FOSS Governance and Blockchain Networks

The Meaning and Stages of FOSS Governance

Governance can be defined as the process of applying any design feature or control mechanism that maintains and steers a system. Governance of FOSS projects consists of the following:

  1. Ownership and management of assets (incl. intellectual property)
  2. Documentation outlining the project’s vision and policies
  3. Software development and upgrade process
  4. Community management and social control/norms
  5. Conflict resolution and the creation/changing of rules
  6. Tools and methods of communication and organization

Types of FOSS Governance

Taxonomies of FOSS governance focus on software licenses, organizational structure, and the general ethos of the project. Most FOSS projects can be placed on a spectrum between mechanistic/hierarchical vs. organic/distributed ecosystems, or open/reciprocal vs. more restrictive/commercial approaches to software licensing. [3] Beyond that, further distinctions can be made based on the distribution of decision-making power, or how a particular project manages their software development process and stakeholder relations.

Best Practices in FOSS Governance

The success of FOSS governance can be measured by the quality and adoption of the software over time, the frequency and handling of major conflicts, and the general health of relations within the project’s ecosystem. There is no single correct way to govern a FOSS project, and a variety of systems have proven effective under different circumstances. However, certain best practices have been highlighted in research.

FOSS Governance in Blockchain Networks

The governance of public blockchain networks and decentralized applications (dapps) is spread between three points of control. First, the rules inscribed in the protocols that enable and limit the interactions between various network participants; second, coordination of the software development and upgrade process; and third, managing the rights and relations within the broader community of stakeholders, including network operators, end-users, and investors. Activities that are facilitated by or recorded on the blockchain are referred to as on-chain governance, whereas activities that take place independently of the blockchain are referred to as off-chain governance.

  1. As cryptographically secured and openly verifiable data structures, blockchains are often used to store financial values or transactional logic that require strong settlement or execution guarantees, even in adversarial computing environments. As a result, both legitimate software upgrades and malicious cyberattacks may affect the issuance, distribution, or safety of network-specific digital assets (tokens), which means that users of the blockchain (who hold the private keys for controlling these assets) have very explicit financial interests tied to how the network evolves.
  2. Many blockchain communities aspire to build systems that are public, permissionless, user-owned, and user-operated. The source code is generally open for everyone to inspect and improve upon. Network participants are free to either run the published software or not and, in case of major disagreements, launch a competing network by forking either the code, data, or both. To reduce the need for transparent social coordination, some communities avoid formal governance and try to make as few major changes to the core protocol as possible. [10] Others argue that blockchain systems must evolve over time, creating a need for transparent and legitimate means to make and implement decisions with minimal disruption in the services provided by the network. This has led to various experiments in decentralized governance, including careful curation of public discourse, formation of elected expert or technical committees, and attaching formal governance rights to network- or dapp-specific tokens held by different stakeholders, which usually means voting to ratify proposed software upgrades, tweak various system parameters, or allocate common pools of resources. [11] [12]
  3. The most fundamental value proposition of blockchain networks and dapps has to do with decentralization, or not having to rely on centralized intermediaries that have the ability to censor transactions or unilaterally change the rules of the system. Therefore, any governance mechanism that re-introduces central points of control and failure may undermine the core purpose of using a blockchain instead of a more centralized solution. Importantly, this includes technical centralization, which can be avoided by ensuring the availability of multiple software implementations developed in different programming languages. Public blockchain communities are thus faced with a very difficult challenge of reconciling the ethos of decentralization with the need for effective and legitimate governance.

Footnotes

[1] Markus, M. L. (2007). The governance of free/open source software projects: monolithic, multidimensional, or configurational? Journal of Management & Governance, Vol. 11, pp. 151–163. Available here.

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