On-Chain Governance Definition
On-Chain Governance is a system for managing and implementing changes to cryptocurrency blockchains. In this system, rules for instituting changes are encoded into the blockchain protocol. Developers propose changes through code updates and each node votes on whether to accept or reject the proposed change.
On-Chain Governance Key Points
- On-Chain Governance is a democratic system of managing changes to a blockchain.
- It allows for changes to be made in a transparent and accountable manner.
- Decisions are made by node operators who vote on proposed changes.
- It reduces the risk of contentious hard forks, as changes are decided by consensus.
What is On-Chain Governance?
On-Chain Governance is a method of managing and implementing changes to a blockchain protocol. It is a system that is built into the blockchain itself, allowing for a democratic and decentralized form of governance. In this system, changes to the blockchain are proposed as code updates. These updates are then voted on by all nodes in the network. If the majority of nodes agree to the proposed change, it is implemented into the blockchain.
Why is On-Chain Governance important?
On-Chain Governance is important because it allows for changes to be made to a blockchain in a transparent and accountable manner. It reduces the risk of contentious hard forks, which can split a community and devalue a cryptocurrency. By allowing all nodes to vote on proposed changes, it ensures that decisions are made by consensus and that no single entity has control over the blockchain.
Who uses On-Chain Governance?
On-Chain Governance is used by various blockchain projects that believe in a democratic and decentralized form of governance. It is used by node operators who have the power to vote on proposed changes to the blockchain. Some notable examples of projects that use on-chain governance include Tezos and Decred.
When is On-Chain Governance used?
On-Chain Governance is used whenever a change needs to be made to the blockchain. This could be a minor change, such as a bug fix, or a major change, such as a change to the blockchain’s consensus algorithm. Whenever a change is proposed, it is voted on by all nodes in the network.
How does On-Chain Governance work?
On-Chain Governance works by encoding the rules for instituting changes into the blockchain protocol. Developers propose changes through code updates and each node in the network votes on whether to accept or reject the proposed change. If the majority of nodes agree to the proposed change, it is implemented into the blockchain. This ensures that all changes are made in a transparent and accountable manner.
