Vitalik Buterin: 'Darkish Hand' of Token Voting Might Erode Zcash Privateness – Decrypt

Zcash’s governance debate resurfaced over the previous week after a routine election endorsement drew sharp responses from outstanding business figures.

The dialogue facilities on whether or not the privateness coin ought to preserve its committee-based system or shift to direct tokenholder voting.

Zcash co-founder Zooko Wilcox opened discussions by urging help for Artkor, a long-time Zcash group member and sitting member of the Zcash Group Grants Committee (ZCG), the place he seeks re-election for the following 12 months.

Zcash’s off-chain governance operates by way of a curated advisory panel referred to as ZCAP which votes on main questions and elects the committee that allocates grants (ZCG). Wilcox describes the group as “considerate and impartial individuals who disagree with one another however are dedicated to the identical mission.”

By Saturday, AngelList co-founder Naval Ravikant had entered the thread and challenged the mannequin.

“It’s an out of date system and ought to be deprecated,” Ravikant opined, including that “trusted” third events “are a safety flaw and it doesn’t matter if they’re ‘considerate and impartial.”

All governance for decentralized protocols “ought to be on-chain and personal,” Ravikant mentioned.

Vitalik weighs in

Ethereum co-founder Vitalik Buterin then weighed in and urged the group to not undertake a coin-voting mannequin.

Buterin mentioned he hopes Zcash “resists the darkish hand of token voting,” arguing that the cryptocurrency’s privateness focus might “erode over time” if left to the “median token voter.”

To him, “token voting is unhealthy in every kind of how” and “worse than Zcash’s establishment,” citing a 2021 weblog put up.

“Coin voting is engaging as a result of it feels credibly impartial: anybody can go and get some items of the governance token on Uniswap,” Buterin wrote on the time, including that, “In observe, nevertheless, coin voting might properly solely seem safe at present exactly due to the imperfections in its neutrality.”

Buterin argued that straightforward coin-weighted voting concentrates energy amongst giant holders and pushes protocols towards short-term, price-driven choices.

The value of success

Worth has grow to be a priority among the many Zcash group, with Artkor noting in his re-election put up that “the worth context has modified considerably.”

The surge in Zcash’s coin, ZEC, over the previous month, has “undoubtedly” created new alternatives for its group, Artkor famous.

“However on the similar time, it additionally creates new harmful challenges. The hazard just isn’t that we are able to spend extra, however that we are able to begin spending extra simply. You already know, it’s like a take a look at of religion with cash,” he wrote.

Supporters of the present system lean on the concept that a vetted committee offers continuity and filters proposals responsibly. Critics, nevertheless, see a construction that would focus affect.

“Token-based voting can expose protocols to governance seize if a well-funded actor accumulates a controlling share of tokens,” Lucien Bourdon, analyst at Trezor, instructed Decrypt. “Whereas the chance of such occasions will depend on the asset’s liquidity and distribution, the danger persists.”