The misaligned incentives of protocol developers

Too Long; Didn't Read

Today’s most popular protocols like ethereum and bitcoin are running into serious bottlenecks, the most serious of all being scalability. Transactions fees are at all time highs, with bitcoin averaging around <a href="https://bitinfocharts.com/comparison/bitcoin-transactionfees.html" target="_blank">$30</a> per transaction and ethereum averaging <a href="https://bitinfocharts.com/comparison/ethereum-transactionfees.html" target="_blank">$3</a>. To develop protocols that scale is a serious goal for the industry, and the protocol that nails it first will most likely gain serious advantages in terms of user base. Once this happens, consolidation will start. Businesses will start implementing <a href="https://hackernoon.com/tagged/blockchain" target="_blank">blockchain</a> into their business models, and network effects will start to develop. Once these successful blockchains have developed their moats, there will be a serious incentive problem that we will all have to reckon with; why would developers (or more specifically, early token holders with governance klout) continue to improve scalability?