Are governance tokens pointless?

[Abiky]

What's the point in having governance tokens, when most projects still have some level of centralization in them? In many Blockchains, those with a lot of wealth or spending power, have huge voting influence (governance) over key proposals. I'm not talking about network consensus. That is another subject. I'm talking about projects with governance tokens such as Uniswap and Compound.Finance. Their governance model isn't built with equality in mind.

Is this the reason why governance tokens have ultimately failed? UNI and COMP are way below their ATHs. Your input would be greatly appreciated. Thanks.

[MArsland]

What's the point in having governance tokens, when most projects still have some level of centralization in them? In many Blockchains, those with a lot of wealth or spending power, have huge voting influence (governance) over key proposals. I'm not talking about network consensus. That is another subject. I'm talking about projects with governance tokens such as Uniswap and Compound.Finance. Their governance model isn't built with equality in mind.

Is this the reason why governance tokens have ultimately failed? UNI and COMP are way below their ATHs. Your input would be greatly appreciated. Thanks.

Governance tokens enjoyed success in their heyday, but shifting narratives and the emergence of competitors have since fragmented investor attention across the market. While tokens like UNI, AAVE, COMP, and MKR are backed by solid protocols, mere quality is insufficient if they fail to anticipate the evolving needs of an increasingly complex crypto industry. For instance, many protocols are now serving as infrastructure for digital finance, tokenized securities, and RWA.

[o48o]

What's the point in having governance tokens, when most projects still have some level of centralization in them? In many Blockchains, those with a lot of wealth or spending power, have huge voting influence (governance) over key proposals. I'm not talking about network consensus. That is another subject. I'm talking about projects with governance tokens such as Uniswap and Compound.Finance. Their governance model isn't built with equality in mind.

Is this the reason why governance tokens have ultimately failed? UNI and COMP are way below their ATHs. Your input would be greatly appreciated. Thanks.

When and where in the world was the power of wealth about equality?

Also, i don't see UNI as a failed token continuous price growth shouldn't be any sort of indicator for that. It just says that people want to hold it.

As comparison, if people would want to hold fiat money, and price of it would moon, it wouldn't speak about success of that fiat money, but more like a flaw if people rather hodl it then spend it.

[asriloni]

What's the point in having governance tokens, when most projects still have some level of centralization in them? In many Blockchains, those with a lot of wealth or spending power, have huge voting influence (governance) over key proposals. I'm not talking about network consensus. That is another subject. I'm talking about projects with governance tokens such as Uniswap and Compound.Finance. Their governance model isn't built with equality in mind.

One of clear reason is for financial purpose. A crypto based project is getting prohibited to issue the shares like ordinary company who fully compliance with the regulation. So they use the governance in order to funding their project in long term. Honestly, DAO is crap. Many of them often got manipulated by the team itself.

So i don't believe the importance of government token these days. The only most logical reason for existence of governance token to be used by team behind the project to bitching more money.

Is this the reason why governance tokens have ultimately failed? UNI and COMP are way below their ATHs. Your input would be greatly appreciated. Thanks.

Yes, it is. The governance token contains not utility other than being used for DAO. It's pointless to have it because it basically gives us nothing unlike shares who distributed us yield periodically.

[Jostle]

Extremely pointless. Because ultimately, the one implementing the "governance outcome" are the validators, or some node-runners. In some instances, the validators are also centralized.

All this are just farce and false attempts to give the "holders" a voice, where the reality differs.

[nelson4lov]

It seems you are collecting data for a survey or something else?

I have no issues with governance tokens except the fact that most of the governance tokens we have today have no intrinsic value. They only have one purpose and one purpose alone which is that holders can vote. There were no direct benefits to token holders the same way holders of a profitable stock company benefits from dividends from the company's success.


They say it is a governance token but the average token holder gets zero benefits from holding and voting.

[jossiel]

What's the point in having governance tokens, when most projects still have some level of centralization in them? In many Blockchains, those with a lot of wealth or spending power, have huge voting influence (governance) over key proposals. I'm not talking about network consensus. That is another subject. I'm talking about projects with governance tokens such as Uniswap and Compound.Finance. Their governance model isn't built with equality in mind.

Is this the reason why governance tokens have ultimately failed? UNI and COMP are way below their ATHs. Your input would be greatly appreciated. Thanks.

I believed on them before but I think due to the competition and just simply the change of narrative made them fail.

Not actually a failure because they're still there but that had resulted into lesser demand for their token.

It sounds good and promising when it was shown before but, as time passes by the narrative changes and that's how the direction of these tokens are being derived into something that's no longer needed.

[shinratensei_]

Governance with concentrated voting power on the foundation since the first day is pointless? shocker. For real though, these governance are mostly farce, every proposal to give back to the token holders always failed with major voting power holder which is the foundation that is often registered as a company comes to intervene. The token holder can get nothing and the price keep dumping while the protocol make millions, it's as if they are creating token only to dump it. Altcoins and its pseudo-decentralization is nothing new.

Every new governance token setup are always 5% to community 40% to foundation, 30% to investors, and 25% for future community and rewards which actually used to fund their cronies. It's never about making fair governance.

[bitbollo]

Mostly of these new tokens/companies are just going to be surpassed by other coins/tech...
I always use a simply rule of thumb while using crypto/bitcoin: if something can be done without blockchain/crypto coin, it means simply you don't need any blockchain or crypto coin.
All of these tokens are mostly of the time advertised and sold --> hence this become a form of finance the whole company behind the token - by itself the token has no usage.
Just imagine how it can become hard to mantain some safe solutions

[cryptoaddictchie]

Is this the reason why governance tokens have ultimately failed? UNI and COMP are way below their ATHs. Your input would be greatly appreciated. Thanks.

With the current market for altcoins its not just about governance tokens actually. The altcoins are pretty much diluted and even a utility token with different goal has been under the water like governance tokens. Yes UNI has been down for some time but since other coins also in the same situation for me its the market that affects it but not their purposes as governance tokens.

[Localhostspeed]

What's the point in having governance tokens, when most projects still have some level of centralization in them? In many Blockchains, those with a lot of wealth or spending power, have huge voting influence (governance) over key proposals. I'm not talking about network consensus. That is another subject. I'm talking about projects with governance tokens such as Uniswap and Compound.Finance. Their governance model isn't built with equality in mind.

Is this the reason why governance tokens have ultimately failed? UNI and COMP are way below their ATHs. Your input would be greatly appreciated. Thanks.

Governance tokens when the team and institution controls the DAO, I don't like those tokens in the first place because the things people decide about them doesn't even help the token control. Just like you said, it's centralized when few people controls the system and when people with good and unbiased intentions see these things, they dump their coins and move elsewhere and even potent buyers stop buying because of the centralization.

There are some important decisions that will warrant the intention of the community but if the team doesn't like it, they wouldn't even reject the proposal, they will let people who made the proposal do wht they like but they are going to do what they want to do because they know they are going to reject it. The centralized aspect of it make it uninteresting, although some old coins are not that centralized like the new ones but the trend is not interesting to investors again.

[TastyChillySauce00]

Is this the reason why governance tokens have ultimately failed? UNI and COMP are way below their ATHs. Your input would be greatly appreciated. Thanks.

Even though it's true what you're saying, governance tokens are mostly pointless but in my personal opinion, the governance token failed because there are endless fork of the project and every forked projet are releasing their own token, the market got diluted and the holder don't want to hold governance token of a project that have hundreds of forks live.

I've hesitated to buy governance token exactly because endless forks that got funded by investors, but lately forks have been dying one by one and the OG still remains, when that happens the governance token of OG project can go up but honestly I prefer to hold the l1 coin than a project's coin. Feels like it has more fundamental backing it up.

[Ucy]

The idea behind such governance token is to make lots of money for a crypto network "stakeholders" as people compete to have higher voting power and more influence over the crypto network by buying higher amounts of token than everyone else. It's a very corrupt method, even worse than what is obtained in fiat system. Atleast fiats are mostly democratic or allow people to choose leaders who will represent them. I think the governance token method is some kind of oligarchy, which is completely opposite of true cryptocurrency ideals that decentralize power to everyone, permissionlessly and trustlessly.

By the way, influence or voting power should not be bought. It should be earned by solving problem properly, which means everyone is involved in voting and decision making, so that tokens are earned because voters or participants (who get ranked up based on how much token they earn) deserve them.

[Abiky]

It seems you are collecting data for a survey or something else?

I have no issues with governance tokens except the fact that most of the governance tokens we have today have no intrinsic value. They only have one purpose and one purpose alone which is that holders can vote. There were no direct benefits to token holders the same way holders of a profitable stock company benefits from dividends from the company's success.


They say it is a governance token but the average token holder gets zero benefits from holding and voting.

I'm only asking because not many projects have such concept/model. It could be due to the fact that the idea of a governance token has been nothing but complete failure. With no benefits for holders, governance tokens serve no purpose in the crypto/Blockchain space. Projects using such model should just ditch tokens and rely instead on true network consensus. Much more decentralized and equitable than just letting someone with a large amount of tokens have the final say over proposals/improvements.

Uniswap tried to introduce staking on its UNI token, but that hasn't been enough to boost market prices all the way to the moon. Supposedly, fees from the platform were to be distributed to UNI holders. And the COMP token? It's been "silent" for quite a while now. These tokens aren't "dead" yet, so at least there's hope for holders like me.