A truly decentralized system would decentralize authority — Cardano exec

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As a seasoned analyst with years of experience in the blockchain industry, I find myself drawn to the progressive approach taken by Cardano Foundation in embracing decentralized governance. Having witnessed the evolution of various blockchain projects, it is refreshing to see a large-scale project like Cardano fully committing to onchain governance and positioning itself as a leader in this space.

In the spirit of Web3, decentralized governance is a key aspect of these systems. However, an executive from the Cardano Foundation acknowledged that there are hurdles to overcome when striving for a fully decentralized setup.

At the Cardano Summit in Dubai, Cardano Foundation’s executive, Giorgio Zinetti, explored both the advantages and hurdles of decentralized decision-making within Web3 networks. He underscored Cardano’s dedication to governing through on-chain mechanisms.

As a crypto investor, I’ve taken note of Zinetti, the CTO of Cardano Foundation, highlighting Cardano as “the biggest layer-1 with onchain governance.” This distinction sets Cardano apart among large blockchain projects, as it is one of the few that have successfully implemented this model in full.

“We like to think about ourselves as the largest DAO in the world. Now, the community can choose the direction the chain is taking by voting.”

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According to Zinetti, other significant blockchain networks tend to adopt a “more centralized model for governance.

The pros and cons of decentralized governance

In the realm of blockchain technology, Zinetti acknowledged that while decentralization is a key objective, it’s important to understand that there are pros and cons when comparing centralized and decentralized systems. Specifically, Zinetty pointed out to CryptoMoon that decisions can be executed more swiftly in centralized systems.

In simpler terms, he pointed out that a centralized structure is efficient for swift action, but to truly embrace a decentralized system, power and decision-making should be dispersed as well.

Zinetti also believes this will give Cardano much more credibility and long-term sustainability. 

“In the short term, it will slow us down because the decision will be made not by five people in a room but by a million people sitting all over the world. But I think in the long term, it will pay off and will ensure the best of the community that the incentives are aligned for every participant.”

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In the viewpoint of Zinetti, a decentralized governing structure empowers the Cardano platform to prioritize the needs and desires of its community over those of venture capitalists, powerful stakeholders, or individuals with ulterior motives (secret agendas) or inflated egos.

The challenge in involving more people

One issue with decentralized governance, as pointed out by Zinetti, is encouraging a diverse group of individuals to take part in decision-making and equipping them with knowledge to make well-considered decisions. He highlighted the necessity of educating voters about the matters at hand to ensure that decentralized governance operates efficiently.

“You need to educate the participants to make the right decision. And this takes a lot of effort. And if you want to be successful, we need to have high participation in governance decisions. We cannot have only a few tokenholders to vote.”

As an analyst, I’m excited to share that Cardano is taking proactive steps to foster informed voting within its community. This involves organizing educational events to enlighten members about the voting process. Moreover, it’s been emphasized that the Cardano Foundation intends to establish incentives for those who educate themselves, thereby enhancing the robustness of our system’s governance model.

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2024-10-25 11:57