On the surface, Dusk holders have voting rights and can participate in protocol upgrades. But the reality is much more complex.

On-chain governance data illustrates the problem — only 3 proposals were initiated throughout 2025, with an average participation rate of less than 8%. Many people think this is because the community is not interested, but the real reason is different: all proposals must undergo a MiCA compliance review by the foundation’s legal team before being put on-chain.

This review mechanism restricts the community’s actions. Want to push for "permissionless contract deployment"? Not possible. Want to remove validator KYC requirements? Even less possible. The proposals that can be voted on are limited to technical adjustments — tweaking Gas parameters, optimizing ZK proof efficiency, and similar things. Truly systemic reforms have long been blocked by legal logic.

But from another perspective, this design also makes sense. For projects targeting licensed institutions, institutional stability is far more important than the ideal of decentralization. Radical community proposals can drive innovation, but they also risk crossing regulatory red lines. For a platform that needs compliant operation, the cost is too high.

Therefore, Dusk’s governance is not a failure but a sober trade-off — sacrificing some governance flexibility to enhance institutional credibility. This is a smart choice in traditional financial scenarios. In the context of Web3’s idealism, it may seem somewhat conservative. But sometimes, being conservative is the most responsible approach.