August 17, 2024 5 min to read

Handshake's Future: Discussion Continues While Navigating the Future of Decentralized Naming

Balancing Vision, Funding, and Governance in the Evolution of Handshake's Protocol

Handshake’s Future: Discussion Continues While Navigating the Future of Decentralized Naming

The recent discussion within the Handshake community on Discord[1] unveiled several pressing issues and potential paths forward as the project faces critical decisions.

Main points During the Call

1. Reallocation of Unclaimed Developer Airdrop Funds:
With approximately 900 million unclaimed HNS tokens, the community is at a crossroads, debating whether to burn, reallocate, or leave the funds untouched. The consensus is clear: inaction is no longer an option.

2. Sustaining Handshake’s Development:
The ongoing lack of consistent funding for protocol-level development has raised concerns about Handshake’s future. To ensure continued progress, the community is exploring various funding mechanisms, including the small bounties, potential formation of a DAO, a multi-sig wallet, or even a foundation (whether this foundation would be similar to the dWeb Foundation [2] was not mentioned).

3. Balancing Centralization and Decentralization:
A key challenge lies in coordinating efforts without compromising Handshake’s decentralized ethos. While some centralization may be necessary for progress, there are fears of creating a central point of failure, or becoming a target for government intervention.

4. Enhancing Community Governance:
The discussion also highlighted the need for more regular and transparent community calls to discuss issues. It is important that different voices are heard, particularly regarding those opposed to the reallocation of funds.

5. Funding Protocol Development:
It is clear that the current reliance on volunteers and sporadic donations is unsustainable. For example, known protocol developer Rithvik had to seek outside employment due to a lack of funding within Handshake, hence highlighting the urgent need for a consistent resources to maintain and improve the Handshake protocol.

6. Refining Handshake’s Vision:
As Handshake evolves, there is a growing need to revisit and possibly update its original vision. What is Handshake really trying to accomplish? How would the future of the decentralize web look like? Balancing adherence to foundational principles with necessary innovation is crucial for community alignment and growth.

7. Learning from Other Blockchain Projects:
During the call, it was also mentioned the importance of considering lessons from other projects like Bitcoin and Ethereum, particularly in how they manage development funding through foundations or DAOs. These examples provide valuable insights into the potential successes and pitfalls Handshake might encounter. What can be copied from other blockchain projects that have proved to be good ideas?

8. Proposals for a DAO or Multi-Sig Fund Management:
Ideas for a community-controlled fund allocation system have also been mentioned, with discussions around possible structures and governance models. However, there are concerns about creating a centralized target for regulators.

9. Incentivizing Developers through Bounties:
Current small-scale bounty programs are seen as insufficient. There’s an ongoing push for more substantial and long-term incentive structures, with debates on retroactive funding versus upfront grants for developers.

10. The Role of Handshake-Based Businesses:
The discussion also touched on the involvement of businesses like Namebase in any possible reallocation, with concerns about whether it’s appropriate to subsidize private enterprises versus restricting the reallocation only to support protocol development. Despite these concerns, the importance of ecosystem businesses for Handshake’s adoption was acknowledged.

The Ongoing Hard Fork Discussion

Additional arguments in favor of the hard fork and reallocation:

Opportunity to implement other necessary protocol changes alongside reallocation
Potential to attract new developers and projects to the ecosystem with available funding
Ability to fund marketing and outreach efforts to increase adoption (like browser adoption)
Possibility of funding integration efforts with other protocols or services (like Cardano and Cosmos)
Clear chance to reinstate worldwide interest in Handshake since its launch

Additional arguments against the hard fork and reallocation:

Concern about setting a precedent for future changes to the token distribution
Risk of diluting the value of existing HNS holders and investors
Risk of disincentivizing current Handshake miners to continue supporting mining operations
Potential for creating conflicts of interest in fund allocation decisions
Concern that reallocation might be seen as a bailout for early investors or projects
Risk of over-complicating the project’s structure and governance

Other Considerations:

The conversation also touched on several other important points:

The need for a vesting schedule if funds are reallocated to ensure long-term alignment
The importance of clear communication with the wider Handshake community about any proposed changes (hence the proposal for more regular and transparent community calls)
The potential for reaching out to original recipients of the developer airdrop for support or involvement in Handshake
The need to balance short-term operational needs with long-term vision and sustainability
The importance of maintaining Handshake’s unique value proposition as a decentralized naming system
The challenge of balancing the interests of different stakeholder groups (developers, investors, miners, namers, etc.)
The potential for using reallocated funds to create a more robust development pipeline for the protocol

Conclusion

As the Handshake community navigates these complex issues, the path forward will require careful deliberation and a commitment to the protocol’s core principles. The coming months will be crucial in determining how Handshake evolves to meet the challenges ahead while staying true to its decentralized roots.

Action Items:

Follow up Community Call to allow community members who oppose the reallocation, or who prefer burning instead of the reallocation, to voice those concerns in more detail
Community members agreed to read in more detail current (and upcoming) reallocation proposals [3][4] before the next call