Sacrificial Specialization
A non-financial model for promoting thoughtful governance
Problem: Today, decentralized ecosystems vote on proposals across a broad spectrum of subject verticals ranging from infrastructural changes to gaming initiatives to matters of lending and more.
It is impossible for every voter to have specialized knowledge on, or care about, every proposal topic that crosses the ballot box of a DAO. This leads to voter burnout or worse, uninformed voting.
One intuitive approach is to establish domain specialists, or committees, who maintain some form of added jurisdiction over specific categories of proposals. However, this solution brings about further complications when it comes to establishing an egalitarian mechanism for defining and identifying these “subject matter leaders”.
Today’s assignment of this responsibility, and privilege, typically falls along the lines of conventional meritocratic markers.
For example, if a community member previously held a lead role at a major gaming company, they may be seen as a qualified specialist for the gaming category.
An alternative approach would grant special voting privileges based on capital commitment. If an individual is heavily financially vested in an initiative, they may also rise the ranks of prominence within that specific vertical.
While there is merit to these approaches (experience sets, and financial investment), these approaches have their limitations, especially in the context of decentralized, global, and often pseudonymous ecosystems.
I believe that it is incredibly probable that some of the most talented, vested, and creative individuals within our communities have limited access to the titles and organizational affiliations, or personal capital, required to be recognized through the above approaches. This is often due to no fault of their own but rather due to circumstance or location. Additionally, traditional status markers and capital access, though valuable, are often an imperfect approximation of qualification.
Through the conventional model, how does an incredibly talented developer in a less affluent region of the world stand a fair shot at becoming a recognized subject leader? And equally importantly, how much talent do we as a community lose if we don’t afford them that fair shot?
Solution — Sacrificial Specialization:
As has been discussed with many members of the community, Event Horizon, and its Implicit Delegation model are designed to be the bedrock for the continued evolution and expansion of DAO governance. One example of such conceptual evolution is found by identifying and rewarding DAO subject leaders with additional voting power, not capital, through a participation-centric model we call Sacrificial Specialization.
When looking at the plurality of on-chain voters, it is difficult to trace who any given actor is, what their experience set may be, or why they chose to vote as they did. However, there are a few criteria we can derive from individuals’ on-chain voting behaviors, which are more objective than the conventional credentialing used today: participation, consistency, and conviction.
Using these elements, we can establish a non-financial, game-theoretic model that rewards self-selected voters active in a specific vertical (e.g. DeFi, gaming, DAO operations) with further governance power, but at the expense of governance power in other verticals.
Sacrificial Specialization first identifies DAO proposals by categories (e.g. DeFi, gaming, DAO operations) We cannot force DAOs to tag proposals themselves, so this would be done on the Event Horizon meta-governance layer; on the Event Horizon duplicated proposals of the underlying DAOs.
Once these proposals are duplicated and tagged on Event Horizon’s voter page, every DAO citizen may vote in any or all of the proposals that fall into any of these categories.
Naturally, we will see many different voting patterns from voter to voter. However, each voter will fall along a spectrum between generalist and specialist.
A generalist participating in every proposal they find regardless of its category is in their own right a power voter worthy of recognition in other ways, but they wouldn’t be a great candidate for subject-specific leadership. It is impossible to determine their degree of specified conviction or interest toward any one subject category. Moreover, given their greater volume of proposal activity, it is improbable that they are able to put the degree of thought into each of the many proposals they participate in to warrant specialized influence.
A specialist may vote on fewer proposals in total, however, they clearly demonstrate conviction and consistency within the proposal category or categories which matter most to them. As a result, they become more natural candidates for subject-specific leadership.
Once a voter crosses a baseline threshold of participation, Event Horizon then assigns greater voting authority to specialists voting within their domain but at the expense of voting power in their non-specialized domains.
Let’s consider an example:
If a voter participated in 8 proposals, past the minimum threshold of, say, 5, and all within the category of gaming, they would achieve 100% specialization and the maximal vote multiple.
Vote Multiplier for Gaming proposals
90% | 3x
80% | 2x
70% | 1.5x
50% | 1.2x
<50% | <1x
This is where the game theory begins. Voters who care deeply or have domain-specific knowledge in a specific category are incentivized with more influence, not capital, in those areas of specialty. By specializing, they build up reputation and voting power, but in the process, cede voting authority on proposals in their non-specialty categories to others who are more interested and knowledgeable. The result is that specialists cover other specialists’ blind spots, just as in the real-world economy. While there are some generalist delegates out there doing great work, it’s time to carve out a space for specialists to thrive.
If they then, out of character, voted in two lending proposals, their category specialization would drop to 80% (8 of 10) reducing their added say in gaming proposals which they worked hard to achieve.
So, to continue maintaining their greatest multiple, specialized voters are incentivized with authority alone to forego proposals outside the scope of their specialization.
In effect, to maintain their greatest stature of leadership within a category, voters must sacrifice their right to vote in proposal categories for which they are not specialized.
By not voting on lending proposals, the voter is electing not to use their share of voting rights in the community pool for lending proposals thereby implicitly delegating their vote to other voters who will show up and care to vote on lending-specific proposals.
When gaming-specialized voters are incentivized to abstain from lending proposals, there are fewer voters using the communal voting pool during lending proposals. As a result, lending specialized voters receive a larger slice of the communal pool, above and beyond the vote multiple they’re getting for specializing.
And, the same applies to the inverse. If lending specialized voters choose to abstain from gaming proposals, gaming-specialized voters are also splitting the communal pool with fewer others and are therefore receiving a larger slice of the communal voting pool.
The above leverages one of the central mechanics of implicit delegation:
When participation is low… each voter receives a larger slice of the public access pie…
When participation is high… there are more voters splitting the same pie, however, retail participation is high, which is a great win for the ecosystem.
Interestingly, Sacrificial Specialization also opens new avenues of further conviction signaling across the greater community.
If many specialized voters were to step outside their area of specificity to vote for or against a proposal in a category different than their own, this demonstrates significant conviction around that particular proposal. The specialized voters are demonstrating that they are willing to depreciate the multiple they’ve carefully garnered within the category of their preference to be heard in a category of proposal they typically would not partake in. This could signal a highly contentious, or highly well-received, proposal.
To draw a parallel this mechanic functions similarly to growth-based veEscrow models by which an escrow locker gains authority over time and through this time-cost gained authority they become increasingly less likely to withdraw from their escrow position. Each day they gain more authority and the cost of withdrawing (losing this mounting authority) increases thereby establishing greater lock-in.
As a final note, myself, and the Event Horizon team, work hard to imagine incentives and models which, contrary to most crypto-mechanics, are not predicated exclusively on capital. Instead, we look to build mechanics and agent alignment that stem from within voting and the voting process itself:
Within Implicit Delegation, the reward and incentive to participate (particularly when others aren’t) is having a greater voice, or *voting power*.
Within a sacrificial specialization, the cost is a sacrifice of voting power within proposal categories outside one’s specialization (not capital). The reward is greater voting power within the proposal category of one’s specialization (again, not capital).
In doing this we create ecosystems which are…
1. financially sustainable in that they forego token inflation and cost the DAO and our community nothing.
2. accessible to our global network of citizens many of whom do not come from positions of significant capital
3. scalable as they do not require constant resource allocation to maintain functionality or participation.
