Polkadot’s Governance Innovation: Adaptive Quorum Biasing
In this article I introduce Adaptive Quorum Biasing, a revolutionary governance innovation which is unique to Polkadot.
What is often overlooked about Polkadot is that it is more than just a cryptocurrency, it is also a DAO (Decentralised Autonomous Organisation). Those holding Polkadot tokens, or DOT, have the right to vote in decisions about Polkadot itself, giving DOT holders the opportunity to participate in pure democracy.
Problems with DAO voting mechanisms
An issue that arises in DAO voting mechanisms is the size of the DAO community itself, and the resulting number of token holders who actively participate in a vote. The governance model of a DAO needs to be capable of adapting, where possible, to changes in size and scale of voting activities.
Having a governance model which imposes traditional quorum requirements in such a context can be limiting. Quorum is the minimum number of voters required for a vote to be considered valid. Where a DAO is in its infancy or just starting to scale, meeting quorum requirements can be an administrative hurdle and mean that few votes are able to pass. Votes may have to be repeatedly delayed until voter turnout requirements are met, which in turn stalls organisational growth and change.
In the Polkadot ecosystem, Parachains may be at risk of such problems when they are just entering the ecosystem and have a small voting base or community. Additionally, most blockchains with active governance see only a small percentage of people voting, which can be problematic.
Adaptive quorum biasing was conceived to address this.
The operation of adaptive quorum biasing “avoids the tyranny of the minority” — that is, the influence and control of the loudest and most active minority of voices.
What is Adaptive Quorum Biasing?
Adaptive quorum biasing removes the need for a strict quorum and enables a voting system that reflects community vote turnout. As quorum requirements can be difficult to meet, adaptive quorum biasing adapts the requirement for quorum based on how many voters turn out, and the origin of the proposal being voted on. This revolutionary innovation removes the hurdles of strict quorum and adapts to communities and DAOs of all sizes.
When Adaptive Quorum Biasing is used
Adaptive quorum biasing is used in the Polkadot ecosystem when a referendum is introduced. A referendum is a voting scheme that has a specific proposal attached to it. Voting power is based on how much DOT a voter has staked, and for how long they are willing to lock those tokens away. The voting period for a referendum occurs for a fixed period of time, and votes are tallied based on binary responses: aye or naye.
How does Adaptive Quorum Biasing operate?
The requirements for adaptive quorum biasing differ based on where the proposal originated. Proposals may come from a member of the Polkadot community or a Council member. The Council is a group composed of individuals who are voted in, who are to represent passive DOT holders (that is, those DOT holders who choose not to participate in a vote).
Public Referenda
A positive turnout bias is applied to public referenda, also known as the “Super-Majority Approve” formula. In this instance, with a small voter turnout, a heavy supermajority of aye votes is needed for a proposal to pass. However as voter turnout gets closer to 100%, the vote becomes a simple majority (50% +1) requirement.
Per the image above, for referenda proposed by the public:
- Where a referendum has 25% turnout a majority aye vote of 66% is required
- Where are referendum has 75% turnout a majority aye vote of 54% is required
- Where are referendum has 100% turnout a majority aye vote of 50%+1 (simple majority) is required
“If only 5% of token holders vote, then 82% of that 5% must vote yes in order for that vote to pass. This effectively solves the turnout problem, which is the major issue with #governance today.”
— Ryan Zurrer (Web3 Foundation)
Council Referenda
A referendum proposed by the Council has a different threshold to pass. Where the Council is in complete agreement, the proposal is biased towards passing. A negative turnout bias model is applied.
Per the image above, for a unanimous Council proposal:
- Where a referendum has 25% turnout a tally of only 34% aye votes is required
- Where are referendum has 75% turnout a a tally of only 46% aye votes is required
The Council’s view holds the most weight in this instance, so the threshold for the aye votes from the public is much lower.
In the case the Council is only in majority agreement (not unanimous), it is a simple majority vote (50% + 1).
Still too complicated?
See my TLDR summary below.
- Where a proposal originates from the Public, a Positive Turnout bias is applied. This means less voter turnout requires a higher threshold of aye votes.
- Where a proposal originates from the Council, and the Council is in unanimous agreement, a Negative Turnout bias is applied. Less voter turnout requires a lower threshold of aye votes.
- Where a proposal originates from the Council, and the Council is not in unanimous agreement, a simple majority is required.
This cutting edge solution to the problems with strict quorum exemplifies the ways DAOs can innovate and take risks with new governance models, in ways that traditional institutions cannot and do not. It is an exciting time for governance and the mechanisms through which humans choose to organise themselves. By utilising models like Adaptive Quorum Biasing, Polkadot paves the way as a leader for on-chain governance.
Note: although not part of Gov2, Adaptive Quorum Biasing and Gov1 will still be available via Polkadot’s Democracy Pallet.