Pantera Capital Partner on Decentralized Governance of Crypto Protocols
Recently, Lauren Stephanian, a Partner at crypto-focused investment firm Pantera Capital, shared her thoughts on some of the main issues with decentralized governance.
Stephanian made her comments while speaking on September 21 at a panel (titled “What’s Next for DeFi Governance”) at Messari’s annual conference Mainnet (September 21-23, 2022) in New York City:
She said:
- “One thing that is Interesting about governance in a decentralised world is that it means something different to every protocol and you can set it up differently. You could have different thresholds for what it means to be a voting member unlike centralized business, where normally just the board and some executives are in control.“
- “I think primarily what we’ve seen emerge is kind of a small group of people who have been voted in or who have the largest amount of tokens being able to vote. And it just makes things a little bit easier when there’s a smaller group making the decisions, but I think we’re seeing different nuances when it comes to different protocols and what it means to be somebody who’s in a position of making those decisions.“
- “It’s a little bit easier to replace somebody in protocol where the organisation is flatter and it’s harder to replace people in positions of power in a centralized company and it can lead to a bad culture, a decline in revenue, things like that. So, definitely excited for different models of decentralised governance.“
- “I think as a user you can determine based on public forums do I want to participate in this and and become a voting member of this protocol. As an investor, you can make a decision based on things that have been proposed and how voting has gone. Do I want to invest in this protocol? Does it make sense?“
- “I think there’s different level of governance needed for a DAO like “Friends With Benefits” versus a venture DAO where you need to make decisions quickly and work very closely with the investments that you’re making and I think they require like a different threshold of governance.“
- “I think the most common standards I’ve seen emerging are very general. I’ve seen lots of projects either basically be weighted by stake, in terms of your vote, or voting members with specific skill sets into these positions of voting power. But beyond that, I think we’ve seen a lot of experimentation, but nothing has kind of taken off, I guess, and been commonly adopted across many protocols.“
https://youtube.com/watch?v=fJYzQdIZ7rg%3Ffeature%3Doembed
Despite the current economic climate, crypto investment firm Pantera Capital CEO and Co-CIO Dan Morehead believes that blockchain development will continue unaffected.
The VC is confident in the long-term potential of blockchain technology, even though the market may not be feeling this way at present, and according to a report by Cointelegraph, during an interview on September 23, he told Real Vision:
“Like any disruptive thing, like Apple or Amazon stock, there are short periods of time where it’s correlated with the S&P 500 or whatever risk metric you want to use. But over the last 20 years, it’s done its own thing. And that’s what I think will happen with blockchain over the next ten years or whatever, it’s going to do its own thing based on its own fundamentals.“
“We’ve been very focused on DeFi the last few years, it’s building a parallel financial system. Gaming is coming online now and we have a couple hundred million people using blockchain. There’s a lot of really cool gaming projects, and there still are a lot of opportunities in the scalability sector.“
Despite the downtrend in venture capital, there are many people who believe that it will rebound in the future. Cointelegraph Research’s data says that August inflows dropped 31.3% compared to July (which saw inflows totaling $1.98 billion).
Sandeep Nailwal, the managing partner at Symbolic Capital, told Cointelegraph:
“Everyone was expecting M&A to take off in crypto as we headed into this bear market, but we haven’t seen that happen yet. I think the main reason for this is that the downturn hit the industry so fast and so intensely that even large companies poised as aggressive acquirers were so shell-shocked by the crash that they had to make sure their own balance sheets were in order before looking elsewhere for growth.“
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