Many questions arise when it comes to decentralizing a project, and the most important thing is to define what the voting system for proposals and changes within the DAO will be. We often see the number of tokens being counted as the number of votes, that is, a 1:1 ratio of token to vote. However, this very common method guarantees excessive power for holders of very large amounts of tokens, making small holders have no relevance whatsoever. Thus, the quadratic voting system emerges to solve this type of problem, ensuring a better distribution of votes. Come and find out more about this voting system and its implementation difficulties.
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[ENGLISH VERSION]
Quadratic Voting System
The Quadratic Voting system makes the amount of Stake required be the square of the number of votes it represents, that is, it would be a formula of the following type: Stake Cost = (Number of Votes)², following the example in the table above. This system means that in order for a person to have an additional vote, they need to square the number of votes in tokens, making the weight of small holders greater, but maintaining a greater weight in the votes for those with a high stake, since they would still have more weight in the votes, but in a smaller proportion than in a 1:1 system.
This voting system aims to prevent a user with a high amount of Tokens from being able to dominate any proposal that is being voted on in a DAO, since in systems that work on the ratio 1 Token in Stake or Liquid = 1 Vote, it causes a minority at the top, which holds the majority of the Supply of tokens, to be able to decide the future of the project, removing any participation from users with less voting power. Furthermore, the problem becomes worse if this small group ends up having very similar ideas and agreeing with each other, without any of them disagreeing with the path being taken. The problem is that the minority or any holder who ends up diverging from the top holders would end up being seen as an opponent as well. Thus, this new voting system through quadratic voting aims to provide greater equality among participants while maintaining relevance and the benefits of having a high HBR Stake in voting, since the largest holders will still have greater weight. However, as no system is perfect, this one also has a flaw, which is its vulnerability to sybil attacks. ---
Challenges of the Quadratic Voting System
The problem with this quadratic voting system for DAO is that it is susceptible to a Sybil Attack. This attack occurs when someone creates multiple accounts with a minimum Stake of 1 Token to have the highest cost-benefit in relation to Token Stake x Votes, dominating the votes with the lowest possible cost, since they divided their Stake between multiple accounts and increased their voting power since they got the best Token:Vote ratio. With this in mind, there are several forms of protection, but one that seems simple to implement and that can keep the system safe is the Economic Cost, stipulating a minimum amount of tokens for the vote to start being valid. This defense is intended to make it difficult to stake tokens in several accounts at the same time, since the user would have to buy a huge amount of tokens to distribute this minimum amount among several accounts, which generally makes the operation unfeasible.
The idea is that it should be a value that is not difficult for an active user of the project to reach, but that is at the same time difficult for many accounts to reach easily. This balance is difficult to achieve and perhaps the solution would be a formula that adapts the minimum amount of tokens as the number of users increases or according to the supply of tokens, to prevent the amount from becoming too easy to obtain. The idea is that it should not be an easy amount to obtain, but also not impossible to prevent this type of attack. In addition, there are several other forms of defense that can be used in conjunction with this Economic Cost to make this system more secure.
