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CIN - Coin Voting
Supports:
Context:
In DAOs, governance and decision-making are central challenges, with the need to distribute power fairly while ensuring efficient and effective management. Traditional models either centralize decision-making or struggle to scale as participant numbers increase.
Problem:
Decentralized entities require a governance mechanism that accommodates scalability, represents stakeholder interests proportionately, and resists manipulation. Common solutions often fail to address representation according to stake, susceptibility to Sybil attacks, or inefficiencies in decision bandwidth as member counts grow.
Forces:
- Representation: Ensuring that decision-making power is proportional to the stake and commitment to the DAO.
- Efficiency: Managing the governance process in a manner that decisions can be made swiftly and effectively.
- Security: Protecting the integrity of the voting system against Sybil attacks and other manipulative tactics.
- Equity: Balancing between heavy and light stakeholders to prevent dominance by a small group with large holdings.
Solution:
Implement Coin Voting where decision power in a DAO is directly proportional to the number of tokens a member holds. This method reasons that members with a larger financial stake are more incentivized to make decisions beneficial to the DAO’s long-term success. To implement this:
- Define the number of tokens required for various types of voting decisions.
- Use blockchain technology to transparently track and verify token ownership at the time of each vote.
- Consider incorporating mechanisms such as locking periods where tokens are temporarily immobile while engaged in voting to prevent quick in-and-out trading meant to manipulate decisions.
This approach inherently reduces the risk of Sybil attacks since acquiring tokens typically involves financial cost or effort, placing a barrier against multiple fake identities influencing outcomes.
Therefore:
Use Coin Voting to align voting power with financial stake and commitment within the DAO, thus ensuring that those most invested in the DAO’s success have corresponding influence in its governance.
Supported By:
