Social Coordination in DeFi Governance

There is a fair amount of overlap between governance frameworks used throughout DeFi. Most have a system for pushing code and/or parameter changes on-chain, a multisig for the distribution of the community treasury for grants, public goods, etc. A number of similar systems for putting varying degrees of power over these processes in the hands of token holders have also been adopted throughout DeFi in recent years. 

As on-chain decentralized governance mechanisms grow in complexity and sophistication, though, intricate social layers have also started to form more fully. These layers are arguably equally as or more important than explicit on-chain governance in determining a project or community’s high-level direction. Many of these systems are convergent towards more traditional corporate structure in many ways, with final say in the hands of token holders.