A Galaxy Digital report on Ethereum governance highlights a decentralized model that dispenses with direct on-chain voting by Ether (ETH) holders, opting instead for an off-chain decision-making system. This approach involves several key groups, such as developers, node operators, and the Ethereum Foundation, who collaborate on discussing and implementing changes.
The absence of direct on-chain voting aims to prevent large ETH holders from exerting disproportionate influence over the network, thus promoting a fairer balance of power.
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However, this system also faces significant challenges in terms of transparency and open participation. Although the report finds current governance to be transparent and inclusive, it recognizes that there is room to improve the way the user community is involved in the decision-making process. The Ethereum Foundation, in particular, plays a crucial role in supporting development and innovation within the network, but its role and the way it interacts with other stakeholder groups could benefit from greater clarity and openness.