What gives onchain governance legitimacy is — you guessed it — the existence of onchain, technically enforced rights of the governance tokenholders. Unfortunately, this is fairly rare. Some major protocols have this: Aave, Sky, Uniswap, Arbitrum, Compound, Curve. But it’s mostly older vintage protocols from the DeFi Summer and 2021-22 era. I’ve not seen an authoritative encyclopedia of governance tokens, but would hazard a guess that most confer zero technical rights to governance tokenholders. This is important because a governance token is typically not a security — there are usually no legal rights attached to it at all, and even less common for there to be an economically significant rights. The down-only trajectory for most governance tokens is because it offers no value to the holder. Governance is work, not a dividend, even when the token has rights. But if you’re just voting on Snapshot and a founder or foundation or team can ignore it with no legal consequences (and it’s Snapshot so there’s no onchain rights to activate here), then that’s just a bad value proposition. Even when tokens DO have onchain rights, sometimes those rights aren’t valuable or the structure of tokenholders is such that a founder or investor has de facto unlimited control of the protocol. In short, making a governance token is rarely appealing to teams who must then give up some power, and it’s not even profitable in many cases because if your governance token trades on fundamentals, it basically will trade worse than the most dogshit meme coins. Of course, onchain powers can be added and removed. Usually we see increasing centralization away from token holder rights. But @Optimism is currently going the other way, which is rarer than hens’ teeth. They’re ADDING onchain powers to the OP token. I’ve been on record for several years now that the OP token was not living up to its “gradual decentralization” promise. All proposal power still rests with the Foundation, who also has unilateral control of proposal types, schedule, and all funds. OP token does have onchain voting, but the voting contract isn’t hooked up to anything much, and the token doesn’t even own its own token contract, much less the Optimism protocol (contrast with Arbitrum where the ARB token does control it). But that’s changing. It’s a baby step — the handoff of proposal power is to the Security Council, not directly to the token and OP doesn’t directly choose Security Council. But it’s worth applauding because it’s so unusual to see a foundation (ever so slightly) loosening its grip on power. Remember: Foundations and founders are the natural predators of governance tokenholders. Generally power shifts only from the latter towards the former. So I want to say, “Thank you @ben_chain” for swimming upstream in the correct direction.