Governance
SKALE Network is a network of Layer-1 blockchains with a root security anchor in Ethereum. The distribution and staking of the the SKL utility token enables decentralized governance of the SKALE Network. Delegated and staked SKL tokens enable voting on SKALE DAO governance proposals, thereby facilitating SKL delegators to collaboratively guide the evolution of SKALE.
A Refresher on SKALE Network
SKALE Network is a high-performance, cost-effective blockchain network. Developers utilize SKALE to build user-friendly and performant decentralized applications (dApps) benefiting from the scalability offered by the SKALE Network.
Launched in 2020, the SKALE Network has continuously improved its performance and scalability. The SKL utility tokens facilitate decentralized control over the SKALE Network and its underlying infrastructure. Staked SKL tokens permit voting on SKALE DAO governance proposals, enabling SKL token holders who stake to influence the future of SKALE collectively.
What is governance?
Governance refers to decision-making processes and actions by which systems update and maintain themselves. Traditional governance in companies, governments, and institutions involves a decision making process that is relatively centralized and permissioned - for example processes that are made by a board of directors elected by shareholders.
Web3 technologies, like SKALE’s protocols and chains, are initially developed by companies but progressively become decentralized with the growth of a user and stakeholder community. This progressive decentralization typically involves DAO formation and launching a process by which certain stake holders may vote. In this way, the SKALE DAO, a decentralized autonomous organization, has decision-making authority over the SKALE Network and its associated technologies. To steer the SKALE DAO, staking SKL tokens signifies DAO membership. Staked token holders can vote on DAO proposals.