Voting Models
Navigating governance in a decentralized world presents a unique set of challenges. Traditional frameworks often struggle to balance efficiency and inclusivity and rarely scale well with the community's evolving needs. The Protocol suggests a solution to this challenge with various voting models. When you create a DAO, you can choose a governance logic that best suits your objectives.
Linear Voting
Linear governance is a clear-cut approach where each token grants one vote, providing simple and direct decision-making. Such a configuration is ideal for small organizations with uncomplicated tasks that do not require complex governance logic.
While easy to understand and implement, the linear model doesn't leverage the full capabilities of the Protocol. In this model, all votes are counted linearly, equivalently to the number of tokens held. Features like expert functionality and token delegation are underutilized in such DAOs. The reason is that an expert's vote is treated the same as a regular token holder's vote, regardless of their level of expertise or trust within the DAO community. Additionally, this model does little to combat the consolidation of power, as any number of tokens can be concentrated in a single wallet without diminishing voting strength.
Advantages:
Ease of Use: The linear voting model is easy to understand and implement.
Clarity in Vote Counting: The method for tallying votes is transparent and straightforward.
Disadvantages:
Underutilization of Platform Features: The model doesn't motivate users to delegate tokens to experts, thus not taking full advantage of the platform's functionalities.
Lack of Power Decentralization: No mechanisms to discourage the concentration of tokens (and, thus, power) in a single wallet. No deterring factors or incentives exist to encourage the delegation of tokens.
Lack of Flexibility.
Nonlinear Voting
Weighted voting is a nonlinear voting system designed to determine the voting power based not just on token balance but also on various parameters aimed at enhancing governance efficiency and establishing a more flexible voting logic.
Nonlinear functions in this system serve to prevent plutocracy — the concentration of power in the hands of a few — by slowing down the increase in voting power as a token balance grows. This mechanism better reflects the voices of the community and diminishes the influence of large token holders.
Furthermore, weighted voting considers different coefficients when tallying votes for different groups, fully embracing the role of experts within a DAO. It creates mechanisms for building competent communities where expertise can be rewarded in decision-making processes. Ordinary DAO members can delegate their tokens to qualified experts who vote on behalf of regular holders, thus enhancing the significance of their tokens. It also saves time and gas fees by delegating decision-making to trusted experts.
DeXe Protocol DAO has introduced a specially designed governance model focusing on knowledge, expertise, and participant contributions. This model contains a combination of mathematical and conceptual measures that counteract the concentration of power in a single party, considering expertise in vote counting and encouraging active involvement by incentivisation mechanisms.
Advantages:
Antiplutocratic: promotes a democratic and equitable voting structure by mitigating power dominance.
Power of expertise: rewards knowledge and expertise over mere token ownership.
Flexible in design: enhances adaptive approach in designing DAOs with complex structures and specific needs.
Disadvantages:
More challenging to implement: demands a complex approach for implementation, requiring a more profound knowledge of math models.
DeXe Protocol DAO has developed its weighted voting model, which will be elaborated on in the section about the concept of Meritocratic Governance below. This model incorporates mathematical and conceptual solutions, blending linear and nonlinear functions to achieve practical decision-making tools. It incentivizes DAO members, encourages competent decisions, and enhances protection against malicious actions that could disrupt the DAO's operations. As with the entire Protocol, this model is open-source and will be available for selection when creating a DAO on the DeXe Protocol.
Custom voting logic
The Protocol offers the ability to customize your voting model by integrating it as a custom contract that meets all the necessary Protocol standards. When setting up a custom voting logic, the DAO creator assumes full responsibility for tallying votes and distributing rewards for voting, as the Protocol cannot guarantee the security of user-designed solutions. However, DeXe Protocol DAO encourages the discovery of more advanced and forward-thinking governance models and therefore provides this capability out-of-the-box. The Protocol includes all the necessary methods for connecting custom contracts for the voting model.
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