Conceptual Objectives

Recognizing the strengths and weaknesses of existing models, DeXe Protocol DAO has intentionally chosen a path of piecewise linear and nonlinear functions and has established the following criteria for the mathematical model of vote tallying and reward distribution.

Combatting Plutocracy and Monopoly

The more tokens that are concentrated in one's hands, the less effective the voting power calculation should be – this helps prevent the accumulation of too much influence by any single party. As the number of tokens in a balance increases, the function for calculating voting power will deliberately slow down its growth.

Meritocracy

The chosen mathematical model must account for the presence of experts and specialists whose determination is regulated by the DAO itself and whose voting efficiency is greater than that of an average token holder. Moreover, the distribution of voting efficiency among different experts can also vary.

Preventing Sybil Attacks and Manipulations

Nonlinear functions must prevent exploitation in areas where they exceed the value of the linear function y = x (where y — is voting power, and x — is token balance). Users should not be able to distribute their token balances across multiple wallets and exploit the vote/reward counting function in areas with the most efficient growth.

Proportionality of Vote Strength to Rewards

If the model includes rewards, they should be distributed proportionally to the voting power according to the respective nonlinear functions. Firstly, this incentivizes the delegation of tokens to experts for whom the voting power calculation functions are more favourable than for regular holders. Furthermore, it discourages delegating all tokens to a single expert, as the more tokens an expert holds, the fewer rewards will be paid out for each token.