Governance
Governance

In the context of Blockchain technology, there are two types of governance, namely on-chain as well as off-chain governance. On-chain governance: The protocol contains all the logic that is needed to execute whatever was voted on and does so automatically in response to the voting results. On-chain governance can also be utilized to specify how the underlying ledger is to be amended. It can be used to vote on and ultimately change how the underlying blockchain functions in terms of certain parameters such as block size, gas limit, validator set or consensus thresholds. This allows token holders to vote on changes on the underlying blockchain itself Off-chain governance: Off-chain governance is not directly enforced by the protocol but rather through third parties such as developers, miners or validators. It describes processes to upgrade a protocol in which decision making first takes place off-chain, on a social level. Decision have then to be encoded into the protocol and accepted by miners / validators.


Alternatives in
No items found.

Explore other terms

Protocol Mechanics
For better classification, differentiation and comparability of different Blockchain networks, we identified different Protocol Mechanics.
Staking Mechanics
Staking Mechanics refer to the token economics, which is a new branch of the economy that explains the structure of a particular ecosystem in the blockchain sphere. It describes the study, design, and implementation of economic systems built on blockchain technology. Each platform and blockchain application is developed under its own token-economics model. Proof-of-Stake blockchains not only differ in terms of their 'Protocol Mechanics', but also in terms of certain staking-related parameters, e.g. their reward or inflation rate as well as certain actions that are required by delegators.
Staking Risks
Staking your digital assets is not a risk-free endeavor. Please make sure to review all the risks involved before you start your staking operations and make sure to properly research the validator that you want to stake with.