How Do Decentralized Autonomous Organizations (DAOs) Govern Stablecoin Protocols?
DAOs govern stablecoin protocols by allowing token holders to vote on critical parameters. These parameters include stability fees, collateral types, liquidation ratios, and protocol upgrades.
Token holders propose changes, and the community votes using their governance tokens. This structure aims to decentralize control and reduce single points of failure, though voting power often correlates with token ownership.
Glossar
Decentralized Autonomous Organizations (DAOs)
Governance ⎊ Decentralized Autonomous Organizations (DAOs) represent a novel paradigm for organizational governance, leveraging blockchain technology to establish rules and execute decisions autonomously.
Governance Tokens
Token ⎊ Governance tokens represent a mechanism for distributing decision-making power within decentralized protocols, primarily within the cryptocurrency and decentralized finance (DeFi) ecosystems.
DAO Governance
Decentralization ⎊ DAO Governance, within cryptocurrency, options trading, and financial derivatives, represents a shift from centralized control to distributed consensus mechanisms for protocol management.
Stablecoin Protocols
Framework ⎊ The collection of interconnected smart contracts and on-chain logic that govern the lifecycle, issuance, redemption, and stabilization of a pegged digital asset.