So, I was asked by Staci W to post some of my thoughts here that I originally posted on a Twitter thread that Michel posted there. When Staci says jump… Ha.
For reference: This Thread
I’m looking forward to an honest and open discussion on this. I’ll be very honest, my gut reaction to this is to be pissed off. Kind of viscerally, I feel like this is a betrayal to the promises and guarantees that Algorand made with it’s widely promoted Governance pathway to 2030. These guarantees are what brought a huge number of people into the algo ecosystem to begin with. As Michel stated, very low risk with huge up-side potential, & a chance to be tangibly involved with a project so promising IS one of those once-in-a-lifetime opportunities that everyone wants to find.
I feel like Governance participation at an individual level is important, if the goal is to have a truly decentralized blockchain. If Algorand still feels that way as well, they have to make it worth people’s time and attention. No one wants Monster Exchange controlling Algorand, but you can’t make it a waste of time for everyone just to try to keep them out of the playground. Governors, by and large, want to help. We want to participate. We want to engage. But many of us are investors, not necessarily blockchain experts or NFT creators. I don’t really think one is more important than the other - just different. If Algorand really is for everybody, let’s make sure we act like it. This draft proposal doesn’t feel like that.
On that note, Governance is brand new. We’re coming up on our 3rd vote this quarter, and 2 out of 3 have been delayed, w/ the proposals changed to introduce sweeping changes to governance, virtually straight out of the gate. After so much promotion that Algorand had the gold standard of governance, shouldn’t we be giving both the governance model AND the ecosystem some real time to function as it was envisioned before so dramatically revamping it? I think it makes Algorand look unstable to do such abrupt u-turns so quickly out of the gate.
Further, the hypothesis that defi platforms could give The Foundation wallet addresses participating on their platforms and their respective balances in return for 3 seats in gov for each algo-equivalent those wallets hold is very concerning to me. Independent companies sharing customers’ engaged wallet addresses and active balances, so that their trading or liquidity is rewarded in exchange for influence? That just sounds shady when I type it.
This is also insinuated in places/posts to be a way to thwart whales & exchanges… do we not remember DENA? These exchanges/whales can and do participate - which is good - but I feel like any kind of argument that this adjustment to the way governance operates will deter them is dangerous and false. I worry that doing this could actually have the opposite effect, and allow whales and exchanges to fully take over governance if they get something akin to triple the seats at the table for each algo, because they “participate in the ecosystem”.
Additionally, tying governance to node running will introduce other complications. Personally, I live in an extremely rural location. No cell service, only satellite internet with slow speeds, high latency, and very, very low data caps. Running a node is not an option for me (as cool as that would be), and a huge chunk of the world population is in a similar situation. For that reason, I’m not opposed to incentives for node runners, just tying it to governance. Just food for thought.
I understand the arguments to stimulate innovation, growth & participation in the ecosystem. Those are obviously critical issues that need to be addressed, and they should definitely, unequivocally be a main focus. However, I don’t think blowing up a plan before allowing it to even try to work & reneging on the vision that was so enthusiastically sold to early supporters is the right way to do that.
I also don’t agree that 9-10% is outrageously high, or that the roughly 4% inflation is so cataclysmic to the price action. I mean, we’re all looking around at fiat right now, right? As a historically traditional investor, even I-Bonds are over 9% now. While the risk:reward ratio is obviously relevant, I think in this case it’s kind of a cop-out. It’s the very thing that was used to spur interest in the 1st place. It feels a bit rug-pull-ish, to be honest.
Lastly, here are my questions. (Warning: Crypto newbie opinions incoming.) Last quarter we voted to start an xDAO. I fully support this. Is there a way to make the actual xDAO a full fledged platform that we could physically deposit our tokens to and lock, similarly to some defi platforms? Could our governance payouts have to ‘vest’ in some way that is actually invested and involved in the ecosystem via this platform before they unlock and we can have full access to them? If not, and these things could only be done through defi platforms, what do we do about forcing people to make their investments vulnerable to security breaches, hacks, etc.? What about hard locks, extended durations of commitment, etc.? I feel like there are solutions that will benefit everybody here… we just have to be creative enough to find them
I’ll step off my soapbox now… I’m looking forward to reading others’ thoughts, though. Cheers!