Home Ethereum CAD differences? Ethereum Co-Founder Vitalik vs. Binance CEO CZ

CAD differences? Ethereum Co-Founder Vitalik vs. Binance CEO CZ

0
CAD differences?  Ethereum Co-Founder Vitalik vs. Binance CEO CZ

Here’s what Ethereum co-founder Vitalik Buterin and Binance CZ CEO have to say on the controversial but fundamentally important topic of DAO governance.

Vitalik of Ethereum, CEO of Binance CZ Comment on DAOs

Decentralized Autonomous Organizations (DAO) were created to replace centralized, top-down corporate governance. DAOs can be hard to define – some say Bitcoin is the only “true” DAO, others say Etherum’s DAO was one of the first practical DAOs, and others have varying views on the potential advantages and disadvantages of DAOs in theory and in reality.

Here’s what two prominent crypto figures, Ethereum co-founder Vitalik Buterin and Binance CEO Changpeng Zhao (CZ) have to say on this fundamental issue.

Buterin was an early advocate of DAO-based governance, and remains so to this day. Recently he published a blog entry on the topic, titled “DAOs Are Not Corporations: Where Decentralization in Autonomous Organizations Matters.”

From Buterin’s Twitter feed

In his Blog, Buterin refers to three types of situations where decentralization is essential. They are:

  • Decentralization to make better decisions in concave environments: This is where pluralism and even naive forms of compromise are on average likely to outperform the kinds of coherence and concentration that arise from centralization.
  • Decentralization to resist censorship: Applications that must continue to function while resisting attacks from powerful external actors.
  • Decentralization as credible equity: Applications where DAOs perform nation-state type functions, such as providing basic infrastructure, and therefore characteristics such as predictability, robustness and neutrality are valued above efficiency.

Buterin said, “When decisions are convex, decentralizing the decision-making process can lead to confusion and shoddy compromises. However, when concave, relying on the wisdom of crowds can yield better answers and in these cases, DAO-like structures with large amounts of diverse input going into decision-making can make a lot of sense.

Does the entire crypto ecosystem subscribe to Buterin’s thought process? Unsurprisingly, no.

A Forbes contributor, though broadly bullish on DAOs, said many DAOs “are flat in coordination, efficiency, governance and scaling – unsurprisingly. Change of this magnitude is difficult to institute rapidly.

He said: “The DAO dilemma considers this gray area between centralization and decentralization; instead of rushing development or hastily overturning existing frameworks, we can approach DAOs through the prism of incremental decentralization – moving methodically from centralized to decentralized governance.

CZ a DAO bear?

In a interview Last year, Binance CEO Zhao said that DAOs were a great concept, but frankly, there have been hardly any significant or successful DAOs.

He added that decentralized organizations are great in concept, but a critical flaw is that their rules need to be defined from day one: those rules need to consider all business implications; which must be included in the protocol; and it must be bulletproof so competitors cannot easily attack the structure.

More recently, he elaborated on this point of view on Twitter:

As the largest crypto exchange in the world with the third largest coin by market capitalization (excluding stablecoins), Binance continues to grow as an organization.

A contributor to Looking for Alpha said this growth could make Binance “dangerously large” because Binance is a centralized entity and a blockchain.

LEAVE A REPLY

Please enter your comment!
Please enter your name here