The governance discussion intensifies as decentralized autonomous organizations (DAOs) become more popular in the blockchain space. The dilemma between giving power to a specific few and the freedom to voluntarily delegate decision power was highlighted in a Twitter thread created by Ethereum founder Vitalik Buterin.
In a tweet, Buterin brought up an old adage pointing out that power-hungry individuals are not suitable to lead. The Ethereum founder highlighted that the saying can be applied to DAOs and argued that transferable governance tokens in DAOs contradict the whole point of DAOs. Buterin noted that if governance can be transferred, it enables those who are after power.
While the Ethereum founder presents a valid point, some reacted with contrasting opinions. In a reply, Twitter user Muki pointed out that it’s inevitable to delegate decision power. According to the community member, expecting everyone to participate is impossible, and a voluntary delegation of decision power is better than making uninformed decisions or not participating at all.
Contributing to the discussion, Twitter user Willyogo wrote that holding transferable governance tokens does not equate to wanting to rule people. However, the community member also said that there’s definitely room for improvement for DAOs in terms of voting mechanics.
Twitter user Vagobond also chimed in, saying that having fully recallable delegates is a way to move forward. In this idea, the delegates who were picked could instantly lose their authority the moment they stop representing those who delegated votes to them.
While others focused on governance mechanics, some pointed to the use of blockchain-based technologies like picking important positions in a DAO using verifiable randomness. Another community member suggested randomly selecting token holders and rotating when the selected holder does not show on-chain activity.
In the recent Ethereum Community Conference held in Paris, Web3 adviser Hilary Kivitz discussed DAOs and how they can fight off hostile takeovers. According to Kivitz, there are solutions such as adding poison pills into smart contracts to dilute the votes of exploiters.
Meanwhile, in a recent interview with Cointelegraph, Alex Tapscott mentioned that DAO developments are something to look out for during the bear market. Tapscott highlighted that DAOs have the potential to replace traditional organizations in organizing resources.
Rishi Sunak, the former chancellor of the Exchequer, and Liz Truss, Secretary of State for Foreign, Commonwealth and Development Affairs, two of the final candidates to become the next prime minister for the United Kingdom, have both previously expressed pro-crypto views.
With Prime Minister Boris Johnson soon to be out of office, Sunak and Truss are competing to be the next leader of the Conservative Party and the country, with their views on digital assets likely to influence financial policy. Under Johnson, Sunak requested that the country’s Royal Mint create a nonfungible token as part of an effort to make the United Kingdom a global crypto hub.
A member of Parliament who served as chancellor from 2020 until resigning in July, Sunak previously said the U.K. government would prioritize financial technology, including central bank digital currencies and stablecoins, aiming for the country to keep pace with innovation. He has also been behind many proposed financial services reforms promoting the adoption of cryptocurrencies and stablecoins.
Truss, who has been the Secretary of State for Foreign, Commonwealth and Development Affairs since 2021 and Minister for Women and Equalities since 2019, serving under three prime ministers, called for an anti-regulatory approach to crypto in 2018 in an effort for the U.K. to embrace the technology. In her role as Secretary of State for International Trade, the MP launched a digital trade network in 2020 whose measures included promoting fintech firms that “enable[d] digitisation and resilience in priority export markets.”
Amid Johnson’s expected departure, policy decisions have continued to move forward in the United Kingdom. Nadhim Zahawi, who replaced Sunak as chancellor of the Exchequer, introduced a Financial Services and Markets Bill on July 20, which contained a regulatory framework for stablecoins. The Treasury Committee of the House of Commons also opened an inquiry allowing U.K. residents to write in about the role of crypto assets in the country.
The Conservative Party is expected to decide between Sunak and Truss as the next leader by Sept. 5, at which point Johnson will officially step down. On Tuesday, the two candidates took part in a televised debate that was cut short after moderator Kate McCann fainted while on air.
Senator Sherrod Brown, chair of the Senate Banking Committee, has penned letters to the CEOs of Google’s parent company Alphabet and Apple calling for the tech firms to provide information on the ways they prevent certain apps from promoting crypto scams.
According to the letters published on Thursday, Brown asked Apple CEO Tim Cook and Alphabet CEO Sundar Pichai for the steps the tech giants were taking in the approval of crypto apps on Apple and Android devices. The senator requested information related to how the companies assessed if apps were “trusted and secure,” prevented possible phishing apps through fraudulent apps and reported such apps to users.
“Cyber criminals have stolen company logos, names, and other identifying information of crypto firms and then created fake mobile apps to trick unsuspecting investors into believing they are conducting business with a legitimate crypto firm,” said Brown. “While firms that offer crypto investment and other related services should take the necessary steps to prevent fraudulent activity, including warning investors about the uptick in scams, it is likewise imperative that app stores have the proper safeguards in place to prevent against fraudulent mobile application activity.”
Brown’s letters came following the Federal Bureau of Investigation issuing a public warning about fraudulent cryptocurrency apps on July 18. The bureau reported that scammers had pilfered more than $42 million from 244 people between October 2021 and May 2022, including a case in which an app used the name of a former legitimate crypto exchange.
Speaking at a Thursday hearing with the Senate Banking Committee on "Understanding Scams and Risks in Crypto and Securities Markets," Brown seemed to place some of the burden of addressing crypto scams on platforms and apps on lawmakers and regulators rather than companies:
“We hear industry players call for rules of the road when a big fraud is uncovered, and after a big actor has knowingly violated the law. The rules are there, the roadmap is clear, and [the Senate Banking Committee] needs to make sure our regulators enforce the law and protect the workers and families that keep this economy rolling [...] Industry shouldn’t be allowed to write the rules that they want to play by.”
Gerri Walsh, the president of the Financial Industry Regulatory Authority Investor Education Foundation, said in written testimony for the hearing that some of the $57 million in fines the financial regulator had charged trading app Robinhood in June 2021 would be used toward educating crypto investors, including those using online accounts or mobile apps. Walsh also pointed to scammers using dating and messaging apps to convince victims to send funds or invest in fraudulent crypto platforms and said misinformation on social media was a major factor in the propagation of such scams in response to a question on Instagram posts.
The Federal Trade Commission reported in June that roughly 46,000 people in the United States had lost up to $1 billion in crypto to scams in 2021. The commission said at the time that roughly half of all the crypto-related scams originated from social media platforms through ads, posts and messages.
Cointelegraph reached out to Apple and Google, but did not receive a response at the time of publication.
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