Vitalik Buterin opposes governance token speculation

Ethereum founder Vitalik Buterin does not want end users to speculate or hoard DAO tokens.

According to the unique concept, governance tokens designed for the function of voting on proposals in the local community. The extra governance tokens a holder has, the extra voting energy they have.

Vitalik Buterin expressed concern that governance tokens are getting “degraded” as lots of people today are attempting to promote them for revenue or hoard to achieve far better management, which is towards the principle of distribution.

Vitalik shared his place on November 29:

The notion of “governance rights” as a narrative of why a token need to be useful is pathological. You are virtually saying “I am buying $X because later someone might buy it from me and a bunch of other people to skew the protocol towards their special interests”

— vitalik.eth (@VitalikButerin) November 29, 2022

“The notion of ‘governance’ that makes governance tokens valuable is misleading. It’s like buying $X because later someone or some group can buy it from me to turn the protocol into something for their own benefit.”

Vitalik further commented that this will create an opening for those with ill intentions to attack the protocol. He also opposes speculation about the future prices of governance tokens.

But not all DAO tokens are created equal, some tokens have uses beyond voting rights. Take ApeCoin for example, although ApeCoin was initially launched as a DAO token issued by Yuga Labs to NFT holders authorized to vote in ApeCoin DAObut it is actively predicted by many people in terms of price and trades Long/Short similar to Bitcoin or Ethereum.

ApeCoin was later accepted as a form of payment for Yuga Labs NFT and the upcoming game. Other side. It’s still, Gucci also said it accepts payments with ApeCoin in some of its shops.

Even as Buterin urges cryptocurrency users to reconsider the value of “governance” and get rid of arguments that challenge decentralization, there is unlikely to be a major adjust in consumer habits.

Instead, the founder of Ethereum took the initiative to make a personal token normal that has governance functions and will not be transferable from one particular particular person to a different, termed the “Soulbound Token (SBT)”.

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