Recently Vitalik posted a great article how decentralized projects should move with the governance voting.
— DeGov article —
It summarises the challenges of current voting systems (that could be attacked by a hacker, for example)
Imo it is a great read and give some ideas to think about
- should governance/voting system encourage voters/participation?
- how to ensure that voting is done for the long term development/success of the protocol?
- how to make sure that it is difficult to attack/manipulate mechanics
A lot of projects are still develop their systems, but it takes me days and days to dive and understand all of different protocols, perhaps easiness of the system is also a great value for the protocol.
The idea of dropium, for example, is very simple but powerful and it is already used by other projects.
There is a lot of game theory that was not utilised last 50 years because there were no “trust agent”. Blockchain is a trust agent, everything works as it programmed, so I see a lot of ponential here I believe.
Any thoughts are appreciated.
Might be useful related to this topic
Functional NFTs have great potential
I see there is only needed to connect the module to shapshot and NFTs will be minted automatically two voters?
In this case it is great potential to track voting participation and prove your reputation/participation later at any time. Those NFTs can be used for example in the automated smart contract to give some features, functions etc.
After reading Vitalik’s article I personally think there are two things important: participation and reputation of voting (to measure quantity and quality). The most difficult is to measure quality, as there is no strict mathematical definition of what is the quality.
May be interesting to look at voting discretion or personal voting vs consensus voting? It is not ideal measures however.
I’m not very knowledgeable on the subject, anyhow Vitalik’s article was insightful as usual, but I found that the lack of rigorous assumptions makes reaching a conclusion on the topic rather daunting, if not impossible. What are the metrics that define a good governance model? - i.e: is it a governance model that favors an equitable decision-making - hence it favors small holders - at the expense of efficiency and potentially the competitiveness of a project, is it a governance that favors short term token appreciation potentially at the expense of the long-term success of the project or vice versa etc… Or even worse, how do you rank them? I suppose that there’s no universal answer and it boils down on the assumptions upon which a model is built. For instance, I understand the concerns about whales’ voting oligopolies, but it’s not clear whether a more democratic approach is always necessarily better - there’s a wealth of literature like, if i recall correctly, the arrow’s impossibility theorem. Ideally you’d want the most knowledgeable actors to hold the most voting power - so an interesting metric to look at would be the relation between token ownership and ‘information’
Anyway one thing I agree with is this quote:
A token in a protocol with coin voting is a bundle of two rights that are combined into a single asset: (i) some kind of economic interest in the protocol’s revenue and (ii) the right to participate in governance. This combination is deliberate: the goal is to align power and responsibility. But in fact, these two rights are very easy to unbundle from each other.
It’s impossible to decouple the governance from the financial interests of the holders. Which might or might not work out depending on the appetite of the governance participants - i.e: short term speculators or long-term investors.
However an interesting consequence of the above is that it’s not a very scalable system imho, meaning that you cannot trust the governance system/community to make decisions that benefit the entire ecosystem due to conflict of interests - trusting the governance participants of a project to make a fair decision that would affect a competitor is a bit like trusting tobacco companies to make fair laws about public health…
Absolutely valid questions and concerns, imo
I would start narrowing the problem down into most important steps:
How to achieve high participation? (people are lazy to vote, unless there is something really important ), perhaps there should be some kind of motivation with some kind of rewards?
How to make this motivation long term oriented? For example reward voters with kind of long term call options on the governance token. However the market price does not tell anything, so better to use KPI-based options. So voters get a reward (more governance tokens or something else) in case some metrics are achieved in some time.
Example: Somebody starting a voting that is aimed to increase TVL of the whole protocol. Makes sense to reward voters only in case TVL is increased. In this case their interests are aligned.
It is difficult to distinguish (seems to be already shown by many protocols and experiments) what is the real motivation of the participant: financial/speculative or governance/building. But some experiments like dropium may show success where long term players are automatically rewarded on expense of short term players.
So may start to solve most important problems here, for instance keep voting participation rate high
Great idea. How would you implement? everyone who votes gets tokens?
hmm… I see here two issues:
1: Dont you think its redundant ?
I mean - if someone voted, we already can track it through blockchain, isnt it ? So why we need extra badge for [each voting] ?
BUT! - as we already discussed related ideas here - we can reward voters for remarkable actions like those who vote for 10+ proposals 100+ proposals etc… in this case I see reason for POAP (which is the “medals” we talked in the mentioned thread)
2: transfering rights.
Users can transfer these POAP tokens so, in fact someone could get the rewards which just by spending few bucks on the market or even for free as a gift.
May be this is not a big deal… but we have to keep in mind it while thinking about this mechanic.
Well, if the voting was on the “optimistic” layer it is not trackable in the blockchain, only result is there and a proof.
On the Snapshot plugin there is a minting of NFTs for off-chain participants, as long as I understand.
Thats indeed a handy instrument for community building.
On my opinion, functional NFTs are going to be next discovery for the industry.
Look, Bitcoin is like an art NFT (no su much functionality, but everybody believes in it), Ethereum is like a functional next version of it. So I believe the same way functional NFT will come after art NFT as functional Ethereum was coming after Bitcoin.
o wow, thats an interesting nuance about “Optimistic” voting… indeed.
And yes, 100% agree on functional part for NFT… nice association with BTC–> ETH )))