A next generation of tokens is currently under development: security tokens. A new ecosystem is emerging fast and expectations are high. Security tokens are financial securities compliant with SEC regulations which means checkpoints as know-your-customer(KYC) and anti-money-laundering(AML) are applicable. Some experts believe that security token governance is a matter of bringing the results of existing regulatory and compliance mechanism on-chain.This means that the actual compliance validation happens off-chain and decisions are issued by single entities.
However security tokens require more than simple compliance and validation. Consider all the sophisticated dividend distribution dynamics, voting and coordinations models that should be incorporated as well. Coordinating these dynamics off-chain is hard and will cause scalability issues. Certain mechanisms in security token transfers are relatively easy designed into smart contracts. Nonetheless many hurdles still need to be taken. Today programmable, on-chain governance only takes place on a token level but there are many scenarios imaginable in which this model is insufficient. The on-chain governance should enforce mechanics at different levels on the network.
The current infrastructure is still in its nascent state. Security token governance will most likely evolve as a hybrid combination of off-chain and on-chain models.
Reference material:
https://hackernoon.com/security-tokens-2-0-about-on-chain-governance-part-ii-ca9378cea172
Posted from my blog with SteemPress : https://www.blockchaingovernance.nl/2018/11/07/off-chain-vs-on-chain-governance/