Cryptocurrencies promised radical changes in governance and ownership structures. However, many web3 platforms still rely on centralized models. Let's examine how this affects communities and their participants.
Token Distribution Issues
One of the main problems is token allocation. Many blockchain projects start with most tokens in the hands of venture investors and founders, leading to minimal influence for ordinary users when voting.
Governance Structures as Performance
Today's governance systems in crypto typically operate on a 'one token, one vote' model. This creates situations where wealthier participants can shape voting outcomes with minimal input from the broader audience.
Cultural Costs of Centralization in Web3
Communities, which play a vital role in onboarding new users and creating value, begin to lose interest when they realize they lack real power. This may lead to weakened projects and loss of trust in the entire industry.
There needs to be a revised governance model that genuinely considers community participation. If the crypto industry does not change its approach to decentralization, it risks becoming isolated from both communities and regulators.
