How can you use on-chain voting for Web3 governance?

Let's make it simple. Proof of the truth blockchain brings literally says: "none of us is as trustworthy as all of us". So, being fully transparent and permissionless, blockchain voting allows people to find, manage, and track the truth in the most advanced manner ever created in human history. We should anticipate the narrative - chain, or didn't happen.

On-chain voting involves recording and verifying voting actions directly on a blockchain. In simpler terms, it utilizes a blockchain, which is a decentralized and secure digital ledger, to facilitate and oversee the voting process.

On-chain governance is a decentralized framework that allows the users of a blockchain network to vote on any updates or improvements of the underlying protocol. Rather than relying on a centralized authority, many blockchains have delegated communities that manage the processes of protocol enhancements and fixes.

On-chain voting is a method used in blockchain technology where stakeholders make decisions about the network's future through a transparent and secure voting process. Participants cast their votes directly on the blockchain, ensuring that each vote is recorded immutably and transparently. This method is often used in decentralized autonomous organizations (DAOs) and other blockchain-based projects to make decisions on governance, protocol changes, or resource allocation. On-chain voting leverages the inherent security and transparency of blockchain, offering a democratic way for participants to influence the direction of a project.

On-chain voting in Web3 governance leverages blockchain for decentralized, transparent decision-making. It allows stakeholders to vote directly, often based on token holdings, ensuring decisions reflect the community's interests. Votes are recorded on the blockchain, offering transparency and security, with results being immutable and publicly verifiable. Smart contracts automate the execution of decisions, enhancing efficiency and reducing costs. This system enables global participation, fostering diverse input and engagement. On-chain voting can be customized to suit specific needs, like quadratic voting to balance influence. It encourages active community involvement and allows governance.

"Loudest voices can't overshadow a single, immutable version of the truth, based on public blockchains" - Deloitte says This is why determining the project's path by on-chain voting is the most fair way in existence. You know, that the truth - is the system itself.

On-chain voting is preferred for Web3 governance because it offers: Transparency: Clearly records and verifies voting on the blockchain, fostering trust. Security: Blockchain's decentralized and cryptographic features enhance voting integrity and resist tampering. Accessibility: Allows a global audience with an internet connection to participate, promoting inclusivity. Decentralization: Aligns with Web3's decentralized philosophy by removing central authorities and empowering participants.

On-chain voting is not always the best choice for Web3 governance. Some projects do not lend themselves to full decentralization, for others it can take years until they are ready (both technically and logistically for this). For the projects that ARE ready AND want to be truly decentralized, on-chain voting is the only viable option. So in a nutshell, the core questions any Web3 project needs to answer are: - Do we want to be decentralized? - Can we be decentralized? - When is the proper time to be decentralized?

On-chain voting revolutionizes Web3 governance with its unparalleled transparency and efficiency. Every vote is a blockchain entry, ensuring it's tamper-proof and transparent. This method cuts out middlemen, streamlining decision-making. It's inclusivity in action, welcoming voices from across the globe, regardless of who they are or where they're from. Plus, it's a playground for innovation, constantly evolving governance models to best suit the community's needs. It's not just voting; it's shaping the future of Web3.

On-chain voting brings following benefits - Authenticity - no bogus voting (discussed above) - Verifyability - any one can verfify the votes - Immutability - votes ones cast cannot be changed Community governance takes a whole new meaning in #web3 with on-chain voting which is not possible in web2. Think loyalty programs and how it becomes possible in web3 to involve fans in deciding the future path for the brand.

Implementing on-chain voting requires understanding blockchain technology and smart contracts. This complexity may limit the participation of non-technical community members.

People get disengaged. People get lazy. People get distracted. Keeping everyone engaged in the voting process is the challenge many projects have been struggling with.

There are several challenges here, but one, in my view is the main one - Speed. A lot of projects require fast decision taking in the changing market and regulatory landscape. On-chain voting takes time. If there is a bug in the code, or a black swan market event happens, you want to be able to react fast and adapt to the current situation within hours and not days/weeks. On the other hand if you implement exceptions to rules in your on-chain voting procedures, for those kind of events, they can be used as loopholes to undermine the whole idea of on-chain voting.

While token holders have the opportunity to become an active driver of strategic decisions for a project or brand, there are several challenges to maintaining on-chain voting for governance purposes, such as - Quality of decision: Voters may not have sufficient information or understanding of the proposals they are voting on, leading to uninformed or misguided decisions. - Distribution of power: Often voting rights are tied to the amount of tokens held. Therefore, it's a good idea to have thoughtful voting rules and processes in place before launching such initiatives.

For on-chain voting to be successful it is importnat to - Have a clear strategy on governance tokens and voting powers - Choice of blockchain - speed, security, level of decentralisation - Robustness of smart contracts - must be tested extensively for the purpose and audited for security as they can be hacked Above, if not executed diligently, can create serious challenges during the voting process.

On-chain voting is a method of decision-making that uses the blockchain as a source of truth and a medium of execution. On-chain voting allows participants to submit and cast votes on proposals that affect the rules, parameters, or features of a Web3 protocol, platform, or community.

Create smart contracts to manage the governance process. These contracts should define the rules of the voting, including voting eligibility, duration, and decision-making criteria.

Four core components to this one: - Goals - Process - Incentives / penalties - Controls Define what goals you want to achieve using voting (full or partial platform management). Design processes that focus on those goals. Determine incentives for participation and penalties for bad actors. Implement controls that monitor of the goals are being met and if not decide how the process can be adjusted.

Ethereum has been exploring on-chain governance mechanisms. Ethereum Improvement Proposals (EIPs) are discussed and, in some cases, voted upon by the community. The decision-making involves the Ethereum Improvement Proposal process, which includes on-chain signaling.

MakerDAO: This decentralized finance (DeFi) platform allows MKR token holders to vote on crucial decisions like stability fees and collateral types for its DAI stablecoin. Compound: A leading DeFi lending platform where COMP token holders vote on protocol changes, such as adding new assets or adjusting interest rate models. Aragon: Provides tools for creating and managing decentralized autonomous organizations (DAOs), where participants can vote on organizational decisions, budget allocations, and other governance issues. Decentraland: In this virtual world, LAND and MANA token holders vote on policy updates, land auctions, and content curation, influencing the platform's development and community guidelines.

On-chain voting is making waves in Web3 governance, with platforms like MakerDAO, Compound, and Uniswap leading the charge. In MakerDAO, users wield MKR tokens to steer the stablecoin DAI, ensuring its stability and efficiency. Compound leverages COMP tokens, giving users a say in key decisions about interest rates and collateral. Uniswap, with its UNI tokens, empowers its community to guide the protocol's growth and sustainability. This isn't just voting; it's stakeholders actively shaping the future of finance in the digital world.

Onchain voting is effective when it is part of a process that has coordination elements. Human coordination, education and correction is still necessary, meaning before going on-chain voting, you can discourse, iterate and even hold a soft consensus to make sure. on-chain voting works without creating fatigue