Introduction
Web3 continues to deliver enormous economic value to everyone that gets involved in any of its many aspects. Whether it is crypto trading, liquidity markets or even blockchain games, there is so much value to be appreciated. One sector that web3 is really making its impact felt is in the area of decision-making. Web3 have taken the powers of decision-making from the hand of a few privileged individuals to the community.
Decentralized or community governance enables everyone to take part in making rules that govern a group or an organization. There are many benefits that come with this type of governance. Before we get into that, lets look at some of the common challenges of centralized governance which is a popular model in todays organizations.
The problem with centralized governance.
1. Error prone: The first challenge of allowing an individual or a very small group make decisions within a large organization is that their views, experience and insight could be limited. There is always that wisdom of the crowd which would be missed dearly missed if few people or just one person takes makes decisions.
Because of the limited scope of the few decision-makers, they are prone to make mistakes. And when such mistakes are made, it affects everyone in the organization. Collective decision-making always brings better results than centralized ones.
2. Shrouded in secrecy: When a management makes decisions, it is always lacking transparency. The steps or considerations that led to a particular decision is not always explained to others. Because of this secrecy, other members of the organization are left in doubt as to why such a decision is reached especially if it is not a popular decision.
Lack of transparency in decision-making leads to lots of doubts and suspicion. Other members of the organization might make wrong assumptions about the decision. They might think that it was engineered to favor a group, or that their is are some selfish gains such a decision would produce. This kind of distrust can break up a united group.
3. Abuse of Power: When a few individuals are left to make decisions for others, they could feel powerful and abuse such power. Centralized governance has led to the downfall of some organizations where a few members of the management make financial decisions that are ill-informed.
Financial mismanagement is the most popular for of abuse of power from centralized governance models. A few bad actors that are in positions of authority might conspire to secretly steal company funds or even divert some or all of the funds meant for a project. This and other examples show the dangers of having too much power concentrated in the hands of a few persons.
4. Inefficient representation: An organization is usually made up of diverse groups whose interests and motivations might differ. Having few people make decisions for a diverse community could lead to marginalization. The interest of all could not be represented and that could lead to uprisings or conflicts of interest.
When a small team or individual makes decisions for the group, it could be biased too. There decisions might just cater to their personal interest and leave out the interest of some heterogenous group. This could lead to endangering the interest of stakeholders in the organization.
The above are some of the challenges of having a few people make all the decisions for everyone in a large organization. Now we will see how Web3 solves all these issues with an innovative approach to decision-making
Web3 decentralized governance
Web3 introduced the concept of decentralized governance largely brought about by blockchain technology. it puts the power to make decisions in the power of users that for the main audience of an organization. Instead of having just one person represent everyone, decentralized or community governance empowers individuals to speak for themselves and participate in decision making.
The benefits of allowing everyone the opportunity to make a contribution towards collective decision-making is enormous. Consider the following:
1. Total autonomy and representation: Community governance allows everyone's views to count. It is a way to make people responsible for the rules they will abide by. It gives all participants a voice, allowing them to be heard. The main big benefit of this is that the collective decision is made with the interest of everyone at heart.
Community governance allows users not just to be governed, but to participate in governance. Once decisions are reached in such an organization, there are no complaints because everyone contributed to such decision being made.
2. Checks and balances: Community governance is the best way to ensure that power is not abused. It is a way for all members to ensure that selfish interests are not allowed to influence decisions. Each person is free to air their view or disagree with others choices. When the community senses that a particular component is trying to influence decisions for personal interest, the power of the crowd is used to annul such bad motives.
Community governance thus helps members to ensure that bad actors lack all the power needed to pursue selfish interests through decision making. Everyone has equal powers to influence decisions. Hence, it is impossible for a single entity to achieve selfish ambitions in a decentralized governed organization.
3. Inclusion: An organization that uses decentralized governance makes everyone have a sense of belonging. No groups are removed or marginalized for any reasons because everyone has the power or stake to participate. Hence, all demographics are involved in reaching any conclusions or decisions.
This is a great way to ensure unity and cooperation among members of an organization. Everyone feels important. Everyone is consulted and there is unanimous consensus before decisions are made or carried out. In an organization that practices decentralized governance, there are usually very few or no disagreeing voices because it was a collection decision.
4. Collective responsibility: In decentralized governance, everyone becomes accountable for the outcome of any decisions made. No one blames the other if things go wrong. There is no single point of failure because it was done collectively.
Decentralized governance is usually successful because it draws on the wisdom of the crowd. That usually gives little room for massive failures or mistakes. In case there are errors along the way, everyone becomes responsible.
Conclusion
The future of successfully run organizations is in decentralized governance. Blockchain technology and web3 continues to champion this governance model. It is a transparent and hybrid model of democracy. But in this case, power actually belongs to the power to make decisions.
Credits
Posted Using LeoFinance Alpha