Decentralization is a virtue often emphasized by the crypto community and some project founders Challenge. Indeed, what better than to let the community propose improvements to a protocol and let them vote on it? The problem is that when the voting power is based on the quantity of tokens that its users possess, we can find ourselves in situations that are easily likely to degenerate. In this case, should we forget decentralization for a moment to impose our opinion? The Juno Network community has made its decision…
Juno Network a promising DeFi project of the Cosmos ecosystem
If you are not familiar with Juno Network, it is a sovereign blockchain based on the Cosmos SDK and open source. The value proposition of this blockchain is to allow the deployment of smart contracts in the cosmos ecosystem and to be interoperable with all the other blockchains in the Cosmos ecosystem.
To illustrate the point, we could roughly comparing Juno to the Moonbeam parachain which has enabled the deployment of smart contracts on the Polkadot blockchain, but the comparison stops there.
This blockchain is less important and known than its cousins in the Cosmos constellation. However, it could be a decision made by her community, which makes her infamous.
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Decentralization, yes, but under certain conditions
Although the community can vote for or against a proposal, the community may make morally questionable decisions. Because for the first time in the crypto ecosystem, the community has decided to confiscate a user’s funds.
The reason why the community wants to reduce this user’s JUNO count is that he would have accumulated an exorbitant amount of JUNO tokens during an airdrop. The problem is that JUNO, like other tokens, offers voting power to its users. Consequently, the user in question finds himself with such voting power that he could destabilize the balance of the platform.
Here are the arguments put forward during the proposal:
- High risk for the governance of the chain (half of the quorum is already reached).
- Ability to buy validators with delegations to bribe them into not taking action.
- A whale can single-handedly wipe out all the cash in the DEX in 10 minutes or less.
- Fear in the community on a daily basis.
Pushed against the wall, the “whale” in question expressed itself and presented itself as a group of investors rather than an individual. As a result, what Juno users perceived as airdrop manipulation would rather be ATOM pooling, in order to increase the amount of tokens received. However, the doubt persists.
A community under pressure
Indeed, “the group of investors” wanted to show good faith by indicating its intentions in a post written on Medium (the account was deactivated by the platform):
“In the event that Prop 16 is rejected, we will proceed with the return of all assets to users while paying the utmost attention to not impacting the market. »
This post did not allay members’ concerns. of the Juno community, since it considered that if it was indeed a group of investors, the JUNOs should have already been redistributed.
We will never know if the whale would have kept its promise or not, because during a very tight vote, the community decided to accept the proposal and therefore to reduce the quantity of tokens of the group of investors. The number of tokens available on the wallet will therefore be reduced by 90% passing 3.1 million at 50,000 JUNOs.
Looking at the results presented above, we can see that the community literally tore itself apart over the moral and ethical aspect of this proposal presented as a “dangerous precedent”.
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“Proposal #16 on $JUNO is complicated and there is no simple answer. I think the proposal conflicts with fundamental blockchain principles and sets a dangerous precedent. But more importantly, this proposition is not feasible, governance cannot change the state of the chain! »
These tensions are not about to subsidebecause the proposal was not voted unanimously, but with a small margin of difference. In addition, some members consider that the vote was biased. Indeed, the JUNO airdrop rules were first published in August 2021. But members of the Juno community have implied that a so-called nebulous clause limiting the airdrop by “person or entity” would have been added later (no specific date). This clause would have been put forward to serve as an argument for this proposal, but the latter was perceived as misleading by some.
The problem that presents itself to Juno is the way in which this proposal will be applied, because to withdraw part of the funds from the offending wallet, it will be necessary to modify the blockchain. which can only be done by having using a Hard Fork.
However, using the Hard Fork is never easy. Indeed, validators which are the equivalent of Bitcoin miners on Cosmos could choose to continue monitoring transactions on the original blockchain. But this one could see its number of users decrease and make this enterprise risky from a financial point of view for the validators.
Whether one is for or against this decision, this event is a textbook case and could happen again in the future. Will the Juno Network case serve as case law? Nothing is less sure. But let’s hope that this decision is not counterproductive for the crypto ecosystem, as it would call into question the perceived reliability of the block chain which is based on immutability.
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