Skip to main content
SpringerLink
Log in

How Decentralized is Decentralized Governance Really? - A Network Analysis of ERC20 Platforms

  • Conference paper
  • First Online:
Book cover Information Systems (EMCIS 2021)

Part of the book series: Lecture Notes in Business Information Processing ((LNBIP,volume 437))

  • 2125 Accesses

Abstract

Blockchain technology offers a vast amount of possible applications, which include the decentralization of platforms among many others. That decentralization can enable decentralized governance of platforms, which in turn may lead to a decentralized governance structure in which the rights to make decisions about the platform are decentralized. It remains unclear how decentralized the platform governance really is solely based on its possibility and intention to decentralize. We analyze how decentralized the governance structures of in reality occurring platforms are. For this we collected data of 16 platforms which are based on the Ethereum blockchain. These platforms were analyzed in terms of token and transaction distribution as well as transaction behavior. This allowed us to examine the distribution of platform resources associated with the governance structure. As a result, we could identify that not yet decentralized governance structures becomes more decentralized. Additionally, we enhance the knowledge on the development of the decentralization of platform resources.

This is a preview of subscription content, log in via an institution to check access.

Access this chapter

Log in via an institution
Chapter
USD 29.95
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
eBook
USD 89.00
Price excludes VAT (USA)
  • Available as EPUB and PDF
  • Read on any device
  • Instant download
  • Own it forever
Softcover Book
USD 119.99
Price excludes VAT (USA)
  • Compact, lightweight edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Institutional subscriptions

References

  1. Swan, M.: Blockchain: Blueprint for a New Economy. O’Reilly Media, Inc., Sebastopol (2015)

    Google Scholar 

  2. Friedlmaier, M., Tumasjan, A., Welpe, I.M.: Disrupting industries with blockchain: the industry, venture capital funding, and regional distribution of blockchain ventures. In: Proceedings of the 52nd Annual Hawaii International Conference on System Sciences (2019)

    Google Scholar 

  3. Salviotti, G., De Rossi, L.M., Abbatemarco, N.: A structured framework to assess the business application landscape of blockchain technologies. In: Proceedings of the 51st Hawaii International Conference on System Sciences (2018)

    Google Scholar 

  4. Morabito, V.: Business Innovation Through Blockchain. The B3 Perspective. Springer International Publishing, Cham (2017)

    Google Scholar 

  5. PWC: Time For Trust: How blockchain will transform business and the economy. https://www.pwc.com/gx/en/industries/technology/publications/blockchain-report-transform-business-economy.html

  6. Fridgen, G., Radszuwill, S., Urbach, N., Utz, L.: Cross-organizational workflow management using blockchain technology-towards applicability, auditability, and automation. In: Proceedings of the 51st Hawaii International Conference on System Sciences (2018)

    Google Scholar 

  7. Beck, R., Müller-Bloch, C., King, J.L.: Governance in the blockchain economy: a framework and research agenda. JAIS 1020–1034 (2018). https://doi.org/10.17705/1jais.00518

  8. Bodó, B., Giannopoulou, A.: The logics of technology decentralization – the case of distributed ledger technologies. In: Blockchain and Web 3.0. Social, Economic, and Technological Challenges. Routledge Studies in Science, Technology and Society, pp. 114–129. Routledge, London (2020). https://doi.org/10.4324/9780429029530-8

  9. Kannengießer, N., Lins, S., Dehling, T., Sunyaev, A.: What does not fit can be made to fit! Trade-Offs in distributed ledger technology designs. In: Proceedings of the 52nd Annual Hawaii International Conference on System Sciences (2019)

    Google Scholar 

  10. Zheng, Z., Xie, S., Dai, H.-N., Chen, X., Wang, H.: Blockchain challenges and opportunities: a survey. Int. J. Web Grid Serv. 14, 352–375 (2018)

    Article  Google Scholar 

  11. Buterin, V.: A next-generation smart contract and decentralized application platform (2014)

    Google Scholar 

  12. Luu, L., Chu, D.-H., Olickel, H., Saxena, P., Hobor, A.: Making smart contracts smarter. In: Katzenbeisser, S., Weippl, E. (eds.) Proceedings of the 2016 ACM SIGSAC Conference on Computer and Communications Security. CCS 2016, 24–28 October 2016, Vienna, Austria, pp. 254–269. Association for Computing Machinery, New York, NY (2016)

    Google Scholar 

  13. Antonopoulos, A.M., Wood, G.A.: Mastering Ethereum. Building Smart Contracts and DApps. O’Reilly Media, Inc., Sebastopol (2018)

    Google Scholar 

  14. Oliveira, L., Zavolokina, L., Bauer, I., Schwabe, G.: To token or not to token: tools for understanding blockchain tokens. In: Pries-Heje, J., Ram, S., Rosemann, M. (eds.) Proceedings of the International Conference on Information Systems - Bridging the Internet of People, Data, and Things. ICIS 2018. Association for Information Systems (2018). https://doi.org/10.5167/UZH-157908

  15. Muth, R., Tschorsch, F.: Empirical analysis of on-chain voting with smart contracts. In: Bernhard, M., et al. (eds.) FC 2021. LNCS, vol. 12676, pp. 397–412. Springer, Heidelberg (2021). https://doi.org/10.1007/978-3-662-63958-0_32

    Chapter  Google Scholar 

  16. Lin, Q., Li, C., Zhao, X., Chen, X.: Measuring decentralization in bitcoin and ethereum using multiple metrics and granularities. In: 2021 IEEE 37th International Conference on Data Engineering Workshops (ICDEW), pp. 80–87. IEEE (2021). https://doi.org/10.1109/ICDEW53142.2021.00022

  17. Victor, F., Lüders, B.K.: Measuring ethereum-based erc20 token networks. In: Goldberg, I., Moore, T. (eds.) Financial Cryptography and Data Security. FC 2019. LNCS, vol. 11598, pp. 113–129. Springer, Cham (2019). https://doi.org/10.1007/978-3-030-32101-7_8

  18. Chen, W., Zhang, T., Chen, Z., Zheng, Z., Lu, Y.: Traveling the token world: A graph analysis of Ethereum ERC20 token ecosystem. In: Proceedings of The Web Conference 2020, pp. 1411–1421 (2020). https://doi.org/10.1145/3366423.3380215

  19. Ølnes, S., Ubacht, J., Janssen, M.: Blockchain in government: benefits and implications of distributed ledger technology for information sharing. Gov. Inf. Q. 34, 355–364 (2017). https://doi.org/10.1016/j.giq.2017.09.007

    Article  Google Scholar 

  20. Miscione, G., Ziolkowski, R., Zavolokina, L., Schwabe, G.: Tribal governance: the business of blockchain authentication. In: Proceedings of the 51st Hawaii International Conference on System Sciences (2018)

    Google Scholar 

  21. Ziolkowski, R., Miscione, G., Schwabe, G.: Consensus through blockchains: exploring governance across inter-organizational Settings. In: Pries-Heje, J., Ram, S., Rosemann, M. (eds.) Proceedings of the International Conference on Information Systems - Bridging the Internet of People, Data, and Things. ICIS 2018. Association for Information Systems (2018)

    Google Scholar 

  22. van Pelt, R., Jansen, S., Baars, D., Overbeek, S.: Defining blockchain governance: a framework for analysis and comparison. Inf. Syst. Manag. 38, 21–41 (2021). https://doi.org/10.1080/10580530.2020.1720046

    Article  Google Scholar 

  23. Werner, J., Frost, S., Zarnekow, R.: Towards a taxonomy for governance mechanisms of blockchain-based platforms. In: Rowe, F., et al. (eds.) 28th European Conference on Information Systems - Liberty, Equality, and Fraternity in a Digitizing World. ECIS 2020 (2020)

    Google Scholar 

  24. Werner, J., Zarnekow, R.: Governance of blockchain-based platforms. In: Gronau, N., Heine, M., Poustcchi, K., Krasnova, H. (eds.) WI2020. Band 1: Proceedings der 15. Internationalen Tagung Wirtschaftsinformatik 2020, pp. 128–141. GITO Verlag (2020). https://doi.org/10.30844/wi_2020_b1-werner

  25. Tiwana, A., Konsynski, B., Bush, A.A.: Research commentary–platform evolution. Coevolution of platform architecture, governance, and environmental dynamics. Inf. Syst. Res. 21, 675–687 (2010). https://doi.org/10.1287/isre.1100.0323

  26. MakerDAO: MakerDAO Documentation (2021). https://docs.makerdao.com/

  27. Christodoulou, P., Christodoulou, K.: A decentralized voting mechanism: engaging ERC-20 token holders in decision-making. In: 2020 Seventh International Conference on Software Defined Systems (SDS), pp. 160–164. IEEE (2020). https://doi.org/10.1109/SDS49854.2020.9143877

  28. Hsieh, Y.-Y., Vergne, J.-P.J.P., Wang, S.: The internal and external governance of blockchain-basedorganizations: evidence from cryptocurrencies. In: Campbell-Verduyn, M. (ed.) Bitcoin and beyond. Cryptocurrencies, blockchains, and global governance. RIPE series in global political economy, pp. 48–68. Routledge, London, New York (2018)

    Google Scholar 

  29. GitHub: ethereum-etl (2021). https://github.com/blockchain-etl/ethereum-etl

  30. Medvedev, E., Day, A.: Ethereum in BigQuery: how we built this dataset (2018). https://cloud.google.com/blog/products/data-analytics/ethereum-bigquery-how-we-built-dataset

  31. GitHub: ethereum-etl-airflow (2021). https://github.com/blockchain-etl/ethereum-etl-airflow

  32. Etherscan: Ethereum (ETH) Blockchain Explorer (2021). https://etherscan.io/

  33. Bloxy: Bloxy (2021). https://bloxy.info/

  34. Newman, M.E.J.: Networks. An introduction. Oxford University Press, Oxford (2010)

    Book  Google Scholar 

  35. Newman, M.E.J.: Assortative mixing in networks. Phys. Rev. Lett. 89, 208701 (2002).https://doi.org/10.1103/PhysRevLett.89.208701

  36. Srinivasan, B.S.: Quantifying Decentralization (2017). https://news.earn.com/quantifying-decentralization-e39db233c28e

  37. Fahrmeir, L., Heumann, C., Künstler, R., Pigeot, I., Tutz, G.: Statistik. Der Weg zur Datenanalyse. Springer Spektrum, Berlin, Heidelberg (2016)

    Google Scholar 

  38. Mittag, H.-J., Schüller, K.: Statsunistik. Eine Einführung mit interaktiven Elementen. Springer, Berlin, Heidelberg (2020). ; Imprint: Springer Spektrum, Berlin, Heidelberg

    Google Scholar 

  39. Bai, Q., Zhang, C., Xu, Y., Chen, X., Wang, X.: Evolution of Ethereum: A Temporal Graph Perspective (2020)

    Google Scholar 

  40. Albert, R., Barabási, A.-L.: Statistical mechanics of complex networks. Rev. Mod. Phys. 74, 47–97 (2002). https://doi.org/10.1103/RevModPhys.74.47

    Article  MathSciNet  MATH  Google Scholar 

  41. Hertzog, E., Benartzi, G., Benartzi, G.: Bancor protocol. Continuous liquidity for cryptographic tokens through their smart contracts (2018). https://website-bancor.storage.googleapis.com/2018/04/01ba8253-bancor_protocol_whitepaper_en.pdf

  42. Liang, J., Li, L., Zeng, D.: Evolutionary dynamics of cryptocurrency transaction networks: an empirical study. PLoS ONE 13, e0202202 (2018). https://doi.org/10.1371/journal.pone.0202202

Download references

Author information

Authors and Affiliations

  1. Technische Universität Berlin, Berlin, Germany

    Johannes Werner, Niclas Freudiger & Rüdiger Zarnekow

Authors
  1. Johannes Werner
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Niclas Freudiger
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. Rüdiger Zarnekow
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Johannes Werner .

Editor information

Editors and Affiliations

  1. University of Nicosia, Nicosia, Cyprus

    Marinos Themistocleous

  2. British University in Dubai, Dubai, United Arab Emirates

    Maria Papadaki

Rights and permissions

Reprints and permissions

Copyright information

© 2022 Springer Nature Switzerland AG

About this paper

Check for updates. Verify currency and authenticity via CrossMark

Cite this paper

Werner, J., Freudiger, N., Zarnekow, R. (2022). How Decentralized is Decentralized Governance Really? - A Network Analysis of ERC20 Platforms. In: Themistocleous, M., Papadaki, M. (eds) Information Systems. EMCIS 2021. Lecture Notes in Business Information Processing, vol 437. Springer, Cham. https://doi.org/10.1007/978-3-030-95947-0_12

Download citation

  • DOI: https://doi.org/10.1007/978-3-030-95947-0_12

  • Published:

  • Publisher Name: Springer, Cham

  • Print ISBN: 978-3-030-95946-3

  • Online ISBN: 978-3-030-95947-0

  • eBook Packages: Computer ScienceComputer Science (R0)

Publish with us

Policies and ethics

Search

Navigation