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Within the Crypto Ecosystem, we have gone through many stages regarding the perception of Tokens. From considering them tokens with no value to considering them one of the main problems of the ecosystem due to speculation surrounding them.
Their launch represents a significant risk for the founding team as they are highly likely to be considered securities and may face significant legal challenges.
For this reason, generally, the token launches we've seen have been watered down, attempting to delegate decision-making responsibility to the community.
It's not an easy environment. The reality is that the legal maze in which some founders find themselves due to having conducted a token sale is truly terrifying. No one doubts that Satoshi Nakamoto would probably be in jail now if his identity had been known
Ethereum, probably the most decentralized project after Ethereum, still faces potential legal issues that are far from being resolved. Even though the CME has considered it a commodity, the SEC still leaves the door open to consider it a security in order to take legal action against its founders.
If Ethereum is still in that situation despite being one of the most decentralized projects, we can understand the courage it takes to launch a token for a project. We might think that society would mobilize to prevent it, but the reality is that the Crypto ecosystem doesn't have that capacity. Mobilizations against incarcerated developers haven't caused any public opinion uproar.
However, we can have decentralized projects without the need for a token. Is it really necessary? Can we avoid launching it and still consider the project decentralized?
First, we should define what we understand by decentralization. It would be difficult to discuss this topic without relying on the entire theoretical framework developed by Vitalik. Therefore, let's use one of his articles
The Meaning of Decentralization "Decentralization" is one of the words that is used in the cryptoeconomics space the most frequently, and is often even viewed as a blockchain's entire raison ...
When considering the three axes Vitalik talks about regarding decentralization, we should clarify that not all of them apply to a project on a public blockchain, such as Farcaster.
Architectural (de)centralization In this case, the physical architecture is actually supported by the blockchain on which it runs. Therefore, that axis of decentralization is delegated to the blockchain where it is deployed
Political (de)centralization This is probably the most relevant axis, even though in this case we are talking about coordination decisions among people regarding the project.
Logical (de)centralization In this axis, perhaps we could interpret the ability to create different ways of granting access to the project, since decoupling the project's persistence and its core code doesn't seem easy.
If we focus on the Political (de)centralization, governance aspect, how can we structure a project to have governance that doesn't depend on a small group of people?. What would be the protocol to reach a decision?
We could try to minimize that governance to the minimum, leaving as little room as possible to make decisions. But even setting those limits would imply making a decision. However, we would be condemning the project to not evolve, since to do so, we would have to allow for decision-making.
It's important to note that we cannot expect these protocols to compete with future private initiatives if they don't have financial resources to evolve. It's precisely this ability to have financial resources that has changed the rules for these collective open-source projects, turning them into a real competitor to traditional corporations
If we aspire for these decisions to be made by the community, it will be necessary to have a way to establish that social coordination. Tokens have proven to be a governance mechanism, at least more open and inclusive. Not only governance, but it also opens the door to a shared creation of value. Governance models with NFTs have probably been explored less, but they also seem like possible solutions.
Perhaps in these cases, we should strive for a rational compromise to achieve sufficient decentralization
A design pattern to reduce centralized control and change incentives in social networks.
When we talk about Web3.0, we talk about ownership, we talk about sharing ownership of these projects. However, where can we reflect this reality if there is no registry that can attest to it? In projects that do not aim to evolve, we may do without governance. In any case, even in Bitcoin, processes are eventually structured to reach consensus socially, but they are tremendously inefficient precisely because the goal is to avoid changes.
Crypto projects that haven't issued tokens often have highly centralized governance models, which has its advantages in terms of their ability to be much more agile. Consensus is easier to reach in small groups. Additionally, they don't have the need to share the financial resources they generate with the community.
Perhaps we should rephrase the question as how is it possible to have a decentralized project that constantly needs to evolve without a token.
There might be projects that can come close to achieving those characteristics brought by decentralization, such as open-source code, with unchangeable rules that establish a sort of inviolable constitution, permissionless access to their services, etc. However, it won't be a project we can own, and we'll depend on the people leading the project who may seek public.
**Read, Write, ¿Own?**Jesus Perez Crypto Plaza / DragonStake
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