Galaxy Digital published a report stating that Ethereum’s decentralized governance is coordinated by off-chain voting rather than on-chain Ether holder voting.
Christine Kim, vice president of Galaxy Digital’s research team, released a report on June 3. This report reveals the various stakeholders who hold the core of Ethereum governance.
According to the report, groups collaborating on the off-chain process include client teams, validator node operators, the Ethereum Foundation (EF), and decentralized application (DApp) developers.
Cointelegraph reached out to Galaxy Digital for comment, but received no response by press time.
Client team and validator node operators
According to the report, customer teams are central to decision-making, proposals, discussions and implementation of changes through Ethereum Improvement Proposals (EIPs).
“The client team builds and maintains the software needed to run and connect to the Ethereum network.”
Validator node operators were highlighted in the report as they have “the authority to implement or reject code changes” to the Ethereum network. Basically, you vote by choosing which version of the software you want to run.
Although EF’s direct influence has waned over time, it is still the “earliest and most prominent (…) non-profit organization” supporting development efforts on Ethereum.
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DApp developers, forums and communities
Kim’s report also revealed that DApp developers influence specific features and upgrades based on user demand.
“DApp developers are the primary users of Ethereum and interact with the Ethereum codebase to deploy smart contract code.”
According to the report, off-chain governance discussions are also taking place in multiple forums to promote stakeholder consensus building.
“Governance discussions take place in several forums, including the Ethereum All Core Developers (ACD) currency, ETHMagicians, Ethresear.ch, Discord, and GitHub.”
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Is it off-chain or on-chain?
The report also highlights why Ethereum prefers off-chain governance over on-chain voting, as there is a risk that ETH holders will have greater influence.
“ETH holders do not vote on any decisions through on-chain proposals or decentralized autonomous organizations (DAOs).”
The off-chain approach avoids centralization and preserves nuanced decision-making, despite the fact that it is “difficult to audit and objectively evaluate.”
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