GOVERNANCE

Key Data and Insights Into Digital Asset Governance Trends

GOVERNANCE

KEY HIGHLIGHTS

FURTHER ADOPTION OF ON-CHAIN GOVERNANCE IS REQUIRED.

Only 16 of the top 40 assets have fully implemented on-chain governance that allows token holders to vote on proposals. Additionally, 4 assets allows token holders to participate in governance by delegating their tokens to validators. Both Polygon and Cardano intend to switch to an on-chain governance model with the latter making strides in their Voltaire upgrade with the CIP 1694 proposal.

SUFFICIENT DOCUMENTATION OF GOVERNANCE PROCESS.

32 of the top 40 assets have a dedicated web page documenting their governance process and explaining how protocol changes are discussed and implemented. Meanwhile, 26 of the assets have a dedicated governance forum that enables community members to discuss governance proposals.

11 of analysed assets have a Nakamoto Coefficient of more than 30, only four are non PoW assets.
30 Of the analysed assets have a bug bounty reward system in place. 14 of them offers a bug bounty of more than $500k.
Polkadot, Ethereum and Dai lead in decentralisation among non-PoW assets. Polkadot leads the non-PoW blockchains when it comes to decentralisation based on the Nakamoto Coefficient.

ADDITIONAL DECENTRALISATION IS REQUIRED BY THE INDUSTRY.

Only 11 of the top 40 assets have a Nakamoto Coefficient of over 50, suggesting that they are sufficiently decentralised.

Of these 11 assets, 7 of them have implemented a Proof-of-Work consensus, indicating the increased decentralised nature of such blockchains compared to Proof-of-Stake assets.

Source: CCData | Click on the chart to interact with the data

HIGHER RATE OF PROPOSALS CREATED IN ON-CHAIN GOVERNANCE.

Only 7 of the analysed assets created more than 25 proposals in the last quarter. 6 of them employ an on-chain governance system, with Ethereum being the only asset with an off-chain governance system that created discussions on more than 25 proposals.

Source: CCData | Click on the chart to interact with the data

32.5% of the analysed assets have more than 100 lifetime proposals. Only 7 of the assets had more than 25 proposals created in the last quarter.

65% of the analysed assets have an official dedicated forum for discussion of governance proposals.

40% of the analysed assets have a fully on-chain governance system where token holders can vote on proposals.

SECURITY REMAINS A KEY PRIORITY.

With all assets either having an open-source codebase or having conducted a third party audit, bug bounties remain key to engage the wider community for safeguarding the assets on the blockchain. 75% of the assets have a bug bounty system in place, with 14 of them offering a reward of more than $500k.