On-chain governance is a crucial concept in blockchain technology. It refers to the decision-making processes that occur directly on the blockchain network. This system allows stakeholders to propose, vote on, and implement changes to the protocol without relying on off-chain mechanisms.
In on-chain governance systems, proposals for changes are submitted as transactions on the blockchain. Stakeholders, typically token holders, can then vote on these proposals. The voting power is often proportional to the number of tokens held.
On-chain governance offers several advantages over traditional governance models:
While on-chain governance has many benefits, it also faces some challenges:
Several blockchain projects have implemented on-chain governance mechanisms:
Tezos uses a self-amending ledger, allowing stakeholders to vote on protocol upgrades.
# Example of a Tezos on-chain governance proposal (pseudocode)
def submit_proposal(proposal_hash, period):
if is_delegate(sender):
proposals[period].append(proposal_hash)
emit ProposalSubmitted(sender, proposal_hash, period)
Polkadot uses a council and referendum system for on-chain governance.
// Example of a Polkadot referendum vote (pseudocode)
fn vote_on_referendum(ref_index: u32, vote: Vote, balance: Balance) {
ensure!(referendums.contains(ref_index), "Referendum does not exist");
let voter = ensure_signed(origin)?;
Democracy::vote(voter, ref_index, vote, balance)
}
On-chain governance is closely related to several other blockchain concepts:
On-chain governance represents a significant shift in how blockchain networks evolve and make decisions. As the technology matures, we can expect to see more sophisticated governance models emerge, addressing current challenges and further empowering blockchain communities.