If ratified, Uniswap DAO will delegate 2.5 million UNI each to four active but underrepresented delegates for a one-year term. A Temperature Check proposal regarding the initiative has already been approved by the DAO.
Earlier this month, StableLab raised the issue of assigning some tokens to active delegates with a voting power of less than 2.5 million UNI. The firm, which specializes in professional delegation, governance framework design, and product development, argued that many top delegates had less than a 50% vote participation rate, and some even as low as 10%. In particular, some delegates with large holdings have never voted on-chain.
“Despite numerous improvements to Uniswap’s governance, there are still several areas that require further improvement. One prominent area is governance participation, which has witnessed a downward trend compared to late 2022 and early 2023,” the company wrote.
To tackle this problem of inactivity from some top delegates, StableLabs suggested allocating 2.5 million UNI to “each of 4 active yet underrepresented delegates.” The 10 million UNI allocation will come from the DAO’s treasury.
To be selected, a delegate must have less than 2.5 million UNI. They must also have voted on at least 80% of the proposals over the last three months. Furthermore, interested delegates must have a Delegate Platform on Uniswap Forum under Delegation Pitch.
The Temperature Check proposal on Snapshot enjoyed unanimous support from more than 3,000 voters. However, one member of the DAO has suggested tweaking the parameters to accommodate more delegates. Rather than allocate 2.5M to four delegates, ten delegates will each receive 1M.
Enhancing DAO Governance with Delegation
Decentralized autonomous organizations (DAOs) are founded on the principles of decentralization and community-driven governance. Key decisions are made through consensus of members rather than top-down hierarchies. This democratic approach often involves voting mechanisms to represent the will of stakeholders.
However, as DAOs scale in size and complexity, direct democracy hits limitations. It becomes impractical for every member to vote on every proposal or operational matter. This is where the concept of delegation comes in – allowing stakeholders to delegate their voting rights to others in the community.
Delegation enables DAO participants to transfer their voting power to other entities that can represent them in governance matters. These delegates vote on proposals based on the aggregate voting weight delegated to them.
For example, a DAO member could delegate their votes to a trusted community leader, a consortium they support, or even an algorithm programmed to vote based on set parameters. The delegate accumulates voting power from all members that entrust it to represent them.
The mechanics of delegation may differ across DAO platforms but generally involve:
- Delegates registering as candidates for delegation. They set up a profile outlining their vision, credentials, and governance philosophy.
- Members assign votes to their chosen delegate via on-chain transactions. The voting power gets locked to the delegate.
- Delegates cast aggregated votes on members’ behalf when proposals open for voting.
- Voters retain the ability to take back (“undelegate”) votes from the delegate at any time.
Delegation facilitates greater participation and decentralization. it allows less-active members a say through delegates while minimizing voter apathy issues seen in direct democracy. Delegates are motivated to engage deeply in governance and signal credibility to attract voting power.
As DAOs continue maturing, delegation is poised to grow as a critical tool for balancing decentralization with practical governance. The ability to delegate voting power maintains flexibility for members while rewarding dedicated experts. This empowers DAOs to achieve community-driven governance at scale.