Centralized governance refers to a decision-making structure where a single entity or a small group holds primary control over a system. This authority directs operational changes, protocol upgrades, and resource allocation. Such models contrast sharply with decentralized approaches prevalent in many blockchain networks.
Context
The debate surrounding centralized governance in crypto often weighs efficiency against the core tenets of decentralization. While centralized control can enable rapid decision-making and efficient resource deployment, it also introduces single points of failure and potential for censorship. Regulatory bodies frequently scrutinize centralized structures for compliance and consumer protection.
The COAI token experienced a catastrophic failure due to extreme governance centralization and fragile algorithmic tokenomics, enabling a 96% value collapse.
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