Original Author: MIDDLE.X @ PAKA Labs
Original source: PAKA Labs
In most DAOs, Token carries the functions similar to stocks for joint-stock companies, including carrying ownership, governance decision-making rights, income rights and so on. For a long time, the main form of voting rights in DAO has been the simplest form of one token, one vote (1T1V). However, this arrangement has many disadvantages. Users with a relatively small proportion of currency take a "rational indifference" attitude towards participating in governance, just like a saying: "If you say it, don't say it"; this further leads to the centralization of voting rights in DAO , and turn to serve the interests of a few people; even for a DAO organization with a sufficiently decentralized currency holding structure and a good participation culture, if it lacks a benign voting decision-making mechanism, it will lead to the short-sightedness and stupidity of the "crowd".
The crypto industry rewards those who make even minor innovations generously. With DAO as the carrier, people began to explore various governance coordination mechanisms.Due to the programmability of blockchain and Token, DAO has contributed a lot of solutions to governance issues in just a few years since its birth, and the low trial and error costs of DAO organizations also provide a stage for experimenting with different governance mechanisms.
DAO is a fascinating organizational form, it is realizingCommon ownership of public goods, elimination of corruption risks in the public sector, and achievement of non-profit organizational goalshas incomparable advantages. However, these advantages must be realized with a benign voting decision-making mechanism, a fair contribution measurement and reward mechanism, and strong governance scalability. This article will introduce several typical and interesting voting decision-making mechanisms that we think. Although these voting mechanisms are not a silver bullet to solve all problems, their governance ideas have extraordinary positive significance.
1. Vote delegation/Liquid democracy
Every decision needs to take up our thinking bandwidth, which is one of the reasons why we choose "rational indifference" to public issues in reality, but we have a better choice, which is to entrust decision-making to experts, which is better than taking on these issues ourselves The cost is lower. In addition, in public governance, entrusting power to a few people can effectively improve efficiency. But authorization is not omnipotent, and experts are not necessarily completely reliable. Therefore, in the principal-agent relationship, supervision is indispensable.
Power needs to be concentrated, but more importantly, it needs to flow.Fluid democracy is similar to representative system as a whole, but has a stronger “fluid” attribute than representative system as a whole. Users with voting rights can choose to entrust their voting rights to people they trust and consider professional, but they can withdraw their entrustment at any time and exercise their voting rights in person, or transfer the entrustment to others. In addition, delegation is multi-level, and the votes you delegate may be delegated to others again.
The liquid democracy mechanism was first adopted in Aragon. In this way, the participation rate of token holders can be increased, thereby improving the legitimacy of voting decisions. Although there are still problems such as bribery and collusion in liquid democracy. But through a more responsive and multi-layered delegation mechanism, liquid democracy increases everyone's right to choose, and also significantly increases the role of the trustor in supervising the trustee.
2. Quadrac Voting
This is a voting mechanism between 1T1V and 1P1V (one person, one vote) proposed by Vitalik Buterlin. The key role of this voting mechanism is to allow a single voting subject to vote repeatedly for the same option to express the intensity of their will , at the same time, in order to avoid monopolizing the voice of giant whales, the marginal cost of repeated voting for the same option shows a decreasing trend, which means that the cost of the n+1th vote is higher than that of the nth vote. For example, it takes 1 Token to vote for the same option, 4 Tokens to vote for 2 votes for it, 9 Tokens to vote for 3 votes for it, and so on, and 100 Tokens to vote for 10 votes for it. a Token.As the number of repeated votes for an option increases, the utility of the vote is only the square root of the number of tokens cast.
Quadratic voting can be used for rights holders to vote on the allocation of public resources. A typical application case is Gitcoin. Gitcoin is a Grant DAO that uses a quadratic voting mechanism to decide which projects will be funded with funds from the Ethereum Foundation. Before Gitcoin, which projects the Ethereum Foundation sponsored was determined by a centralized committee. Gitcoin provides a channel for community users to express their opinions. Community users can vote in the form of "donations" to the projects they support. The sum of the square root of each donation a project receives ultimately determines the amount of sponsorship it can get.
In actual operation, Gitcoin has efficiently provided funds for many high-quality Ethereum projects. The quadratic voting mechanism allows projects that are supported by more people to stand out. Gitcoin’s quadratic voting mechanism eliminates the evaluation process of the centralized committee, making the allocation of funds more efficient, while creating an open culture of community participation .
1. Vote delegation/Liquid democracy
Gitcoin's authentication interface
3. Holographic Consensus
Holographic consensus is a solution provided by DAOstack to increase governance scalability. Governance scalability can be understood as the adaptability of a certain governance mechanism to the expansion of DAO scale. We know that as the scale of DAO expands, the cost of coordination increases sharply. It is obviously unrealistic for everyone to vote for every proposal, and the attention of participants will inevitably become the most scarce resource.
DAOstack believes that in order for the governance system to be efficient, there must be mechanisms to manage collective attention, a mechanism to ensure that the most important proposals get attention and that small groups that get voted tend to act in the interests of the majority. The term "holographic" originally refers to a technical means to record all information of three-dimensional objects on a two-dimensional plane, and the goal of holographic consensus is to allow small groups to accurately express the will of the public. This is achieved through the Attention Token - GEN.
GEN is the token for the monetization of attention in the DAOstack ecosystem. With GEN, you cannot vote, but you can bet on any proposal. If the proposal you bet on is passed, you will get more GEN. If the proposal you bet on is not passed, you will lose GEN. This way of betting is equivalent to establishing a prediction market parallel to the voting mechanism.
The governance process of holographic consensus can be divided into four steps:
Power needs to be concentrated, but more importantly, it needs to flow.Any user who meets the reputation threshold can initiate a proposal;
The liquid democracy mechanism was first adopted in Aragon. In this way, the participation rate of token holders can be increased, thereby improving the legitimacy of voting decisions. Although there are still problems such as bribery and collusion in liquid democracy. But through a more responsive and multi-layered delegation mechanism, liquid democracy increases everyone's right to choose, and also significantly increases the role of the trustor in supervising the trustee.GEN holders choose proposals that they think have a high probability of passing to bet. Proposals that do not receive enough GEN bets will be ignored and will not enter the next stage;
This is a voting mechanism between 1T1V and 1P1V (one person, one vote) proposed by Vitalik Buterlin. The key role of this voting mechanism is to allow a single voting subject to vote repeatedly for the same option to express the intensity of their will , at the same time, in order to avoid monopolizing the voice of giant whales, the marginal cost of repeated voting for the same option shows a decreasing trend, which means that the cost of the n+1th vote is higher than that of the nth vote. For example, it takes 1 Token to vote for the same option, 4 Tokens to vote for 2 votes for it, 9 Tokens to vote for 3 votes for it, and so on, and 100 Tokens to vote for 10 votes for it. a Token.Groups with voting rights vote on the proposal. If the proposal is passed, the betting users can get GEN rewards, otherwise they will lose GEN;
, a mechanism to ensure that the most important proposals get attention and that small groups that get voted tend to act in the interests of the majority. The term "holographic" originally refers to a technical means to record all information of three-dimensional objects on a two-dimensional plane, and the goal of holographic consensus is to allow small groups to accurately express the will of the public. This is achieved through the Attention Token - GEN.Proposals that have been passed officially take effect and are executed on the chain.
The above is the holographic consensus governance voting framework provided by DAOstack. This framework has strong governance scalability and provides an available governance solution for large-scale DAOs.
Questions about the framework mainly focus on two points: First, does the framework really screen out the most noteworthy proposals, or does it just screen out popular proposals with a spreading effect? Second, the bettors’ judgment is based on whether a certain proposal will be passed, rather than that a certain proposal should be passed. Bettors who are eligible to vote will inevitably participate in voting. Will they eventually distort the voting results?
These disadvantages need to be tested and corrected in actual operation. Regardless, DAOstack has provided a useful practice combining prediction markets and DAO governance. By using the framework of DAOstack, DXdao, NecDAO and Prime DAO are already practicing the holographic consensus mechanism.
4. Conviction Voting
Conviction voting is a dynamic voting mechanism proposed by Aragon based on voters' beliefs. When a user chooses to vote for a proposal, its voting utility increases over time. This increasing process is not at a constant speed, but decelerating, and will eventually reach a maximum value without increasing. Users can withdraw or transfer their votes to other proposals at any time, but their voting utility on the previous proposal will not disappear immediately, but will gradually decrease. This reduction process is not uniform, but accelerated. In order to make the expression more vivid, Aragon created the concept of "belief", which is used to refer to the utility of voting.
Conviction voting is a novel decision-making process that is now being used by the 1HIVE community for community decision-making on funding allocations. Conviction voting has the following characteristics:
A user can distribute his votes among several ongoing proposals at any time, with no definite deadline;
GEN is the token for the monetization of attention in the DAOstack ecosystem. With GEN, you cannot vote, but you can bet on any proposal. If the proposal you bet on is passed, you will get more GEN. If the proposal you bet on is not passed, you will lose GEN. This way of betting is equivalent to establishing a prediction market parallel to the voting mechanism.
Proposal enhancements:
Each proposal will have a threshold according to the amount of funds it applies for. Once the "belief" gathered by the proposal reaches the threshold, the proposal will be passed and the funds will be allocated.
Conviction voting fundamentally changes the form of voting, community users will not be required to vote within a time limit, nor will they be asked to vote for proposals they do not understand.Users can fully express their preferences, instead of always "making decisions", they can vote for proposals that they understand and are interested in. Conviction voting does not require users to reach a majority consensus on the same issue, but instead gives full play to the diversity of user will and allows multiple paths to run in parallel.
Questions about the framework mainly focus on two points: First, does the framework really screen out the most noteworthy proposals, or does it just screen out popular proposals with a spreading effect? Second, the bettors’ judgment is based on whether a certain proposal will be passed, rather than that a certain proposal should be passed. Bettors who are eligible to vote will inevitably participate in voting. Will they eventually distort the voting results?
5. Rage Quitting
We believe that a better translation is "If you don't like it, you will leave". This mechanism originated from Moloch and is now widely used in many DAO platforms or DAO organizations that adopt the Moloch framework, including DAOhaus.
Theoretically speaking, organizations that rely on majority voting to determine the disposal of funds are at risk. For example, owners with 70% of voting rights vote to pass a proposal and embezzle the funds of other 30% of voting rights owners. Although such an extreme situation has not yet appeared, it is not uncommon for large shareholders to use their decision-making power and information advantages to reap the interests of small shareholders in joint-stock companies. For investment DAO (Venture DAO), it is very necessary to prevent small groups with decision-making power from harming the interests of other owners, and the anger exit mechanism can effectively achieve this.
For the DAO of the Moloch framework, any member can withdraw from the DAO organization at any time, destroy their own Share or Loot (Share is a voting share, Loot is a non-voting share), and get back the corresponding share of funds in the DAO . Angry retreat refers to the withdrawal behavior in the governance voting process.
Taking DAOhaus as an example, the governance process is divided into the following steps:
first level titleAnyone (not limited to DAO organization members) can submit proposals;
Conviction voting is a dynamic voting mechanism proposed by Aragon based on voters' beliefs. When a user chooses to vote for a proposal, its voting utility increases over time. This increasing process is not at a constant speed, but decelerating, and will eventually reach a maximum value without increasing. Users can withdraw or transfer their votes to other proposals at any time, but their voting utility on the previous proposal will not disappear immediately, but will gradually decrease. This reduction process is not uniform, but accelerated. In order to make the expression more vivid, Aragon created the concept of "belief", which is used to refer to the utility of voting.Proposals must receive sufficient sponsorship to proceed to the voting stage. The meaning of sponsorship is that people who hold Shares vote to support this proposal. At this stage, meaningless or unimportant proposals can be filtered out;
Users can withdraw their votes at any time, and their voting utility will not be removed immediately, but will gradually weaken over time;After the sponsorship received by the proposal exceeds the threshold, it enters the queue and waits for voting. Through the queuing mechanism, ensure that the proposals are collected in the voting pool in an orderly manner;
vote:Before the voting deadline, the proposal must obtain enough yes votes to pass;
Taking DAOhaus as an example, the governance process is divided into the following steps:After the voting is passed, there is a 7-day grace period (Grace Period) before the voting results are implemented. During this period, shareholders who are not satisfied with the voting results can withdraw angrily;
implement:Proposals are marked complete and executed on-chain.
We found that under the anger retreat mechanism,No member can control other members' funds, it is theoretically impossible to harm the interests of any member through governance voting. In fact, the angry exit mechanism can not only protect the interests of members, but also improve the ideological unity of the organization and improve the efficiency of organizational coordination.
6. Weighted Voting & Reputation-based Voting
Governance tokens often have to undertake dual functions. On the one hand, they must undertake the governance function, and on the other hand, they must undertake the value circulation function.Submit a proposal:Sponsorship Proposal:
Attackers can borrow from the lending market, or rent entrustment from the possible entrustment bribery market, so as to obtain a large number of voting rights in a short period of time and launch a governance attack on DAO.
queue:
In order to avoid such problems, weighted voting is a good way. Some DAO organizations link the voting utility with the holding time (coin age). The longer the holding time, the greater the voting power. Lock-up time hook, such as Polkadot: users can choose not to lock-up, but the voting utility is very small. Choosing a longer lock-up time can improve the voting utility.
Weighted voting can increase the financial cost of a governance attack, making the attack less economically credible. A more thorough solution is toComplete decoupling of financial value tokens and governance power tokens, the latter we can call "reputation".
Reputation is a non-transferable and non-negotiable credit. Reputation may be obtained by holding or locking tokens, but it is reputation, not tokens, that has voting rights. Reputation can also be earned by contributing to an organization. It should be noted that the reputation holder does not have absolute ownership of the reputation, and the reputation you have acquired can be destroyed through code rules or governance voting. For example, when a reputation holder does something that harms the interests of the organization, its reputation may be deducted; for another example, in order to prevent the reputation obtained earlier from continuing to exert influence and damage fairness, the reputation can be gradually deducted over time. deduction, or become invalid due to expiration.
Although reputation cannot completely resist malicious bribery (for example, you can still sell your private key to transfer reputation indirectly), it is undoubtedly extremely difficult to form an efficient reputation buying and selling market, or to make it financial.
Starting with DAOstack, other governance frameworks have also successively supported the reputation voting scheme. Reputation voting gives DAO organizations the ability to adjust voting weights based on their community ecological distribution and token distribution, and also avoids governance attacks and fairness issues caused by token-based voting. By customizing the calculation rules and obtaining methods of reputation value, DAO organizations can practice the "democracy" they understand and recognize.
7. Knowledge-extractable Voting (KEV)
We need to first understand a concept called "Furtachy", because its idea of "betting on belief" has had a profound impact on the DAO governance voting mechanism. Futarchy is a governance theory proposed by Robin Hanson in 2000, which is a model that combines governance voting with prediction markets. Its core idea is to endow the voting behavior with the nature of betting, thereby rewarding those who voted for the correct option and punishing those who voted for the wrong option. The holographic consensus mentioned above can be understood as a variant of Furtachy.
This section introduces another variant of Furtachy: Knowledge-extractable Voting (the translation is a literal translation of Knowledge-extractable Voting, which has not yet reached an industry consensus), or KEV for short.
The core of KEV is to allow knowledgeable experts to have more voting rights.The idea of KEV originates from the reflection on populism in real politics. In the Brexit referendum, there were actually quite a few "sighted people" who had a deep understanding of international politics and trade. They generally did not support Brexit, but they did not have more voting rights. Like the public, they only had One vote with equal weight. In order to improve this situation, the KEV mechanism introduces a new type of knowledge token, which is similar in nature to reputation, non-tradable, and can be issued and confiscated according to established rules. However, the pass is not directly used for voting, but plays a role by influencing the voting weight.
In the KEV mechanism, proposals will be divided into different topics, and different topics will correspond to different knowledge certificates. Having a certain type of knowledge certificate can have greater voting rights in proposals of this type of topic.If Alice has a lot of knowledge certificates on tax law topics, when Alice votes on tax law proposals, her votes will have greater weight.
If Alice's vote conforms to the final voting result, Alice will be rewarded with more knowledge tokens of the corresponding topic. Conversely, if Alice's vote is inconsistent with the final voting result, her knowledge token will be deducted.The KEV mechanism encourages people who have more professional knowledge on a proposal to vote, and also encourages people who do not have enough information and knowledge on a proposal not to vote.
image descriptionGovernance voting interface for Kusama parachain BifrostWeighted voting can increase the financial cost of a governance attack, making the attack less economically credible. A more thorough solution is to
Although reputation cannot completely resist malicious bribery (for example, you can still sell your private key to transfer reputation indirectly), it is undoubtedly extremely difficult to form an efficient reputation buying and selling market, or to make it financial.
summary
What is a good governance voting mechanism? For private companies, efficiency may be the first priority, and corporate leaders with absolute power and strict bureaucracy are standard configurations. However, for DAO organizations, although they also need community leaders with appealing power and efficient execution, but Before that, I think "democracy" should be considered first.
Starting with DAOstack, other governance frameworks have also successively supported the reputation voting scheme. Reputation voting gives DAO organizations the ability to adjust voting weights based on their community ecological distribution and token distribution, and also avoids governance attacks and fairness issues caused by token-based voting. By customizing the calculation rules and obtaining methods of reputation value, DAO organizations can practice the "democracy" they understand and recognize.If Alice's vote conforms to the final voting result, Alice will be rewarded with more knowledge tokens of the corresponding topic. Conversely, if Alice's vote is inconsistent with the final voting result, her knowledge token will be deducted.Let's first define democracy in the context of DAO: extensive and fair participation in decision-making by many stakeholders. A broad and fair decision-making mechanism can help DAO organizations achieve the following two goals:
1. Mobilize more wisdom and resources
A group can be expressed as "group unconsciousness" or "group wisdom", depending on whether there is a good coordination mechanism.A DAO organization with a benign mechanism and proper operation can allow many owners to choose to create value instead of "free riding", so as to effectively explore the wisdom and resources of the group and serve the goals of the organization. For traditional centralized organizations, I am afraid that it will take a lot of money to achieve this.
2. Develop towards "goodness" and survive for a long time
Since the birth of private ownership, it has provided a huge driving force for the development of human civilization, but with the development of productivity, many organizations that provide public goods have emerged. Whether it is public utilities such as hospitals and schools, or Internet services such as Uber and Facebook, they all have a significant public goods nature. but,When private companies operate public services, they will one-sidedly pursue the interests of shareholders and harm other wider stakeholders, such as excessive fees charged by private hospitals, and big data acquisition by Internet companies.The KEV mechanism encourages people who have more professional knowledge on a proposal to vote, and also encourages people who do not have enough information and knowledge on a proposal not to vote.The idea of "knowledge affects power" of the KEV mechanism is undoubtedly positive, but in the final analysisAs a research team in a non-Western cultural background, we do not regard democracy as an unthinking, naturally correct value pursuit
The development of DAO is not only an organizational form itself, it can overcome endogenous alienation, make organizational goals better achieved, and also produce good externalities.One of them is reflected in the innovation and exploration of the governance mechanism. The power of innovation and exploration comes from newly created DAO organizations, but more importantly, it will come from DaaS service platforms such as Aragon, Moloch, DAOstack, and SubDAO.
The design of DAO's governance mechanism has gone beyond the technical boundaries of the blockchain, but returns to the thinking of the origin of human organization. We prefer to believe that the fundamental purpose of DAO is to reduce the cost of organizational coordination through technology. For example, quadratic voting is not only applied in DAO—the Colorado Democratic Party also experimented with quadratic voting to determine their program. This is not only a small improvement to the voting mechanism, but also a new social governance technology. Reform attempt, it will provide an important reference for the decision-making of public issues; and the idea of monetization of attention in holographic consensus, the philosophy of knowledge amplification power in KEV, the pluralistic core of belief voting, the fairness of anger withdrawal mechanism and reputation voting Ideas all have profound inspiration for our actual governance.
>>>References>>>
[1] Vitalik Buterin：Moving beyond coin voting governance
[2] Eric Arsenault：Voting Options in DAOs
[3] DAOrayaki: DAO Democratic Voting Series: Overview of Democratic Voting Mechanism
[5] Aragon：Choice Architecture & DAOs
[6] Vitalik Buterin：Ethereum Community Governance and Gitcoin Quadratic Funding
[7] Josh Zemel：An Explanation of DAOstack in Fairly Simple Terms
[10] Adam Levi：Reputation vs Tokens
[12] Nathan Schneider：Startups Need a New Option: Exit to Community
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