Voting is the primary method for decentralized decision-making in DAOs. Understanding DAO voting and governance processes provides insight into how these next-generation organizations operate.
DAO Governance
DAO governance refers to the processes and infrastructure that allows decentralized member control:
- Proposal Mechanisms – Ways for any member to submit proposals requesting changes or funding.
- Token-Weighted Voting – Votes on proposals are weighted by the number of governance tokens a member holds.
- Vote Delegation – Members can delegate their vote weight to other members they select as representatives.
- Determining Thresholds – Critical parameters and actions may require elevated vote thresholds like supermajority support.
- Upgradeability – DAO rules and processes can be improved through proposals and voting over time.
Good governance balances widespread participation with effective coordination.
On-Chain Vs Off-Chain Voting
DAOs handle voting both on and off their blockchain:
On-chain voting
- Votes get recorded immutably on the blockchain itself.
- More secure but gas fees make frequent votes cost prohibitive.
- Better for small voter pools or low-frequency critical votes.
Off-chain voting
- Voting occurs off-chain through third party apps like Snapshot.
- Fast and free but more vulnerable to manipulation or censorship.
- Allows frequent large-scale sentiment signaling and gauging proposals.
Hybrid models use both on and off-chain voting for different needs.
DAO Voting Platforms
Popular platforms DAOs use for voting include:
- Snapshot – Off-chain signaling votes through Ethereum wallet signatures.
- Aragon – On-chain voting native to Aragon DAO framework.
- Tally – General purpose off-chain voting app usable by any DAO.
- Colony – Reputation-weighted voting software for task assignment and funding.
- Raid Guild – Off-chain voting tailored to guild membership coordination.
- DAOHaus – Natively integrated voting for DAOs launched on DAOHaus.
DAOs mix and match platforms to balance tradeoffs like cost, security, and functionality.
DAO Proposal Process
The proposal process is how DAO members submit ideas for the community’s consideration:
- Drafting – A member authors a proposal according to DAO guidelines on format, requirements, etc.
- Submission – Proposal gets submitted to the DAO through the established channel like a forum.
- Discussion – Community deliberates merits, issues, and amendments around the proposal. Feedback gets incorporated.
- Voting – Once finalized, members vote on whether to approve and enact the proposal.
- Implementation – If passed, the proposal gets implemented, paying out any funding etc. as approved.
A clear proposal process enables quality ideas while limiting spam.
Creating a DAO Proposal
When authoring a DAO proposal:
- Clearly explain the concept and motivation – the problem it solves or goal it achieves.
- Provide specifics on the implementation plan if the proposal is approved.
- Justify the budget requested and how funds will be directed.
- Outline relevant timelines and milestones for enacting the proposal.
- Consider second order effects and governance tradeoffs like precedents set.
- Make sure the proposal aligns with the DAO’s values and mission.
High quality and thoughtful proposals gain more community support.
Participating in Proposal Discussions
Discussion around proposals helps strengthen and refine them:
- Ask constructive questions to better understand the proposal’s implications.
- Highlight benefits, issues, or considerations others may have overlooked.
- Float modifications or amendments to improve the proposal.
- Gauge community sentiment and vocalize the wisdom of the crowd.
- Research details so you can provide informed feedback based on facts.
- Limit toxic behavior and stay respectful even during disagreements.
With engagement and deliberation, discussions coalesce around the best collective path forward.
DAO Voting Best Practices
To exercise good governance through voting, members should:
- Take time to research proposals in depth before voting. Don’t just skim.
- Participate consistently – don’t just vote on hot topics of personal interest.
- Focus on what benefits the DAO’s mission rather than short-term self-interest.
- Delegate your vote to experts if you lack understanding on niche topics.
- Float clarifying questions on proposals before voting rather than making assumptions.
- Don’t spread misinformation or manipulate the community to sway votes.
Wise and informed voting produces better decentralized coordination.
Common DAO Vote Types
Beyond basic proposal approvals, common vote types include:
Funds Allocation – Members vote to allocate treasury funds to different initiatives like grants.
Protocol Changes – Updating core parameters that affect governance incentives and functionality.
Worker Proposals – Compensating members for work completed like development, content creation etc.
Beneficiary Votes – Choosing recipient organizations to receive donated funds.
Constitution Amendments – Making changes to the DAO’s core charter and principles.
Subdomain Votes – Delegating localized governance to semi-autonomous sub-DAOs or guilds.
Whitelisting – Votes on approving new tokens, NFTs, or platforms integrations.
Specialized vote types enable tailored governance across the diverse range of DAO activities.
Vote Delegation
Delegation allows token holders to assign their votes to others. This enables:
- Expert voting power – delegating to those with information advantages.
- Consolidated voting – coordinating votes among constituencies and blocs.
- Recurring delegation – assigning votes to trusted community stewards long-term.
- Liquid delegation – votes can be retracted and reassigned dynamically.
- Decentralized curation – emerging experts can gain delegated votes as reputation builds.
Delegation facilitates reputational DAO governance that can scale with community growth.
DAO Vote Signaling
Beyond binding votes, signaling votes help gauge sentiment:
- Pulse votes – Quick sentiment checks to test support on proposals in draft form.
- Educational votes – Non-binding votes to get the community thinking on key issues.
- Trial voting – Initial trial votes to measure support before an official binding vote.
- Parameter changes – Testing community feeling on numerical variables like fee rates.
- Straw polls – General community polls to guide high level direction.
Signaling provides insight without requiring formal proposal commitments.
Vote Staking and Locking
Some DAOs enhance voter commitment through staking and locking:
- Token staking – Locking up tokens for governance voting and rewards.
- Voting escrows – Locking tokens for a period to gain higher voting influence.
- Voting bonding – Locking tokens or assets behind specific votes to signal conviction.
- Proposal streaks – Rewarding members for consistently voting over time.
- Skin in the game – Requiring governance NFTs or tokens be staked in the protocol to vote.
Mechanisms like these incentivize more engaged participation and de-risk voter apathy or indifference.
Fee-Based Voting
In some DAOs, voting power comes from paying fees rather than holding tokens:
- Fees are proportional to number of votes purchased. More fees paid garners more influence.
- Unlike tokens, purchased votes decay over time rather than transferring permanent ownership.
- Those wanting short-term say can pay for temporary votes around key issues.
- Helps balance plutocratic risks of pure token-based voting.
- Generates revenue for the DAO treasury to fund operations.
Fee-based voting provides a complementary governance input.
Reputation-Weighted Voting
Some DAOs blend token voting with gauges of reputation:
- Reputation scores reflect expertise, activity, or contributions.
- Reputation multiples token voting power as a supplement.
- Those gaining respect naturally earn greater say in specialized domains.
- Algorithms dynamically calculate reputation based on behaviors and peer reviews.
- Helps elevate meritocratic authority to complement token plutocracy.
Reputation blending mitigates sole reliance on token wealth for influence.
Time-Locked Voting
Time-locking votes can reduce coordination problems:
- Votes get sealed for a set period before results are tabulated.
- Discourage overt strategic voting based on early vote tracking.
- Reduces proposal frontrunning by whales to game incentives.
- Builds psychological safety to vote independently without pressure to conform.
- Frees discussions to focus on ideas over politics and vote lobbying.
Time-locking localizes voting power distributed across time intervals rather than just at a final moment.
Ensuring Sovereign Voting
To prevent voting manipulation, DAOs institute measures like:
- Sybil-proofing via identity verification and vouching to limit sock puppets.
- Short proposal windows to disincentivize vote buying and complex coordination.
- Random sampling rather than full votes to raise effort of manipulation.
- Minimum voting thresholds so smaller holders have say on low-turnout votes.
- Zeroth delays on enacting proposals to allow appeal processes.
These checks sustain credibility and prevent hijacking by domineering minorities.
Conclusion
DAO voting and governance processes enable decentralized organizations to transparently coordinate resources toward shared missions. Blending tools like proposals, token-weighted voting, delegation, member discussion, and signaling creates a comprehensive system for collective decision-making able to scale from small groups to thousands of members. With thoughtful policies that balance widespread participation against exploitation, DAO governance systems could profoundly expand how communities worldwide choose to self-organize and distribute power.
