PoS governance structure

Governance in Proof of Stake systems revolves around decentralized decision-making, whereby participants in the network should have an active role in shaping its future. Unlike in traditional systems, where most actions revolve around the central authority, PoS places responsibility on and relies upon its community of token holders and a set of validators to participate in the processes of governance. Such an approach goes in the direction of aligning the interests of network participants by giving them a direct say in the development and operation of the blockchain.

In PoS governance, it enables token holders to vote on proposals, which might range from protocol upgrades all the way to policy changes in the network. Voting power is usually based on the tokens held, and participants holding the largest stake would proportionately have a more significant influence on the outcome. In design, it has been that the most invested in the network should have a vested interest in the network's success, although this also produces concentrations of power that raise other concerns.

In general, PoS systems come with some kind of on-chain governance mechanism: proposals are created and then voted on transparently. Everything is recorded on the blockchain, and smart contracts may enforce the result directly. Decisions are publicly verifiable, helping to build trust in its accountability. However, it faces very dangerous scenarios of low voter turnout and the possibility for big stakeholders to game votes. Still, the PoS governance structures are evolving to optimize decentralization, efficiency, and community participation.

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