Trust and Governance in Collective Blockchain Treasuries
22 Pages Posted: 24 Aug 2021 Last revised: 6 Dec 2021
Date Written: December 6, 2021
Blockchain treasuries are pools of digital assets earmarked for funding goods and services within a blockchain ecosystem that have some public purpose, such as protocol upgrades. Ecosystem participants face a trust problem in ensuring that the treasury is robust to opportunism, such as theft or misappropriation. Treasury governance tools, such as expert committees or stakeholder voting, can bolster trust in treasury functions. In this paper we use new comparative economics to examine how treasury governance mechanisms minimise different types of costs, thereby bolstering trust. We interpret case studies of innovative treasury governance within this framework, finding that the costs shift throughout the lifecycle of an ecosystem, and those subjective costs are revealed through crisis. These changes lead ecosystem participants to choose and innovate on treasury governance.
Keywords: Blockchain Treasury, Blockchain Foundations, New Comparative Economics, Institutional Possibility Frontier, Private Governance
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