Galaxy Digital, a leading digital asset investment firm, has unveiled a comprehensive report that sheds light on the decentralized governance of Ethereum. The report, released by Christine Kim, Vice President of Galaxy Digital’s research team, on June 3, reveals the key stakeholders involved in steering Ethereum’s governance.
According to the report, Ethereum’s decentralized governance relies on off-chain voting rather than on-chain voting by Ether (ETH) holders. The groups collaborating on these off-chain processes include client teams, validator node operators, the Ethereum Foundation (EF), and decentralized application (DApp) developers.
Client teams play a central role in decision-making, proposing, discussing, and implementing changes through Ethereum Improvement Proposals. Validator node operators, on the other hand, have the authority to implement or reject code changes to the Ethereum network by selecting the software version to run.
Although the direct influence of the Ethereum Foundation has diminished over time, it still supports the development efforts on Ethereum as a nonprofit organization that has been involved since the earliest days.
The report also highlights the influence of DApp developers on certain features and upgrades based on user needs. Off-chain governance discussions take place across forums, which facilitate the building of consensus among stakeholders.
When asked about the transparency and inclusivity of Ethereum’s off-chain governance model, Kim expressed her belief that it remains accessible to all members of the community.
Regarding the choice between off-chain and on-chain governance, Kim stated that both options have their drawbacks. However, the report emphasizes Ethereum’s preference for off-chain governance due to the potential risks associated with large ETH holders exerting excessive influence. The off-chain approach allows for nuanced decision-making and prevents centralization, despite its challenges in terms of auditability and objective evaluation.
In conclusion, the report from Galaxy Digital provides valuable insights into the decentralized governance of Ethereum, highlighting the key stakeholders involved and the rationale behind the off-chain voting approach. By maintaining a transparent and inclusive governance model, Ethereum continues to evolve and adapt to the needs of its diverse community.