Struggling On-Chain Governance Experiment Tests Itself With New Experiments

cryptonews.com:

Crypto governance is currently going through a rough patch right now. Sure, the market as a whole is experiencing a tough time, but with a consistent stream of million-dollar governance attacks having already taken place this year, it seems that the concept of on-chain voting is having it harder than most sub-sectors of crypto.

This concept has now been questioned by a range of high-profile individuals, with Ethereum (ETH) co-founder Vitalik Buterin tweeting in April that “we don't have any ‘standard templates’ for any governance I would consider remotely acceptable.” And it seems that, with the recent Terra collapse also highlighting the clear-and-present danger of governance attacks, there’s no easy or especially convincing response to his doubts.

That said, figures working within the industry say that on-chain governance as an idea and practice is not fatally flawed. Speaking to Cryptonews.com, some argue that new approaches need to be developed, such as separating governance powers, while others suggest that governance simply needs to be given time to evolve.

Governance attacks seem to be one of the recurring themes of 2022, with the Terra blockchain being halted on May 13, after the price of LUNA fell so much that the cost of such an attack became pretty cheap. 

But even before the events of mid-May, governance took blow after blow as a variety of attacks were successfully conducted. 

For instance, April 17 saw credit-based stablecoin protocol Beanstalk exploited for USD 182m, after a hacker acquired over 67% of the protocol’s governance token, Stalk, enabling them to vote through a code change enabling the theft.

Likewise, Build Finance experienced a governance attack in February that resulted in nearly half a million