DeFi Governance Decisions Need Hopeless Algorithms

DeFi’s Difficult Governance Decisions Lie Ahead

Kevin Mehrabi is the CEO of Wealthchain.

From their website:

VISION: We believe that smart-contracts are the future of finance. Financial instruments built as smart-contracts with formal-verification capabilities are the most secure and mathematically precise financial instruments ever created.

I agree. What I don't agree with is that more decentralisation is the answer. The current voting models are terrible and are just waiting for someone interested enough to take control.

Doing so requires a combination of technology innovation and on-chain governance innovation.

OK, so they know this too. The development of voting algorithms needs to go hand in hand with the financial algorithms.

How can blockchain protocol governance be decentralized? Blockchains such as Algorand enable validators to vote on upgrade proposals.

That's exactly what I mean; that's pathetic, and will work only until it doesn't! The issue isn't just forking, as that can be a hugely expensive solution, but collusion and manipulation.

Using Tether seems to me a really bad example. First, it does NOT have its own blockchain, so cannot natively fork - or spoon. Then, if any of the USDT "flavours" did a rogue split, they would have zero collateral and fail faster than a LUNA crash. Indeed, LUNA is a far better example of the stupidity of decentralised crowds. The plural of ignorance is not wisdom.

Indeed, sometimes - sometimes - a governance system needs to stop the devs from doing something really catastrophically stupid. This has recently happened on Cosmos, so there is hope - but hope is not good enough. Just as we are designing trust-less protocols, we also need hope-less protocols!

Anyway, Wealthchain looks more interesting than the article.