DLT Interoperability and More ⛓️#1 ⛓️ — SoK: Blockchain Governance
In this series, I will do an experiment where I analyze (first high-level, perhaps in later editions, more technical) papers on blockchain and interoperability (and both). The point is to share interesting research and promote discussion. I thought about a small newsletter-like format, please let me know what do you think!
The first edition covers a very fresh paper (preprint, 18th January 2022).
➡️ Title: SoK: Blockchain Governance
➡️ Authors: Aggelos Kiayias and Philip Lazos
➡️ Contributions:
-the authors explore how confidentiality, privacy, coercion resistance, verifiability, accountability, sustainability, Pareto efficiency, suffrage, and liveness are properties of (blockchain) governance.
-the authors systematically compare the governance of some blockchains using the proposed properties
💪 Strong points:
-the authors take into account a variety of forums to retrieve information
-the authors systematically compare the governance of the two most famous blockchains, Bitcoin and Ethereum
-the authors explain the governance process of the different analyzed blockchains in detail (e.g., bitcoin improvement proposals)
😞 Limitations:
- not a limitation of the study per se: it is not easy to systematically compare the types of suffrage/voting mechanisms.
- the choice of the blockchains to be analyzed seemed to be done in an ad-hoc way, which is not a limitation per se, but it could be interesting to understand governance differences to another blockchain of blockchains (such as Cosmos) or other popular blockchains (e.g., Solana, Cardano).
- unfortunately, private blockchains do not have a governance analysis (likely to be much simpler)
🔥 Points of interest:
-the authors provide comprehensive coverage of the related work by analyzing software (and blockchain) governance literature.
- important parts of the governance process take place off-chain. A tradeoff of secrecy-accountability exists.
-the authors state Bitcoin governance model does not satisfy accountability. However, it seems that accountability is present, especially when parties take a stance and it proves to be a bad decision a posteriori. Nonetheless, this is presumably a weak form of accountability, where the asset at stake is reputation, and it is not “self-enforceable”.
- Table 1 comparing governance systems
-”many current
implementations do not have rigorously defined governance
mechanisms for every use case and usually contain a mixture
of formal on-chain features as well as informal off-chain ones.
This is almost inevitable, as different blockchains are built for
specific purposes, and not all decision-making processes can
be sufficiently captured by a smart contract or special purpose
protocol logic.”
This is an interesting point of view and a great motivation for my work on blockchain interoperability. Interoperability is sometimes the “glue” that aims to obtain the best tradeoff between on-chain and off-chain features.
- Intuitively, Pareto optimality conveys that one party’s utility cannot be improved without any other party’s utility getting worse off. I find Definition 5, Pareto efficiency applied to blockchain governance systems, interesting and intuitive, but challenging to apply in practice: how to systematically measure the impact of a voter on the others?
-”in many ways, all current blockchain platforms either have significant deficiencies in their governance processes, or they allow significant room for improvement. It is worth also reiterating that achieving all stated properties to the highest possible degree is impossible due to their conflicting nature, and as a result, it is inevitable that platforms must decide on appropriate tradeoffs between the various properties that are the most suitable for each particular setting.”
🚀 How does it relate to my work?
-Different blockchain governance procedures exist because there are different blockchains. Connecting different blockchains can be done in a decentralized way (and hence a second-order governance layer is needed).
-Blockchain governance greatly affects the integration capabilities with other blockchains.
🚀 What are the implications to my work?
-Interoperability solutions are on the rise. Some of them have a decentralized nature; others can be more centralized. There is not much research on the governance around interoperability infrastructure, which our work could help cover.
-Gateway-enabled interoperability could benefit from decentralizing governance (on the agreed cross-chain processes and operations, for instance).
