Governance tokens: Melonport, 0x, Maker, Aragon

An awesome article about governance and most popular governance tokens. It’s just so on point! 🔖 The maximum price a network participant (maybe a relayer) will pay for 51% of governance tokens is bound by the cost associated with a network fork. Cost is equal to the difference between the net present value of the pre-fork and post-fork business.

The most obvious problems with governance tokens:
1. Plutocracy. Governance tokens which have only coin voting mechanism in place are like pre-selling a new cartel system (the first ones to grab the supply win). So since we moved away from nodes implementing all the changes, and give the power to users - does this model actually solve what we wanted?
2. Hard to calculate the token valuation, or even impossible. The network value here might be completely different from the token value (see Aragon and 0x). The question here is do you really lose the network effect here? You are supposed to, that is the assumption, but perhaps it’s not even the case.
3. Generalized mining, instead of ICOs or private sales, is probably better suited for governance token models. More users, less speculators. But essentially you still end up with speculators there, since coin voting = economic incentives. Maybe it’s escaping the intended scenario yet again.

a) Aragon: probably a bad governance model where latest coin voting had no turnover. (read the edit below)
b) 0x aka ZRX is just a bad model too, and there is not even governance in place yet (hello, hydro fork).
c) MakerDAO is the best concept in place since there is a link between network value and token value (because it is more of an equity token where you can have diluted ‘shares’ in case of bad governance, so essentially it’s a security token much more than the others, not even a doubt).
d) Melonport has a hybrid implementation trying to balance of different councils responsible for different features, where there is still central authority checking off on ‘identities’ - probably too complicated for what it needs to be doing, but creative.

Overall, governance tokens do not seem to be doing much if it’s just coin voting. Implement a link between the token value and the network value, and you end up being labelled as an outright security… so be it? Let’s discuss in @tokencode (and also feel free to join @cryptocodereviews and @de_fi for quality discussions).

EDIT (27.12.2018, 00:00 CET): Aragon has more use cases to its token than ZRX, and ANT is used for staking as collateral where they attempt to minimise the risks of volatility by a reserve fund, and also for governance to control the inflation rate. The token does have multiple use cases within the system, and those look decent. You can find the whitepaper here.