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- VeChain’s Chief Scientist Peter Zhou has highlighted the advantages of the governance model of the VeChainThor blockchain compared to Bitcoin and Ethereum.
- VeChain’s governance model is made up of 3 components or elements with different decision-making capabilities.
In a new episode of the BootCamp webinar series, VeChain‘s chief scientist, Peter Zhou, discussed the highlights of the VeChainThor blockchain governance model. Compared to Bitcoin and Ethereum, VeChain’s governance model is especially aimed at business use and creating value for its users. According to Zhou, VeChain’s governance model follows the elected board design which he summarized as followed:
(VeChain’s governance model) has a robust detailed design, utilizing a mutually reinforcing mix of legal, cultural, market, and code elements to help steer the collective.
Zhou then explained that VeChain’s governance model consists of 3 bodies or components: the Steering Committee Board, the Economic Node and X Node operators. In that sense, Zhou explained that the first component is in charge of managing daily operations, proposing and voting on critical changes (for example, the price of Gas for validating transactions in VeChainThor). Additionally, board members can decide whether a proposal is submitted to a shareholder vote.
On the blockchain, however, the majority of the voting rights are held by the nodes. The new governance introduced in December 2019 gives the majority of votes and authority back to the community by giving Economic Node and X Node operators a voting right that can account for up to 60% of votes. The remaining 40% of the votes are held by the owners of the Authority Masternodes
The individual voting power varies in relation to the number of tokens a user has and the time he has kept them. The minimum vote for any user is 1 and the maximum number of votes is held by the Authority Masternodes, as shown in the following chart.
Finally, the chief scientist of VeChain explained that the Steering Committee Board makes decisions about all emergencies in the network. In this sense, the members have the possibility to take temporary measures, but decisions with greater weight still require the votes of the shareholders, even if they are only approved for a limited period of time.
VeChain’s model better than Bitcoin and Ethereum?
In contrast, Bitcoin’s governance model makes its decisions through proposals that are approved by the core developers. Then, the proposals are put to a vote on-chain and the miners decide if the proposal is implemented. This occurs through a soft or hard fork. However, as stated in by VeChain’s Zhou, proposed changes are not implemented because of a lack of consensus with the core developer community.
On the other hand, Ethereum’s governance model has similarities with Bitcoin. The changes are proposed by the developers and have to be approved by the miners. However, Zhou also criticized the lack of transparency regarding the Ethereum governance model and the way decisions are made. Specifically, he criticized the plutocratic decision-making at Ethereum and the lack of a mechanism for community participation in decision-making.
One of the advantages of VeChain’s governance model is that the Steering Committee Board members who make the most important decisions can be elected. In that sense, there is greater transparency about who proposes changes, who can vote and how many votes a given stakeholder has.
Below you can see the full episode of VeChain’s webinar:
Last updated on July 23, 2020