On-chain Governance

On-chain governance enables blockchain communities to evolve protocols democratically through coded voting systems. Each token typically represents one vote, granting users proportional influence based on their holdings. Proposals are submitted, debated, and then voted upon through smart contracts that automatically implement the outcomes upon approval. This method removes the need for trusted intermediaries and introduces real-time, transparent governance. However, it can face challenges, such as voter apathy, concentration of power among whales, and governance attacks. Some projects use quadratic voting or delegate voting to improve fairness. On-chain governance is essential for decentralised autonomous organisations (DAOs), allowing users to maintain protocol integrity, propose fee adjustments, or allocate treasury funds. It embodies the spirit of decentralisation and user sovereignty, allowing communities to shape the future of their blockchain ecosystems.