Galaxy Digital released a report showing that decentralized governance of Ethereum is trending

Galaxy Digital has released a report showing that Ethereum’s decentralized governance is driven by off-chain voting rather than on-chain Ethereum holder voting.

Christine Kim, vice president of research at Galaxy Digital, released the report on June 3. It reveals the many actors who hold the keys to the governance of Ethereum.

According to the report, groups collaborating on off-chain operations include customer teams, validator node operators, the Ethereum Foundation (EF), and decentralized application (DApp) developers.

Cointelegraph contacted Galaxy Digital for comment but did not receive a response at the time of publication.

Customer teams and verification node operators

According to the report, customer teams play a critical role in decision-making, submitting proposals, discussing and implementing changes through Ethereum Improvement Proposals (EIPs).

“Customer teams create and maintain the software necessary to operate and connect to the Ethereum network.”

The report also highlighted that validator node operators have “agency to enforce or reject code changes” made on the Ethereum network – essentially voting in choosing which version of the software to run.

Although the FE’s direct influence has diminished over time, it still supports Ethereum’s development efforts as “the oldest and largest non-profit organization (…).”

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Decentralized application developers, forums and communities

Kim’s report also found that decentralized app developers influence certain features and upgrades based on user needs.

“Decentralized application developers are the primary users of Ethereum, interacting with the Ethereum database to publish smart contract code.”

According to the report, discussions on off-chain governance are also conducted through forums, making it easier to build consensus among stakeholders.

“Governance discussions are taking place in several forums: Ethereum All Core Developers (ACD) calls, ETHMagicians,, Discord and GitHub.”

about: SEC Ethereum ETF decision unlikely to be driven by politics: Bernstein

Off-chain or on-chain?

The report also highlights the reasons for Ethereum’s preference for off-chain governance over on-chain voting, due to the risk of large Ethereum (ETH) holders exerting greater influence.

“No decisions are voted on by ETH holders through on-chain proposals or decentralized autonomous organizations (DAOs).”

An off-chain approach prevents centralization and maintains accurate decision-making despite the “difficulty of objective audit and evaluation.”

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