While decentralized governance may reflect the ethos of Web3 systems, a Cardano Foundation executive said that challenges must be addressed in implementing a truly decentralized system.
Cardano Foundation executive Giorgio Zinetti discussed the benefits and challenges of decentralized governance in Web3 systems at the Cardano Summit in Dubai, emphasizing Cardano’s commitment to onchain governance.
Zinetti, Cardano Foundation’s chief technology officer, said Cardano is now “the biggest layer-1 with onchain governance,” and one of the few big blockchain projects that has fully implemented the model. He said:
“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.”
Zinetti said that other large blockchain networks have a “more centralized approach toward governance.
The pros and cons of decentralized governance
While decentralization is an important goal of blockchain networks, Zinetti said that there are tradeoffs between centralized and decentralized systems. He told Cointelegraph that decisions can be made more quickly on centralized systems.
“Centralized authority is very good for speed and getting things done quickly. But if you really want a true decentralized system, we must also decentralize the authority,” he said.
Zinetti said this will give Cardano 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.”
According to Zinetti, decentralized governance helps ensure that Cardano is driven by community interests rather than venture capitalists or other influential stakeholders with “hidden agendas” or “large egos.”
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The challenge in involving more people
One challenge for decentralized governance, Zinetti said, is ensuring that a wide range of people participate in decision-making and are educated to make informed choices. He emphasized the importance of educating voters on the decisions at hand to make decentralized governance effective:
“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.”
To encourage informed voting, Cardano is hosting events to educate the community, Zinetti said. He also noted that the foundation aims to create incentives for participants to be informed, ultimately strengthening the system’s governance model.
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