To burn, or not to burn? A new governance system
Three months ago we made a commitment to using 50% of our profits for buy and burn. In addition to the 30,000,000 $SWEAT we burned on October 4th 2022, we have since used $1M of our profits to buy 61,704,529 $SWEAT at an average price of 0.0162 USD/$SWEAT on the open market.
Rather than burn it immediately, we want to allow the community to determine what to do with the $SWEAT. We have already outlined our plans for decentralization, and this is the beginning of the process of handing over decision-making power to the community.
Within only three months of launch, we are delighted to host our first Sweat Economy governance vote.
The proposal is for the Sweat Foundation to burn $1M of $SWEAT that it has purchased using its profits.
- Yes vote: 61,704,529 $SWEAT will be burned (destroyed and removed from circulating supply) — for more information on why we have promoted this in the past, please see our blog post on buy and burn.
- No vote: the Foundation will hold the 61,704,529 $SWEAT for usage elsewhere.
- Ends: Monday 12th December 24:00 UTC.
We have devised a unique and innovative voting system. We do not know of any other project that is doing governance like this; it is something of an experiment, and we are excited to see how it unfolds.
We believe it represents a fair, secure, and engaging voting process, while providing another real use case for $SWEAT.
Use your $SWEAT to vote
Users send $SWEAT to YES.sweat or NO.sweat as an indication of their choice. 10% of total $SWEAT on both addresses will be distributed to 10 randomly selected winners.
Users can vote by sending $SWEAT to these addresses from any wallet, including the Sweat Wallet. Below is a guide of how to send $SWEAT from the Sweat Wallet:
- On homescreen, click ‘Transfer’
- Then ‘Send’
- In ‘username or address’, enter YES.sweat or NO.sweat
- Select how much $SWEAT you want to send
- Confirm and transfer
- NB — you will need NEAR in your wallet to fund the transaction
The amount of $SWEAT transferred is the amount of weight a voter wants to put behind the vote. The account YES.sweat or NO.sweat with the most $SWEAT in it at the time of voting closure will determine the outcome. If YES.sweat has more $SWEAT, the proposal will pass. If NO.sweat has more $SWEAT, the proposal will be rejected.
10 random wallets addresses that vote will receive 10% of the combined $SWEAT that is transferred for voting. The winning wallet addresses will be randomly selected from all voters, not just those who vote on the winning outcome, because we want to incentivize voting according to what you believe to be the best choice, not on what you believe will be the outcome.
After this allocation, all the remaining $SWEAT balances on both YES.sweat and NO.sweat will be burned.
The benefits of this system
First of all, let us explain why we do not want a ‘one vote per person’ system. The common way to identify a person on-chain is by their wallet; so this system is really a ‘one vote per wallet’ system. It is easy for a developer to create some code that enables the fast creation of many wallets, from which they can transfer small amounts of $SWEAT to manipulate the vote. Although the ‘one vote per person’ system appears democratic by allowing for the decision to be made by the majority of voters, it actually leaves the entire voting process vulnerable to manipulation.
The system we have proposed does not factor the number of wallets used by one individual, so that solves the issue of many wallets used by one user.
Another common system is for token staking to determine voting power. We believe our proposal can improve upon this by curbing the influence of whales, or users with very large amounts of $SWEAT. Of course, they can still influence the vote, but at the benefit of the ecosystem (their $SWEAT used to vote is burned).
In other words, any whale might lose their whale status by trying to throw their whale weight about. If the whale has infinitely deep pockets, their decision to vote would have an upside for the whole ecosystem by representing a mass burn of tokens, which reduces the circulating supply.
In terms of attack, expense appears, at least in this example, to be proportional to the malicious intent. The upside of the vote would have to sufficiently benefit an attacker — and on a vote like this, there is simply no reason to believe that it would, particularly as the winning pot of 10% will be distributed randomly and equally to 10 wallets.
Being, we believe, the first to do a vote in this way, we recognize that this is something of an experiment. Please let us know if you enjoyed the process, or if you have any recommendations for future votes.
Now, get voting!
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