Thread by @msteis

1/ Governance tokens are the alpha and omega of #crypto and #defi - vast majority of the top 100 tokens by market cap are or will be governance tokens (except for stablecoins) - Here are the 5 key considerations to nail when designing your own governance token 🚀👇

2/ Scope - Think about what the key aspects of your token network are that are governed by your governance tokens - the key is to keep it simple - opaque and inconsistent gov. models make it difficult for stakeholders to coordinate around a shared goal.

3/ Mechanisms - Consider the mechanism you’re going to use, e.g. quorum, on-chain / off-chain governance, delegation of votes, requirement to lock tokens when voting, etc. - there is no right way to configure your governance system, do what works for you and your community.

4/ Participation - Think about how to ensure that people participate in your governance processes - explain the process as simply as possible, make people with good ideas feel included, always make sure to maintain a lively forum.

5/ Decentralization - Consider how you’ll make sure that your network is not governed by whales only - this is a difficult nut to crack, but the answer might be in mechanisms like quadratic voting.

6/ Safety - Think about how you’ll protect your gov. system from malevolent actions, e.g. flashloan gov. attacks - keep track how many of your tokens is staked in pools on protocols allowing for flashloans like @AaveAave or @dydxprotocol and keep track of the risks.