1inch launched the governance token named 1INCH to move one step forward to full decentralization. The governance token makes it possible to govern the 1inch network by a DAO. The new governance token in the 1inch network is launched by the independent board of the 1inch Foundation. This foundation will support the launch and adoption of the new token.
The Decentralized Governance Mechanism
Governance is one of the most important parts of decentralized finance. Because there is no centralized organization to manage and support the network, there should be a mechanism to make it possible for the community to govern. Decentralized exchanges like 1inch surely need this mechanism to provide better services to users. A governance and utility token like 1INCH will solve many challenges by providing an incentive and tool for community members.
Most of the DeFi platforms rely on governance tokens to vote for/against new platform changes. Besides, governance token holders can propose changes and improvements to the network. After all, a community-led platform will shape that engages all of the members. Governance will be more democratized, too, because no one has a specific advantage over others. 1inch claims the governance token in the platform is more efficient than other DeFi tokens. According to the announcement:
“DeFi is a rapidly evolving space, but most governance models are not designed to adopt protocol changes quickly to respond to the rapidly evolving market. To remedy this, 1inch Network is launching with ‘instant governance,’ a new feature that allows the community to vote for specific protocol settings under the decentralized autonomous organization (DAO) model, in a transparent, user-friendly and efficient way.”
The 1inch foundation believes the “instance governance” will let everyone participate in the governance mechanism. In other words, every vote matters, and there is no such advantage for some users.
All of the current and future protocols in 1inch will use the 1INCH token. The first protocols to use are the 1inch governance Aggregation Protocol and the 1inch Liquidity Protocol governance modules.
The 1inch foundation describes all of the steps and processes for launching and using the 1INCh token. It says the governance token needs more adoption to improve:
“This is the first iteration of 1inch governance. The more users that are onboarded, the more efficient and transparent the governance process will become. All community members are invited to submit their valuable feedback and proposals related to any governance issues on our new Github repository for 1inch improvement proposals (1IP).”
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