- The use of blockchain technology enables successful decentralized governance in implementing SDGs.
- The Decentralized Consortium Funding (DCF) model will help in addressing key issues of engagement, execution, and governance.
Government institutions across the globe have been working on 17 major sustainable developments goals set out by the United Nations. However, there have been major roadblocks in the path to progress identified by the stakeholders.
One of the common observations is that these goals can conflict with each other. The World Economic Forum (WEF) has identified that to deal with such conflicting goals, governance can play a major role. And to address this matter of governance effectively, WEF is looking to tap into decentralized blockchain technology.
The sustainable developments goals (SDGs) involve parties from different spheres of governance. They include aid agencies, governments, local authorities, local people, and NGOs. The use of blockchain technology will allow users to address these issues in a decentralized manner and on a global scale.
To bring a decentralized governance model, blockchain technology will enable a common view of information based on a pre-defined set of values. Thus, depending on those values, it can facilitate self-executing activities.
Besides, the use of blockchain technology will cater to three key requirements in attaining SDGs. This includes “transparency, accountability, and ownership”. Moreover, to maintain accountability, blockchain technology helps in building a process of execution with strong governance.
The Blockchain-based Decentralized Consortium Funding (DCF) mode
To build a robust system of decentralized governance some key players in the blockchain space like Input Output, Boston Consulting Group, University of Wyoming, the Blockchain Research Institute, and other players have joined hands in building the Decentralized Consortium Funding (DCF) model.
The DCF model focuses specifically on engagement, execution, and governance. The goal of this model is to ensure the effective use of funding while assuring that the strategic objectives are achieved in the given timeline. WEF notes that this model is applicable to any process involving funds and resource allocation. The official announcement notes:
DCF is a programme-execution machine – both technology and processes, with built-in governance components. It is intended to limit power concentration by design through the use of inherent blockchain capabilities.
The DCF model will also incentivize the collaboration of participants through ‘proof-of-merit’. The DCF model relies majorly on two main mechanisms: governance over the funding raised, and the execution and operating model.
The first one focuses on holding the consortium accountable for the execution of projects while simultaneously protecting stakeholder value. To maintain decentralized governance it facilitates blockchain-enabled decision making.
However, to ensure successful execution, effective governance requires an operating model. The DCF model involves a key concept called ‘work package’. WEF explains:
This is a unit of work involving the completion of specific objectives within a larger set of goals that DCF sets out to achieve in a decentralized, but ‘directed’ fashion. Work packages are defined before the consortium begins its work, and are reviewed during the project.
Thus, the use of blockchain solves the issue of accountable governance for the successful implementation of SDGs.