Based on the similarities between Free and Open Source Software and Blockchain governance, Placeholder’s Mario Laul recommends several best practices to blockchain organizations. These practices, in Laul’s view, are conducive to success in governance, which he understands as “…measured by the quality and adoption of the software over time, the frequency and handling of major conflicts, and the general health of relations within the project’s ecosystem.”
- In Laul’s view, ‘undefined’ project governance, in which projects lack rules or structure for setting goals, making decisions, managing resources, and resolving conflicts, is rarely sustainable. Such processes need not be elaborate or time-consuming, with rough consensus working for many open projects, and Laul cautions projects against the other extreme as well, noting that both excessive control and lack of structure can discourage participation and invite dissent. Laul ultimately recommends that projects find a balance among involved participants and stakeholders.
- Broad participation on every issue and activity is less important than transparent, effective communication, venues for concerns to be voiced, and processes for resolving disagreements. With low participation in voting a widespread concern, projects concerned with securing legitimacy and community support should review whether such structures exist and how well they function.
- Laul claims, citing M.L. Markus, that new contributors are attracted to organizations operating with greater degrees of openness and accountability—traits often at odds with the opaqueness and autocracy found in highly centralized projects. For projects taking a decentralize-over-time approach, this suggests that the implementation of mechanisms conducive to openness and accountability should occur before the project transitions to broadening governance participation.
- Laul notes that FOSS projects rely heavily on mailing lists, online forums, websites, wikis, conference calls, instant messaging, and code collaboration platforms to coordinate their work and information flows, with interaction occurring between both code contributors and end-users. This dynamic allows projects to improve software quality and user experience more rapidly, as feedback from the people using the software allows bugs and issues to be identified more quickly. Where possible, projects should aim to release to end-users more quickly, establish lines of communication, and let feedback influence developmental decisions.
Despite the overlap, Laul acknowledges that blockchain governance has unique challenges compared to FOSS. For one, users of blockchains typically have explicit financial interests in how the network develops, with software upgrades potentially affecting the safety of network cryptoassets. Most notably, governance processes can potentially undermine the raison d’être of distributed networks—providing a ‘level playing’ field for actors building on it, one free of centralized intermediaries that have the ability to censor transactions or unilaterally change a system’s rules. In these areas, blockchain governance is in ‘uncharted territory,’ with it still unknown which of the various approaches will prove successful.