Governance

In political science, the idea of the consent of the governed is foundational. A government’s legitimacy and moral right to use its power is only justified (and lawful) when consented to by the people or society in which that political power is exercised.

One problem with the powerful web2 platforms is that they do not seek the consent of their userbase for any of the changes that they roll out to the platform, nor do they allow their users to exit the system without a high cost.

Governance: the foundation of Bitcoin

Moving beyond 1:1 coin voting is an opportunity to create more cartel-resistant forms of governance. There are inequalities and incentive misalignments even in the absence of attackers (these systems can be dominated by the rich & powerful), and (outright attacks through various forms of (often obfuscated) vote buying in 1:1 coin voting systems.

Decentralized Reputation Systems - Because so much value transfer in the world depends on the reputation of the parties in the transaction, it could be argued that Identity is an important part of the internet of value.

Proof of Personhood - If we could find a cryptoeconomic way to prove unique human-ness, we could move the internet of finance from “one token one vote” to “one human one vote” and unleash a wave of digital democracy. With proof of personhood, the ecosystem could move to DAOs built on one-human-one-vote. This unlocks use cases like:

Voting Mechanisms

Ranked Choice Voting- an electoral system in which voters rank candidates by preference on their ballots.

If a candidate wins a majority of first-preference votes, he or she is declared the winner.

If no candidate wins a majority of first-preference votes, a candidate with the fewest first-preference votes is eliminated. First-preference votes cast for the failed candidate are eliminated, elevating the second-preference choices indicated on those ballots.

A new tally is conducted to determine whether any candidate has won a majority of the adjusted votes.

The process is repeated until a candidate wins an outright majority.

Quadratic Voting - a collective decision-making procedure which involves individuals allocating votes to express the degree of their preferences, rather than just the direction of their preferences. By allowing the voting mecahnism to take into account the degree of prefrences, a more optimal expression of preferences can be achieved.

Conviction Voting offers a novel decision making process that funds proposals based on the aggregated preference of community members, expressed continuously. By allowing the voting mecahnism to take into account conviction, a more optimal expression of preferences can be achieved.

Mechanisms cont’d

Staking - a way of putting tokens at risk in order to express conviction in a specific thing (at an individual level) or secure a system (at a system level). Staked funds are subject to slashing if stakers or they objects they stake upon misbehave.