Decentraland Scrutinizes Its Vote Power Distribution

TLDR: The Decentraland DAO considers strategies to rebalance voting power and broaden voter participation.

Decentraland describes itself as the “first-ever virtual world owned by its users.” It is a metaverse that puts itself forward as a “public good” in contrast to the many virtual (and IRL) private goods already in existence. As its name and vision would suggest, Decentraland has a DAO, one which has taken several different forms over the years, moving back and forth from off-chain to on-chain governance structures over that period of time for various reasons. In its most recent form, the DAO relies on Snapshot to eliminate gas fees and increase voter participation; but there are concerns about the distribution of voting power — which the proposal at hand hopes to rebalance using several strategies.

The Proposal: Should we address the Voting Power Distribution in the DAO?

The proposal describes a problem not uncommon to DAOs: a handful of wallets have significant voting power due to the number of governance tokens (MANA, NAMES, and LAND in this case) they hold. As the proposal points out, this can lead to several problems, including outsize influence on a vote by one or more of those wallets, the abstention from votes by one or more of those wallets, and the discouraging effect on those who hold little voting power and believe their participation in a vote has no impact.

“This issue can be summarized as a lack of balance in the distribution of voting power, leading to a feeling of disenfranchisement among newcomers and a potential for abuse by large holders.”

To remedy this, the proposer suggests three strategies:

  1. Active contributors: Award voting power to active contributors such as players, creators, organizers, and developers in Decentraland.

  2. Community delegates: Community participants “with good reputations” who consistently contribute to governance can be designated “Community Delegates” and receive delegated voting power.

  3. Limit voting power a single wallet can hold: This would set an upper limit (yet to be determined) on the voting power of any single wallet, thereby avoiding the problems described above.

Should we address the voting power distribution in the DAO?
Should we address the voting power distribution in the DAO?

This proposal is part of a set of other active proposals focusing the community’s attention on voting:

  1. Should DAO proposals have a pre-defined 'Abstain' voting option?

  2. Should the DAO implement a mechanism to delegate VP to multiple wallets?

  3. Should the DAO restrict the ability for members with less than a certain amount of VP to vote on proposals?

There are two types of proposals in Decentraland: binding proposals (which direct certain actions such as adding a catalyst node, adding or removing a Point of Interest, or funding a project), and governance proposals. Governance proposals such as the one under discussion here have three stages:

  • Pre-proposal poll

  • Draft proposal

  • Governance proposal (which can become binding).

As described in Decentraland’s documentation, “voting power” is determined by the MANA (1 VP), NAMES (100 VP), and LAND (2000 VP) connected to a wallet. Pre-proposal polls that meet the 500K+ Voting Power “acceptance threshold” can get promoted to draft proposals, and draft proposals that meet the 1M+ Voting Power acceptance threshold can become governance proposals. Governance proposals have a 6M+ Voting Power acceptance threshold. The outcome of each voting stage is otherwise determined by a simple majority vote.

The DAO currently uses off-chain voting to avoid gas fees; a DAO Committee has control of a multi-sig wallet when on-chain actions are called for as a result of a binding proposal. This committee is overseen by another committee called the Security Advisory Board, “another multisig with trusted key holders” who were elected by the DAO. Decentraland maintains its own governance site with documentation, data, and mechanisms to sort proposals and proposers. Proposals are discussed in the Decentraland forum.

The Big Picture

Managing a decentralized metaverse is hard. Designing a DAO and its governance system, to begin with, is hard enough; ensuring that governance participation remains inclusive, equitable, and vigorous over time is extremely challenging, as we’ve seen across the DAO landscape. Decentraland’s current governance process has seen over 1500 proposals put forward since inception, and has 16 proposals currently active; it appears to have a very engaged — and busy — community.

But if governance is in fact overly influenced by the participation (or non-participation) of whales, then the continuing development of Decentraland’s metaverse can easily gravitate towards centralizing forces — contrary to its own vision. This proposal seeks to address this concern, and has prompted important follow-up questions from the community, namely: who decides who gets awarded voting power? Does the “awarder” in effect become another centralizing force, or are there ways to put the community in charge of awarding?

We’ll be tracking this proposal activity closely at Boardroom. Follow our newsletter to stay up to date. If you’re a voter in a protocol, make sure to check out Boardroom Portal.


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