A recent event in Lisk DAO highlighted the importance of community participation in decentralized governance. The proposal to burn LSK tokens failed due to a lack of necessary quorum, despite receiving overwhelming approval.
What Happened with the Lisk DAO Proposal?
The proposal aimed to burn 100 million LSK tokens from the Lisk DAO's treasury to address the increased supply following the recent migration to ERC-20. Despite a 99.46% approval rate, it failed due to insufficient participation.
Understanding Quorum: Why Did the LSK Token Burn Fail?
Quorum is the minimum number of participants required for a decision in a DAO to be valid. In the case of Lisk DAO, while votes were overwhelmingly positive, the total LSK tokens participating did not meet the threshold, rendering the decision invalid.
The Impact of ERC-20 Token Migration on Supply
The migration to Ethereum led to the minting of an additional 145 million LSK tokens, increasing the overall supply. The burn proposal aimed to manage this supply and mitigate potential dilution of token value.
The failure of the Lisk token burn proposal underscores the importance of community participation in decentralized systems. This incident serves as a reminder that support alone does not ensure success without active engagement.
