Sketch of argument for necessity of multiple governance mechanisms

  1. Reserve can be governed either by a single governance mechanism controlling all areas, or by a combination of multiple governance mechanisms controlling different areas.
  2. If there is no governance mechanism by which Reserve coinholders control some area, then Reserve is properly classified as a security.**
  3. If Reserve coinholders control all areas, then Reserve will be poorly governed.***
  4. In order for Reserve to not be properly classified as a security and not be poorly governed, Reserve coinholders must control some but not all areas. (2, 3)
  5. If Reserve coinholders control some but not all areas, then Reserve is not governed by a single governance mechanism.
  6. In order for Reserve to not be properly classified as a security and not be poorly governed, Reserve must be governed by a combination of multiple governance mechanisms controlling different areas. (1, 4, 5)

** See https://www.sec.gov/litigation/investreport/34-81207.pdf pages 12-15
*** See e.g. Moving beyond coin voting governance for a partial discussion

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