Governance
The processes by which blockchain protocols and communities make and enforce decisions, on-chain or off-chain.
Governance spans code changes, parameter updates, and treasury allocations. Mechanisms include informal social consensus, improvement proposals, on-chain voting, and multisig councils.
A network upgrades via a scheduled hard fork after rough consensus among clients and community, while a DeFi protocol uses token voting to change fee parameters.
On-chain governance offers transparency and speed but risks plutocracy; off-chain emphasizes broad deliberation but can be slow. Many ecosystems use hybrids.
A DAO vote sets new emissions, but client teams still need to implement and release the code—an interplay of on-chain signal and off-chain execution.
Related Terms
DAO (Decentralized Autonomous Organization)
→A DAO is an on-chain governance structure where rules are encoded in smart contracts and decisions are made collectively by token holders or members.
Ethereum Improvement Proposal (EIP)
→The standard process for proposing and specifying changes or standards for the Ethereum ecosystem.
Fork
→A fork is a divergence in a blockchain that results in two or more separate paths, often due to changes in consensus rules or protocol updates.
All terms and definitions may update as the Cryptionary improves.
