Is DeFi governance really a waste? Voting rights can be given up, but they cannot be lost

The development of DEFI has caused a market boom. So far, most people in the currency circle have more or less participated in DEFI projects or DEFI mining. Although some people think this is unsustainable, DEFI still brings a lot of new things to the cryptocurrency world.

The most notable ones are DEFI governance and liquidity mining. We are not unfamiliar with liquidity mining, and some people even indulge in it. Of course, most articles are only about liquidity mining. After all, liquidity mining involves making money. When the leeks hear about making money, they will naturally be very interested. On the contrary, few people pay attention to the governance of DEFI.

DEFI governance is a marathon

Since the DAO, there have actually been some discussions on governance. Of course, due to the short lifespan of the DAO, this did not develop very well. Later, initial attempts were made on some DEFI projects such as Maker DAO. Until the outbreak of DEFI now, there are actually very few projects with good governance.

Currently, typical DEFI governance that is doing well, such as compound and aave, are actually concentrated on Ethereum. However, due to the relatively high transaction fees of Ethereum, most people may not be willing to participate in governance. Therefore, to some extent, the current DEFI governance is still controlled by a few people.

Of course, if we look at it superficially, we may not necessarily come to such a conclusion. For example, if you see that the coin holding addresses of the DEFI project's governance tokens are relatively scattered, if you simply think that this is a decentralized governance project, then there may be some deviation. After all, it is not very difficult to break up the coin holding addresses. Therefore, no one knows whether the governance vote here is artificially manipulated or a reflection of the user's true thoughts.

Centralized exchanges may control the future of DeFi projects

Currently, many centralized exchanges have opened online trading functions for DEFI projects, and a large number of star DEFI projects can be traded on centralized exchanges. Although this supports market liquidity to a certain extent, it also allows centralized exchanges to hold a large number of DEFI tokens, so they can vote according to their own wishes, which is very scary.

Would a centralized exchange do this?

Let’s take a look at two examples. The first example is the eos super node election. I won’t go into too much detail here, as many people should have had the same feelings. Anyway, there are more than one exchange elected as super nodes now, and it’s so obvious, what else can we expect?

The second example is BM's Stemmit. When Hive was forked, it was a good example. Of course, Huobi's private voting actually angered some people. Anyway, I believe many people have forgotten about this incident completely. I mention it here so that everyone can have a feeling.

In other words, if the survival of centralized exchanges is threatened, then centralized exchanges can use users’ coins to vote accordingly, causing the governance of DEFI to fail, so this point still needs to be considered.

The importance of governance

Governance rights are very important, and many people may overlook this, just like our voting rights. Simply put, Chinese people often don’t care much about this, and it is also reflected in investment that we do not pay much attention to voting rights. Here we recall the things around us, and we actually find that many times our voting rights have been lost, but we still don’t know it, or we don’t care at all.

But in foreign countries, especially Western countries, people still care a lot about voting rights. For example, the US presidential election is a quadrennial event, and the number of participants is unprecedentedly high each time. In this atmosphere, it is actually a right that a citizen has. Similarly, in terms of DEFI, the proportion of these people who care about voting rights is also quite high. At the same time, we all know that the DEFI project was first developed gradually from abroad, and domestic projects seem to be a little backward. It is this difference that has led to most people in China just speculating on DEFI. Few people think about how DEFI will be governed and managed in the future, and how the project should operate. Because the voting rights of most domestic DEFI projects are still in the hands of the project party, or even there have been incidents of casually changing the white paper and destroying tokens, such as DEFIBOX on EOS. Although the starting point may be good, it is still not bright enough.

This does not mean that we do not care about voting rights or other things. We need to realize that it is just the different forms of expression of Eastern and Western civilizations, which lead to differences in genes or some concepts engraved in the bones.

But the world is a whole, and adaptation is the best choice. Therefore, in general, if you don’t care, then you won’t have it. In the decentralized world, we need to identify with another concept. In essence, the decentralized world is a concept that the public can participate and everyone can do it. Governance and voting are important steps to promote the progress of the project. You can give up, but you must never lose it.