Meta-governance will enable INDEX token holders to vote on Index Cooperative’s snapshot page on how the Cooperative should vote in terms of the upcoming Aave Improvement Proposals that we previously covered here. The voting period for meta-governance voters will end 24 hours prior to the underlying governance vote, Index Cooperative will only execute a vote if 5% quorum is reached.
This is an extremely interesting development as crypto index holders now have an avenue to participate in the governance of projects that they have invested in by way of something like Index Cooperative’s DeFi Pulse Index.
Aave is just one of 11 tokens that currently make up the DeFi Pulse Index. Other notable names include YFI, UNI, SNX, MKR. COMP, BAL, and more. If this first meta-governance experiment is successful, we can expect to see the same process repeat for governance proposals that come up in any of the previously mentioned projects. The meta-governance development at Index Cooperative is especially interesting to observe if we attempt to draw linkage to traditional finance, where the largest index funds largely own all of corporate America.
Will crypto index funds eventually become the largest holders of protocol tokens and thereby the largest influencers of any major governance changes? What does that mean for tokens like INDEX? The answer is unclear but meta-governance from Index Cooperative is absolutely a new development that DeFi users should be aware of.