This analysis is based on an article by a16z crypto.
Couple of days back, i stumbled upon a NEWS that Algorand Foundation is no longer non-profit. They have merged with Algorand Technologies, the software development firm that heads protocol development. With this context in mind let us see what this article says.
Here a16z argues that the foundation era where a centralized, non-profit entity indefinitely manages a protocol is officially over. They argue that for true decentralization and regulatory safety, protocols must transition to a unincorporated association or a decentralized statutory association.
Reasons:
1) Without clear feedback loops or direct accountability foundations or its employees don't have the incentive to drive blockchain growth
2) Foundations are not legally able to build adjacent products or engage in types of commercial activity, even where it would substantially benefit the network.
3) Artificial barriers between interdependent functions (Example: Protocol development and Business Development) slow development, inhibit coordination, and ultimately degrade product quality for everyone.
4) Foundations slowly transform themselves into centralizing actors that control treasury keys, critical operational functions, and network-upgrade rights.
Do you think it is time to move away from foundations or should the blockchains follow the status quo ?
The End of Foundation Era Crypto
byu/semanticweb inCryptoCurrency
Posted by semanticweb
2 Comments
Interesting movement of Algorand. If foundations limit agility and create barriers between development and growth, it makes sense to explore more flexible models. The key will be to see if this fusion really improves coordination and accelerates the evolution of the ecosystem, or if it only changes the structure without solving the underlying problems…
Algorand was a VC funded protocol from the beginning, and the foundation also had its own division (algo ventures) dedicated to VC funding other projects. The foundation part was really just to ring fence certain areas of financial compliance imo. The only real foundation/protocol with legitimacy is Ethereum and that isn’t changing.