Glue Network
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      • Technology Selection
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      • Divorcing Security from Censorship Resistance
      • Cross-Consensus Messaging (XCM)
        • Use Case Example: Building a Multi-Layered dApp with XCM
      • Unified Token Model
      • Building a Robust Ecosystem of Service Providers
      • Strategic Enhancements to the Protocol
      • Recap of Key Innovations and Strategic Enhancements
    • 📘White Paper: Decentralized Application Stack
      • Goals of the Glue dApp Stack
      • Aggregation Strategy: The Glue Hub
      • Glue dApp Development Strategy: A Proactive and Integrated Approach
      • Initial dApps in the Glue Ecosystem
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        • Deployment Phases
      • Glue's Total Value Locked Philosophy: Prioritising Utility and Stability
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      • Distribution Mechanism for DEX and Lending Protocol Tokens
      • Recap of Key Components
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    • 📙White Paper: Governance
      • Governance and Treasury Management
      • Summary of Glue's Capital Raising Efforts
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      • Foundation Allocation
      • Genesis Token Allocations
      • Strategic Capital Allocation and Future Growth Plans
      • Avoiding Traditional Pitfalls
      • Decentralised Treasury Management
      • Future Role of the Glue Foundation
      • Addressing Potential Concerns and Educating Token Holders
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  1. White Papers
  2. White Paper: Governance

Avoiding Traditional Pitfalls

One of the core issues in the cryptocurrency sector is the excessive power and centralisation associated with the foundations of Layer 1 protocols. Typically, these foundations receive disproportionately large allocations. While such allocations facilitate significant investments, historical evidence demonstrates that this approach is ineffective.

In contrast, our allocation strategy ensures that the Glue foundation will exhaust its funds within 12-24 months.

The traditional widely adopted foundation model, presents several inherent problems:

  1. Centralised Control: Foundations often end up with excessive power and control. The decision-making process is usually opaque, with founders appointing board members who are loyal to them, ensuring perpetual control. This centralisation stifles innovation and accountability, as the founders can never be fired, no matter how incompetent or poorly they perform.

  2. Opaque Operations: The operational and decision-making processes within such foundations are often not transparent. This lack of transparency prevents the community from understanding how decisions are made and whether they align with the best interests of the network.

  3. Perpetual Control: When all funds raised in the main sale and the entire token treasury are controlled by the foundation, it essentially holds perpetual control over the network. This setup is problematic because it allows founders to remain in power indefinitely, with no mechanism for accountability or removal.

  4. Incentive Misalignment: Foundation boards are often incentivised to hoard assets rather than deploying them for network growth. They prefer to sit on the funds to ensure their salaries and positions are secure, rather than using the resources to drive development and adoption.

Overall, we believe that the traditional foundation setup is unsustainable, lacks transparency, and fails to provide accountability. Therefore, we have chosen a different path for Glue.

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Last updated 10 months ago

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