![Vitalik Buterin Has Suggestions for Dogecoin and Doge’s Cooperation With Ethereum Vitalik Buterin Has Suggestions for Dogecoin and Doge’s Cooperation With Ethereum](https://static.news.bitcoin.com/wp-content/uploads/2021/09/doge-eth.jpg)
Ethereum co-founder Vitalik Buterin is sharing his opinions on the crypto plans of tech moguls Jack Dorsey and Mark Zuckerberg. Buterin, who is working to improve the scalability of Ethereum, currently the most widely used blockchain for decentralized finance, says he has reservations about how the payments giant Square, led by CEO Jack Dorsey, plans to […]
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Ethereum creator Vitalik Buterin is joining the advisory board of the Dogecoin Foundation, a non-profit organization that is relaunching to support the development of Dogecoin and its blockchain. The foundation is re-establishing as Dogecoin (DOGE) grows to become one of the largest cryptocurrencies with a market cap of over $39 billion. In a new announcement, […]
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Buterin asserts that things need to move beyond coin voting as it exists in its present form, suggesting “proof-of-humanity” or “proof-of-participation” alternatives.
Ethereum co-founder Vitalik Buterin has taken a deep dive into token-based decentralized governance, suggesting that existing voting mechanisms are flawed and may be holding the DeFi sector back from realizing its full potential.
In a lengthy blog post published Aug. 16, Buterin stated the crypto community needs to "move beyond coin voting as it exists in its present form.”
Currently, the majority of decentralized finance (DeFi) projects manage their protocol upgrades, reward issuance, and other facets of governance elections where votes are distributed among token holders according to the size of their holdings.
However, many projects have come under fire for allowing their voting process to be dominated by whales holding vast swathes of the governance tokens, allowing them to vote in support of their personal interests.
Buterin highlighted two issues relating to token-based governance, emphasizing the risk of incentives misaligning among community members, and its vulnerability to “vote-buying” and “outright attacks” influencing the outcome of governance votes. He added:
“The most important thing that can be done today is moving away from the idea that coin voting is the only legitimate form of governance decentralization.”
Buterin noted the prevalence of "unbundling," whereby “vote-buying” can be achieved and governance systems can be manipulated by borrowing on crypto collateral and using the tokenized assets to vote.
In the context of unbundling, “the borrower has governance power without economic interest, and the lender has economic interest without governance power,” he added.
Looking beyond token-based governance, Buterin advocated the exploration of “Proof-of-Humanity”-based governance systems where one vote is allocated per each of a protocol’s users.
Buterin also offered “Proof-of-Participation” as a possible solution, where voting is limited to the users of a protocol that have contributed work to the benefit of a project or its community, suggesting voting rights could be exclusively distributed to addresses that complete a specific task.
Ethereum’s co-founder also suggested quadratic voting — where the power of a single voter is proportional to the square root of the economic resources that they commit to a decision — could offer unique solutions to decentralized governance.
Related: Can DeFi and on-chain governance change human nature?
He also suggests a “skin in the game” approach that makes individual voters responsible for their decisions, stating:
“Coin voting fails because while voters are collectively accountable for their decisions (if everyone votes for a terrible decision, everyone's coins drop to zero), each voter is not individually accountable.”