Web3 Governance, from Promises and Failures to its Future with Q

Web3 technology is already transforming numerous industries, and its influence will only grow as more centralized systems experience failures, such as the bankruptcy of Silicon Valley Bank. As Web3 systems expand to accommodate an increasing number of users and industries, addressing governance challenges becomes an urgent necessity. Key questions include how to protect Web3’s self-governing principles from interference by centralized actors, how to enhance governance consensus flexibility and adaptability, and how to hold bad faith actors accountable. All these problems have a solution: Q, a cutting-edge Blockchain. Ready to learn more? Let’s go!

Note: Coinpri is a validator of the Q Blockchain, and we are currently applying to be one of the root Nodes of the project.

Censorship With decentralized platforms

Any actor within the blockchain industry, including RPC node operators, validators, and smart-contract developers, has the potential to deny services. However, most censorship within the industry is imposed by governmental entities.

Statement for the OFAC

With this long sentence, the OFAC has banned the use of Tornado Cash, a transaction privacy Dapp on Ethereum, on the basis that it could be used to launder money funding illegal activities on U.S. soil.

Although the government’s concerns about potential illegal usage of Tornado.cash are understandable, it’s vital to acknowledge that most users utilize it for financial privacy. Regrettably, the OFAC has overlooked this basic requirement, compelling all MEV-relay boosters and US-based validator nodes to exclude transactions involving Tornado.cash or associated with prohibited addresses.

The severity of this issue has led to third-party monitoring of censorship impacts through tools like mevwatch. The validity of such regulation is debatable, but it has resulted in a diminished user experience within the decentralized ecosystem, and in some instances, complete service inaccessibility due to a single entity’s decision outside the protocol.

This is just one of an example of externally enforced exclusion that undermines decentralization principles. To ensure their health and quality, blockchain protocols must evolve their governance to resist outside influences.

Despite its relative age and prominence in the blockchain field, the Ethereum Network has yet to find a solution to this censorship issue. Developing a governance system is complex, and implementing rulings is challenging.

What might be Ethereum’s solution? Should they ban the offending agents, MeV relay boosters, and validators?

If so, on what grounds? What triggers sanctions if actions lie in a gray area?

This highlights the limitations of “code-is-law” as a governance system

Rigidity of “code-is-law”

A further challenge in modern Web3 governance lies in the inflexibility of the “code-is-law” principle. Essentially, it’s a rigid governance approach where rules are crafted and executed automatically trough ‘code’.

While this principle is sometimes essential to secure a blockchain protocol (ie: to ensure the cryptographic integrity of the blockchain state), it fails to capture some of the nuance that’s necessary to make complex governance decisions.

“Code-is-law” is a set of rules written and strictly enforced by a blockchain protocol. It requires no human input to take action and enforce the consensus. And while that makes it a fairly simple system to understand and scale, it also has blind spots: it is incapable of judging intent, circumstances, reputation or background.

Going back to the example of OFAC, how could ‘code’ act against these actors acting in bad faith, according to the Web3 principles?

Identifying intentional and malicious exclusion of transactions from a block is not a black-and-white problem. It is virtually impossible for ‘code’ to achieve this, as it cannot determine intent. Regrettably, ‘code’ cannot discern bad faith…

On the other hand, well-intentioned actors might face the same severe penalties as malicious actors.

In fact, a validator could be penalized due to an extended cloud provider outage. However, should it be subjected to the same punishment as another validator intentionally taking their node offline to reduce hosting expenses or undermine the protocol’s security and availability?

Undoubtedly, there are nuances that “code-is-law” would fail to consider, as it cannot take into account surrounding circumstances. Additionally, “code-is-law” has limited capacity to prevent or penalize rug pulls or scams, which are characterized not by their operation but by the surrounding communication. This aspect eludes the judgment of ‘code’. Not only are bad actors able to execute malicious schemes on inadequately governed blockchains, but they also seldom face consequences in the real world, even when their identities are exposed.

DAOs : goals and limitations

DAOs have been around for years, and are a well-known segment of Web3 governance systems. Nonetheless, they come with certain limitations.

While DAOs aim to decentralize voting power and distribute it across individuals in an attempt to create a fair and democratic system, too often their voting power is tied to the quantity of tokens held.

That means that your voice is only as loud as your wallet is deep, as highlighted by this study from early 2023.

Just like other governance systems, DAOs are not yet mature enough to support scaled up and complex systems in a way that doesn’t silence individuals.

Q Blockchain to the rescue…

… Or should I say, the res-Q . 😜

Q is a new EVM-based blockchain with a ground-breaking complex and exhaustive governance system. The core principle of Q’s governance emphasizes human decision-making at the protocol level, transcending ‘code-is-law’ and imposing immediate real-world consequences on malicious actors.

This starts with the Q constitution, a legal document outlining the governance structure of the Q blockchain.

Importantly, that document is backed by the International Chamber of Commerce, meaning disputes that emerge on Q will quickly go through arbitration in the real world, independently of individual countries or governmental powers.

The Q constitution affords protection against censorship in a manner unattainable for Ethereum, as it relies on human judgment to penalize bad-faith actors.

q, ecosystem, blockchain, coinpri
An overview of the Q ecosystem, will you find the Coinpri Logo?

The constitution is implemented and safeguarded by Q’s Root Nodes, a select council of nodes chosen by the Q community to serve as the “guardians of the constitution”. These Root Nodes can be likened to the Supreme Court of the United States. Furthermore, the governance systems encompass advanced DAOs benefiting from the same constitution, expert panels, and an extensive voting system for all Q token holders.

Q is also user-friendly: being an EVM-based blockchain, Ethereum-type wallets and smart contracts will primarily function on Q, streamlining the process of building and utilizing Q. Lastly, Q boasts a strong and well-supported community comprising businesses, academic institutions, legal entities, infrastructure service providers, and software engineering teams, positioning it as one of the most formidable emerging blockchains of 2023.

Coinpri’s commitment to the Q blockchain

The founders of Coinpri discovered Q in late 2022 during its infancy and quickly became convinced of its potential as the future of web3 governance. This is why we are applying to become a Root Node of the Q blockchain.

To better support the community and help it grow, we’ve also launched the Qollective, to offer guides, how-tos, RPC nodes, and snapshots available to all Q users.

We believe in Q’s mission to revolutionize blockchain governance and are committed to supporting its growth, visibility, and usability. If you want to learn more about their project, do not hesitate to have a look at their website. And of course, to support us in our vision, feel free to help us achieve our Root Node appliance.