Waves to launch DAO governance framework with token airdrop next year

Quick Take

  • Power Protocol is a model for new and existing DAOs to manage their governance architecture.
  • Waves’ Power DAO will be the first DAO to use the Power Protocol framework.

The team behind Waves is set to launch a DAO governance framework called Power Protocol that will provide the tools for new or existing DAOs to manage their decentralized organizations.

Power Protocol is a new DAO governance architecture that will launch in January 2023, the announcement stated. The Waves team says it is designed to tackle the problems associated with what's known as simple token governance. This is a framework commonly adopted by DAOs, where governance token holders have voting power that's used to make decisions within the community.

Simple token governance is inadequate for DAO administration, stated Waves Founder Sasha Ivanov. Ivanov stated that the model allowed entities with large governance token holdings to sway DAO votes. He added that this was possible because of the lack of incentives and punishments within the simple token governance model.

“Without sufficient accountability built into governance models, bad actors and those who wish to disrupt the decision making process have no deterrent and will keep on gaming the system,” Ivanov stated.

Power Protocol addresses these shortcomings by adding accountability and transparency into the DAO governance architecture, the Waves team stated. This new model combines community-driven key performance indicators with financial rewards or punishments. Good behavior is rewarded with tokens, while bad actions can lead to penalties like vote slashing, where a portion of a user’s governance tokens are reduced and potentially destroyed.

Power Protocol will launch with an airdrop of the system’s native token called POWER. The protocol’s community will decide on the eligibility criteria for the airdrop. Waves’ Power DAO will also be the first DAO to utilize the Power Protocol upon its launch.

Simple token governance has come under criticism in the past. One notable example was when Maker Founder Rune Christensen used his influence to sway a governance vote on MakerDAO to break the organization into smaller DAOs. Ethereum creator Vitalik Buterin has also criticized this model and said he wants to see improvements in decentralized governance.

© 2023 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.