Bob is just a guy.
A guy who wants to sell burgers.
Bob has a business to run, and a lot of decisions to make.
Where is he going to buy the raw product for his meals?
- How much should he expect to pay?
- How much markup should he anticipate?
- What kind of quality can he expect from the price he's willing to pay?
- Is he more interested in increasing his reputation or profiting from business?
- Is he cultivating a theme or unique selling point?
- Which trade-offs will he prioritize?
There are hundreds of variables when running a business.
But what if bob didn't actually have to decide those things?
What if Bob created a governance structure for these business decisions?
With DPOS governance, Bob can!
DPOS can be 100% premined, airdropped on a community, or any combination of numerous distribution strategies. In Bob's case, he opts to give himself 100% and go from there.
Bob's wife, Linda, doesn't care for this strategy.
So Bob gives Linda 25% and each kid 1%, with the promise that Bob will use his majority share to sell to potential investors in this new corporate governance structure, further decentralizing the distribution.
Louise Belcher tries to sell her stake in the company but no one will buy it back from her. Nice try Louise!
Bob still owns 72% of the total stake of the company, so he can still sell 21% and maintain a 51% majority share. Teddy buys 10% for an outrageous price. Mr. Fischoeder acquires 11% through debt-slavery strong-arming.
Bob still owns 51% of his governance structure. Everything he doesn't vote on (low priority to Bob) get taken care of by the rest of the stakeholders.
This decentralized model scales much better and more predictably.
They'll be an app on every phone that allows us to post and vote on relevant topics. Every project will have its own rules.
- Which topics are valid?
- How much stake do you need to post a topic?
- How much stake do you need to vote on a certain topic?
Bob comes to realize that this governance structure is more trouble than it's worth. Bob isn't looking to expand his business, so he still has time to make all the decisions himself. DPOS makes more sense for a product/service/community looking to expand and gain network effect.
He can make all the decisions with his wife like they've always done. It was just a completely unregulated test after all. Classic pump and dump.
Everyone sells their coins to Mr. Fischoeder who is thrilled to own 100% of BurgerBob Incorporated. He doesn't have any legal contracts to enforce the governance structure on Bob's business, but it sure will be easy for him to jack up the price of coins and sell some to his gullible rich friends. All he has to do is say the word 'blockchain'.
The kids got an Xbox.