DAO Voter Turnout and Other Impossible Feats of Humankind
It’s DAO season 756, where the questions are getting harder and their answers less avoidable. In the second half of 2022, a scan of Discords, Twitter, and Google returned a feeling that voter fatigue is high and turnout is low for the average DAO. How low? DeepDAO tracks voter participation, avg. votes per proposal, and other data points, and the majority of comparisons do not look great. However, much of the data is in development flux it seems and a bit hard to parse out. Speaking internally within CityDAO, the CityDAO numbers do not match the DAO’s books. Tally tracks voters versus holders, but that’s not exactly what we’re looking for, and the site does not have an exhaustive list of DAOs. Messari doesn’t yet have detailed DAO voting data yet, either. (If you know of other DAO voting data sources, please send my way!). So, for now, let’s trust collective sentiment. With voter turnout being a major tool in measuring the health of a DAO, not only in terms of community engagement and interest, but also in terms of existential issues like security and decentralization, it’s necessary that players in the space throw everything at the wall to see what splatter art can be made.
The New and Improved Strategy 5,000 or a Collective Moment of Sobriety?
The variety of different decentralized voting mechanisms and continued addition of new strategies tells us there isn’t a slam dunk system yet. The plethora of available strategies won’t be rehashed in this article, but many can be found at the bottom of this article. Alongside experimental voting mechanisms, push notification tools could keep voting top of mind (but also raise collective annoyance to Crunchwrap Supreme levels). DAOs could provide perks to members for maintaining certain voting participation percentages. There is even talk of coding governance NFTs to degrade in value in proportion to low voting activity (governance token slashing being the fungible equivalent). DAOs are trying different solutions, which is necessary and super rad, but while each method has its strengths, each has its weaknesses — centralization over time and favoring the wealthy being the most common flaws, e.g., fungible token voting. Ew.
One can pick apart or champion voting strategies all day, but I would argue that there are bigger, more fundamental problems jammed into the spokes that might not be solved by any voting mechanism:
- The Do As Many Things As Possible Now Culture: People are voting in multiple DAOs at once, have two jobs, freelance gigs, they’re investing, oh, and have seventeen social media things to check every hour.
- The average age of DAO participants: I almost don’t want to know this number. I remember when I was 26, and good Lord, I would not have wanted to spend my time pouring through governance proposals and forum posts week in and week out. Younger people vote consistently and measurably less than older people. Portland State University did a study of local elections in 50 cities, many having a median voting age above 60. Some cities (Las Vegas and Miami) had a median voting age of 68! Based on these numbers, counting on the average person in their twenties or even thirties to consistently and productively participate in organizational voting is probably not the best bet, especially when we’ve been entrenched in…
- … A pandemic of instant gratification: It has completely annihilated the average person’s capacity to take careful time for… anything. Due to the ‘D’ in DAO, most participants need to care about their DAO, more so than with traditional organizations. And while the space still has the shiny newness factor in play, this is a catastrophically steep hill to climb in the 2020s.
- The speculative boom-and-bust nature of crypto is a high-octane, chaos chamber: It’s like a group of scientists are trying to build a high precision, super-low tolerance measuring instrument, but they’re building it inside a car being smashed around in a demolition derby.
“Sometimes You Eat the Bar, and Sometimes the Bar, Well…”
If we are slowly convincing ourselves that DAOs are the future, then in order for them to continue to Pac-Man the world, not only do they need to be what they are named after, but they need to best traditional models in as many major aspects as possible. Otherwise, there’s no point in continuing these experiments.
So, what thresholds do we deem sufficiently decentralized? For a DAO of 100 voting members, is it adequate to have a 51% quorum for smaller decisions and 67% quorum for larger decisions? Can quorums lower with 1,000 token holders? If so, how much? Personally, if I authored a yes-no proposal concerning a large decision, I wouldn’t feel remotely comfortable unless at least 51% of all voting members approved my proposal.
Which leads us to the core question at hand: what’s the voting participation bar that DAOs need to smash through? In my very own and personal fantasy land, 90–100% participation would be needed on a proposal I authored, regardless of organizational size. Impossible and impractical, I know. For publicly traded companies, the percentage of retail shareholders that voted was around 28% from 2016 to 2020. However, that number was 91% for institutional investors during the same stretch. This equates to about 73% of total shareholders. Since 1932, U.S. presidential election turnout has mostly fluctuated between 50% and 60%. (Midterm election turnout results are always less.) From the Portland State study in the previous section, many of the cities had total turnouts under 20%. These are large cities like Washington, D.C., Los Angeles, and New York City. (So we currently show up more for profits than daily civic life, which feels about right at this quite late hour of late-stage capitalism.) To rattle the cages, I think we have to show Beefy 5-Layer Burrito margins of difference from these legacy systems. Given the preceding numbers, I offer that if we can consistently live in the 66–75% ballpark, we could claim one of hopefully many victories in DAO vs. TRAD. (Governance tokens that are also utility tokens muddy these waters though, as people may use them in DeFi or other avenues only, which is participation, just not the kind we are talking about here.)
And so, perhaps the most important question is, is this realistic? If the realistic percentage is less than the percentage to beat the status quo or regulation thresholds, then the industry must allocate ample resources toward improving numbers. If we get to a point where we can’t beat these bars, then what do we do? Do we pack it in? Do we only use the DAO structure and ethos for limited, hyper-focused purposes or missions? Luckily, DAOers wield technology fairly well, and we’ll keep seeing innovative solutions arise. Hopefully, this will not be our Waterloo.
Convenient, Compensated Orgasms
I asked a friend who is in his mid-30s what factors would make him consistently vote in elections, companies, events, whatever, and he immediately said, “I should be able to vote from my couch with my phone.” All harrumphs and “society is doomed” reactions aside, this is now where we collectively and firmly sit. But what my friend is talking about is a system that is not only convenient but uber-trustworthy also. And it’s increasingly likely that blockchains will be the first architecture that can offer both.
As the SEC begins to wrap its fingers around the Regulation Hammer, if the bulk of DAO members are not voting, then many projects may be forced to drop the DAO moniker, destroy their token, and/or begin legal endeavors that no org wants to do. The DAO space needs to keep experimenting, tweaking, and evolving, but I think it’s important to also explicitly acknowledge the surrounding, limiting parameters. From here, we can be more realistic in our approaches and expectations.
In my eyes, if no slam dunk ideas emerge soon, the next logical step is paying people to vote. It’s not a big stretch. Companies already pay for our personal information, and collective sentiment data is quite valuable. If DAOs are going to keep infiltrating organizational models, and more companies and sectors adopt decentralization, then making voting an essential, compensated duty seems reasonable. (I will explore this in detail in upcoming posts.) Going further, we can hard code high thresholds into our smart contracts, so that a given DAO cannot and will not function without high voter participation. We’ve all wanted our voices to be heard in local or global decision making, and now that we have promising means to make that happen, we should really give this opportunity a go.
I wish our daily lives were slower and less chaotic to where this wasn’t a widespread predicament and that our systems gave us more (read: better) options. Ultimately though, I do see us transcending voting in the future. Or, maybe better put, voting will evolve into something else — a new framework for collective agreement, so to speak. What would that look like? A novel use of smart contracts perhaps? Hive-mind wizard hats? If a new, effective system doesn’t come along soon, then we’ll have to program voting to give us orgasms or something.
DAO Voting Mechanism links:
DAO Voting Mechanisms Explained [2022 Guide]
A Walkthrough of Polkadot’s Governance
Popular Voting Mechanisms Used by DAOs
aaannnnddddd Conviction Voting: A Novel Continuous Decision Making Alternative to Governance.
This is the second article in a four-part series that focuses on information and voting in DAO and civic landscapes. Here is the series list:
Article 1: Digital Symmetry Coursing Through the Network City
Article 2: This article.
Article 3: Universal Basic Information: Mining the Renewable Public Good
Article 4: The Universal Basic Information Dashboard Framework
UBI Dashboard Github Repository: Back end — Deployed to Ethereum Goerli Testnet. Instructions on how to interact with the contracts are in the README.
Live “Minimum Viable Product” website: UBI Dashboard dApp
