Kyber Network will soon launch a new upgrade that will add staking rewards and decentralized governance features to the protocol. This upgrade overall is expected to benefit the platform. When token holders vote on proposals, they will be staking their KNC tokens and this will allow them to earn rewards. There is no limited amount for staking.

From what I have heard, the staking period will be two weeks or 15 days. It could be something else. The main benefit of this system is quite clear: it will increase community participation, increase community feedback and interactions.

But it will also politicize the community. There will be a system of delegates which will allow many users to delegate an expert like how congressman are elected in US elections. It will likely work similar to EOS (EOS block producers are delegates). Hence, it may face issues similar to EOS.

If the delegates decide to misuse their power of votes to promote proposals that go against the general interest of the Kyber community, then that wouldn't be something we want. Of course, the token holders can just withdraw their delegates if they see that a delegate is doing something wrong.

But what if this decision is a major wallet update? Something relating to millions of dollars worth of tokens? Everyone knows that there are a lot of corrupt politicians. So, delegates turning corrupt isn't unfeasible. In my opinion, this is almost certainly going to happen.

In order to fight back against something like that, the community would have to figure out mitigation systems. For example, a system that allows the supporters of a delegate to withdraw their votes during the staking period. For example, if a delegate voted against the community interest but his supporters upon realizing this decides to withdraw their delegation then, that would help deter corruption.

One other issue the DAO will face is polls with close margins. For example, if a proposal passed with 52% of votes, it will have 48% opposing it. This could create two dominant groups in the DAO like how modern democracies work. Both sides will work on undermining each other whenever they fight over decisions that they disagree on. I don't see it as something wrong though.

Also, there is the issue of vote buying. How will the community react to vote buyers? I think more discussion needs to be held about these issues. When the katalyst upgrade is live on ethereum mainnet, we will know a lot more about these issues as they start emerging. Let's hope for the best.