CBSA Blockchain Governance & Economics 1 — Questions and Answers
Question 1: In on-chain governance, what is a 'quorum requirement'?
- The minimum number of validator nodes needed for block finality
- The minimum percentage of voting tokens that must participate for a vote to be valid (Correct answer)
- The maximum number of proposals that can be active simultaneously
- The time delay between proposal submission and voting start
Correct answer: The minimum percentage of voting tokens that must participate for a vote to be valid
A quorum requirement ensures governance decisions reflect a meaningful portion of stakeholders by invalidating votes where participation falls below the set threshold.
Question 2: What is the primary risk of plutocratic governance in a token-weighted voting system?
- Proposals take too long to pass due to high quorum requirements
- Large token holders can dominate decisions, potentially acting against smaller stakeholders' interests (Correct answer)
- Smart contract bugs can corrupt vote tallies
- Token holders cannot delegate votes to representatives
Correct answer: Large token holders can dominate decisions, potentially acting against smaller stakeholders' interests
Token-weighted voting concentrates power with wealthy holders (whales), allowing them to control protocol direction in ways that may not align with the broader community's interests.
Question 3: What is 'vote delegation' in a DAO governance model?
- Transferring token ownership to a governance committee permanently
- Allowing token holders to assign their voting power to a trusted representative without transferring tokens (Correct answer)
- Splitting a proposal vote into multiple sub-votes
- Automating votes based on predetermined rules
Correct answer: Allowing token holders to assign their voting power to a trusted representative without transferring tokens
Vote delegation enables liquid democracy within DAOs, where passive token holders can assign their voting weight to active, knowledgeable delegates while retaining token custody.
Question 4: In a blockchain protocol upgrade scenario, what is a 'hard fork' governance event?
- A scheduled software patch applied to all nodes simultaneously
- A backward-incompatible protocol change that splits the network if not all nodes upgrade (Correct answer)
- A temporary pause of the blockchain for maintenance
- A governance vote conducted entirely off-chain
Correct answer: A backward-incompatible protocol change that splits the network if not all nodes upgrade
Hard forks require all network participants to upgrade or risk being on a divergent chain; if consensus is not reached, the network permanently splits into two incompatible blockchains.
Question 5: What governance mechanism does Ethereum's EIP (Ethereum Improvement Proposal) process represent?
- On-chain token voting for protocol changes
- An off-chain, rough-consensus process where developers, miners, and stakeholders debate and accept protocol changes (Correct answer)
- A DAO smart contract that automatically implements approved upgrades
- A centralized committee that approves or rejects protocol changes
Correct answer: An off-chain, rough-consensus process where developers, miners, and stakeholders debate and accept protocol changes
The EIP process is an off-chain social coordination mechanism relying on developer discussion, community feedback, and rough consensus rather than formal on-chain voting.
Question 6: What is the purpose of a 'timelock' in a DAO smart contract governance system?
- To freeze token transfers during a governance vote
- To enforce a mandatory delay between a proposal passing and its on-chain execution, allowing users to exit (Correct answer)
- To limit the number of proposals submitted per week
- To automatically expire proposals that do not reach quorum
Correct answer: To enforce a mandatory delay between a proposal passing and its on-chain execution, allowing users to exit
Timelocks give community members a window to review passed proposals and exit the protocol if they disagree before changes are irreversibly executed on-chain.
CBSA Blockchain Governance & Economics 1
In on-chain governance, what is a 'quorum requirement'?