Why does RAILGUN have different tokens on different chains?

One question often asked in the RAILGUN community is this — why is there a new governance token for each blockchain the RAILGUN Privacy System deploys on? The short answer is that it’s necessary for security.

Having a separate governance token for each blockchain is necessary for a trustless, fully decentralized system. There has so far not been invented — for any kind of system on any blockchain — a reliable way to move a token from one chain to another without an individual or group taking temporary custody of those tokens. All “bridges” that currently exist are actually, behind the scenes, brokerages with a person (or small group) who holds the user’s token then delivers a different one in return. This is not a trustless nor a decentralized system. Similarly, while other popular cross-chain protocols may have a consolidated governance token that receives fees earned on other chains, tokens are manually transferred by a centralized team from one chain to another using a mutisig. This is a weak point that is too centralized for RAILGUN.

With the current system of a separate governance token for each chain, fees can be distributed between staked token holders trustlessly through a smart contract. This is not currently possible cross-chain.

Having separate governance tokens also means separate DAOs can evolve independently from one another. When a proposal on a chain succeeds, contract code included in that proposal and specific to that chain is executed. While other DAOs may see the benefits of these proposals and follow suit, they may also choose not to. This same governance system also means that designing proposals on one chain to be executed on another would require centralization to deploy the code cross-chain. The TX steps of successful proposals are stored on the smart contract, and the smart contract makes the function calls — so this requires on-chain tokens. In a circumstance where one chain is somehow compromised and fails, this will also not destroy the other chains.

The contributors to the RAILGUN project are aiming to build the most resilient and secure privacy protocol possible, and part of that is to be as decentralized as possible. With current technology, this necessitates different DAOs for each chain, and that in turn necessitates different governance tokens.