What Is the Concept of a ‘Skin in the Game’ Mechanism in Crypto Governance?

'Skin in the game' refers to requiring participants to have a tangible stake or financial commitment tied to the success or failure of their governance decisions. This can be implemented by requiring a deposit to submit a proposal, which is forfeited if the proposal is deemed malicious or fails to meet a quorum.

It aligns incentives, ensuring voters and proposers are financially motivated to act in the best interest of the protocol.