A Dual-Class Structure in a corporate or decentralized autonomous organization (DAO) governance context refers to an equity or token arrangement where different classes of shares or tokens possess unequal voting rights or economic privileges. This architecture grants disproportionate control to specific founders, early investors, or core contributors, typically through super-voting shares.
Mechanism
The mechanism operates by issuing at least two distinct classes of ownership instruments. One class, often held by insiders, carries multiple votes per unit, while another class, typically held by public investors, carries a single vote per unit or no voting rights at all. This structural differentiation is codified in the organizational bylaws or smart contract parameters, defining the distribution of decision-making power.
Methodology
The strategic intent behind a dual-class structure is to protect long-term vision and insulate management from short-term market pressures or hostile takeovers. It permits key stakeholders to maintain control over strategic direction even with reduced economic ownership. In crypto projects, this can safeguard protocol development and resist attempts to alter the foundational governance principles.
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