Ethereum Founder Vitalik Buterin Bashes Governance Token Speculation, Calls it “Pathological”

Ethereum founder Vitalik Buterin has offered some criticism for those speculating with governance tokens.

Buterin said on Twitter on Tuesday that the belief that tokens that have governance rights tied to them should have value is “pathological.”

“The notion of ‘governance rights’ as a narrative for why a token should be valuable is pathological. You’re literally saying ‘I’m buying $X because later on someone might buy it from me and a bunch of other people to twist the protocol toward their special interests’,” he said.

Governance tokens like MakerDAO’s MKR or Ethereum Name Service’s ENS are issued by decentralized autonomous organizations (DAOs) and are used to vote for various proposals influencing the underlying protocol. The more tokens an individual has, the larger the voting power they hold, though there are other voting systems like quadratic voting that attempt to level the playing field.

Buterin, who believes that decentralized governance doesn’t necessarily have to be token-based, also said that the only people who might derive value from trading governance tokens are wealthy individuals and hedge funds. These individuals and entities can simply purchase large amounts of governance tokens and influence the protocol changes to their advantage.

“As a regular individual, ‘pay $500 to get a 0.0001% chance to influence the outcome of some votes’ is just not a good trade. The only people for whom it is a good trade are multimillionaires and hedge funds (including attackers),” he added.

Vitalik Buterin is one of the most important and knowledgeable people in the crypto space. His opinions and insights are invaluable to the crypto community, even if what Buterin says or does is met with skepticism and doubt.

Source link:




‘Book the hotel’ – Jurgen Klopp comments haunt him as Liverpool boss admits Champions League comeback at Real Madrid might be impossible

Hopefully Jurgen Klopp still has free cancellation on that hotel in Istanbul. Any Liverpool fans who blindly followed his instructions in May 2022...

Nikola Jovic to miss 4 weeks due to back injury

Miami Heat rookie forward Nikola Jovic will be sidelined for at least four weeks due to a lower back stress reaction, the team...

94% Took Off Without VC

Can you grow and takeoff without venture capital (VC)? That is the question every entrepreneur should ask. You spend the same amount of...

The Apple Vision Pro might be a TV, but it won’t replace the TV

Apple’s Vision Pro is a TV. It’s not even out yet, but that feels well established at this point. While it can play...

Revolutionize Small Business with Generative AI

Opinions expressed by Entrepreneur contributors are their own. This story originally appeared...