Many distinctive symbols of governance lack the real onchain salad on protocols and capital flows. Even when the protocol is born a value, it does not accumulate often to the distinctive symbol, leaving its holders with a little reasons to stay on engagement.
If you are building a protocol, you are likely to have seen this directly – the judgment becomes political and extract and the community participation fades.
But it does not have to be this way. By connecting valuable governance, incentives and entitlement, you can create a system that supports long -term growth and sustainability.
Governance and symbols work together – the design of the distinctive symbol affects the dynamics of governance, while governance decisions determine how to customize resources, how to create value, and how to finally accumulate to the distinctive symbol.
The protocols that included economic incentives in governance see stronger environmental systems, where the owners of the symbol actively contribute because they benefit directly from participation – whether through rewards, influence or revenue sharing.
Liquidity is necessary for protocol. It nourishes economic activity, attracts developers, and improves user experience. But liquidity alone is not sufficient – it must be directed effectively to the development of the protocol and its symbolic economy.
Governance should play a role in attracting and preserving liquidity, which helps the protocol to ripen to a stage that can operate revenue mechanisms. Once the fee key is activated, governance can use the same infrastructure to direct revenue flows, and to convert governance into the budget wheel.
To help protocols create positive reactions between governance and value accumulation, we have developed alternatives to governance that enhances the value of value to the code of governance.
How to work
- The distinguished symbol holders participate in the original symbol to reach governance rights, which reduces the circulating offer and the sale of pressure.
- Governance controls emissions and incentives, creating concrete symbolic benefit and attracting a new request from protocols that want to direct incentives.
- The basics of improved distinctive symbol leads to more predictive incentives, and attract sustainable TVL.
- The sustainable TVL enhances the user experience and the growth of fuel protocol, which enhances the basics of the distinctive symbol.
- With the stability of growth, the cost of the alternative opportunity to instability increases, while maintaining the offer from trading.
In the best case scenario, the well -designed governance code has turned into the incentive compatibility into sustainable growth. This budget wheel grows the growth of the network and the accumulation of value, which makes the distinctive symbols of governance an integral part of the long term.
Davi’s governance has been subjected to years of repetition. Depending on best practices, we have built the first distinguished governance suits on Aragon OSX to help design sustainable incentive structures.
Voting lock governance (VL): A standard contract library allows customized voting tanks, allowing protocols to control the government and economic incentives.
Measurement Governance: An additional governance component allows the distinguished symbol to allocate the voting power to pre -specific options at specific periods, simplify decisions and clarify the bachelors. It wipes a possible path to improve and automate emissions, incentives and protocol revenues.
This primitive can be used separately or combined to create governance models that enhance growth and value accumulation. Benefits include:
- Long -term participation bonus and inhibit mercenary behavior;
- Return the decision -making authority to those who have a real economic share;
- Encouraging the participation of voters deeper and the participation of society;
- Administration of symbolic supply dynamics to support the health of the protocol;
- Provide concrete governance interest by granting the code control over financial flows from the first day.
Governance is not only related to voting, but rather is related to the design of economic systems that maintain participation, align incentives, and pay real value to the distinguished symbol holders.
With the correct mechanism design, you can overcome governance as a negative commitment and turn it into a tool for the growth of the protocol.
We have worked with projects like Mode and Puffer to create governance models that support liquidity, network growth and entitlement value – to learn more about our services.