Crypto custodian Anchorage Digital is taking a strategic step to address the rise of different protocols and tokens in the crypto market by enabling Snapshot voting for its custody customers. The firm aims to enhance its customers’ participation in crypto governance through its off-chain voting platform, Snapshot. This integration will support more than 60 ERC-20 tokens and provide an easier way for clients to interact with various protocols without interoperability issues.
Anchorage Digital President Diogo Mónica explains that the advent of numerous protocols during the early days of DeFi made it difficult for firms to develop interoperable solutions, resulting in a fragmented ecosystem. By offering Snapshot voting, Anchorage Digital seeks to overcome this challenge by establishing an in-house ecosystem of governance tokens that interact seamlessly with individual protocols.
Crypto governance has witnessed varying degrees of success in engaging token holders. Decentralized digital asset owners, including DAO participants, have previously relied on online forums, Discord, and Twitter for voting and decision-making. This approach often created noise, confusion, and disorganization in the governance process.
Anchorage Digital’s solution aims to cut through this noise and streamline governance efforts, ensuring that clients can participate in protocol governance without the need for one-off tools that require interaction with each protocol separately. The company plans to extend support to all applicable future ERC-20 tokens by default, making the process even more seamless for its clients.
However, it is important to note that Snapshot votes facilitated by Anchorage Digital are not automatically executable, functioning more like advisory or signaling votes. Developers of the protocol can decide to execute these votes by controlling the upgradeable components through a multi-signature wallet. Truly decentralized protocols employ on-chain voting to authorize and execute changes to the blockchain code, often with a time lock delay period.
Snapshot has gained popularity in the crypto industry due to its gasless voting feature, making it more widely accessible for token holders. Anchorage Digital’s new offering reflects the growing importance of efficient and accessible governance mechanisms in the evolving crypto market. However, it remains to be seen how effectively this strategic move will address the issue of governance noise and fragmentation, and whether clients will ultimately adapt to this integrated solution.
Source: Blockworks
