain’s smart contract upgrade features.

The members include:

  • Binance
  • Eosfinex
  • EOS Nation
  • EOS Cannon

It has been reported that the group of four will act as “governance supervisors” for the system, as their primary purpose is to sign off on smart contract upgrades for Equilibrium.

Alex Melikhov, the CEO of Equilibrium, said:

“One of the main advantages of EOS lies in updatable smart contract code. In other words you can migrate to new versions of your application seamlessly without hard stop of the whole system.”

However, this approach is different from Ethereum, where new iterations of DeFi protocols generally require a complex migration procedure. The old versions may eventually be shut down to avoid security risks, as was the case with Maker’s single collateral Dai, or they may be left to their own devices, like with Uniswap V1.

It has been analyzed that supervisors hold portions of a multi-signature key, which is used to authorize upgrades to the ecosystem.

Melikhov said:

“They are chosen among the most known and reliable ecosystem participants who could bid their reputation on the integrity and relevance of the smart contract updates.”

He noted that the decision to include new entities rests with all existing council members, and not just Equilibrium.

Likewise, this approach is an interesting middle ground in the world of DeFi. In many Ethereum-based projects, the founders of the protocol hold admin keys that give them special rights over the contract, a practice that the community frowns upon, as this is usually done with the promise of destroying those keys once the protocol is mature enough.

Melikhov said that Equilibrium’s governance is instead “already decentralized, though he conceded that it is not a fully trustless process that is secured by economic incentives or algorithms.

He explained that the project went for an alternative approach of “creating a proof-of-authority framework which consists of trusted counterparts that are independent according to their background.”

As per the report, there are no plans to destroy these upgrade keys, as that would imply missing out on EOS’ added possibilities. This approach fits within the wider context of EOS governance, which is based on agreements between specific stakeholders.

In addition, a Binance representative said that the exchange considers EOS a “promising blockchain for DeFi development,” especially for its cross-chain capabilities.

Given that EOSDT recently integrated Bitcoin (BTC) as a form of collateral, the company sees a place for the exchange’s token as well:

“We hope to see our BNB token as an asset integrated into more DeFi apps, and we think it can be introduced as a new type of collateral for the EOSDT stablecoin at some point.“

The spokesperson explained that Binance’s addition as a supervisor does not require the ownership of NUT, Equilibrium’s governance token.

Thus, the exchange seems to be incentivized to see the project succeed.

Source: Cointelegraph | Image: The Equinix Blog

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