This article was first published on Polymath Network - Medium
Polymesh Pillar Series Part 4: Governance on Polymesh
Blockchain governance is the set of rules that outline how a chain is managed, how changes are implemented, and who the key decision makers are — simply put, it’s the constitution that guides a blockchain. Governance can be a very important and difficult topic for any blockchain, not to mention one built for security tokens where the chain is not only the source of truth for potentially billions of dollars, but must also allow investors, issuers, and capital markets participants to fulfill their regulatory obligations.
Look no further than the challenges faced when trying to implement changes to general-purpose blockchains. Not only is a significant amount of coordination required between all nodes running the blockchain’s software, but disagreements on the changes to the chain, or how they should be implemented, can lead to forks (a split of the blockchain leading to 2 separate instances of the ledger up until that point which then continue to operate based on different rules). Who decides which instance of a security token is the right one once a general-purpose chain has hard forked? This situation has no current legal or regulatory certainty, creating an environment that capital markets participants and regulators alike will choose to avoid.
How it Works
Polymesh addresses the challenges that general-purpose blockchains face with governance by building it into the core of the blockchain. This comes to life in two important ways: the approach to upgrades and on-chain governance.
Architecturally, we chose to build on the Substrate Framework. There are many benefits to using Substrate, but key to Governance on Polymesh are Forkless Runtime Upgrades, allowing seamless upgrades on the chain rather than risk hard forks. (This is also what allows Polymesh to be governed completely on-chain more on this soon). Without getting into the technical details, ...
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Polymath Network - Medium