Blockchain-based voting has long been looked at as a use case for the technology – but as with any nascent application, there are bumps along the way.
In more recent times, the use of on-chain votes has been positioned as a way to avoid acrimonious debates over governance and, in more extreme, cases, network splits like those seen in the bitcoin and ethereum ecosystems the past few years. The idea is that token-holders, by right of their ownership, have a say in the fortunes of a particular network’s technological progress.
Already, decentralized applications (dapps) including MakerDAO and Aragon, along with entire blockchain networks such as Tezos and Cosmos, have already completed multiple rounds of token holder voting enabling key protocol-level changes for their respective projects.
“The market is becoming more mature, and both voting and its discussion are an important step towards the decentralization that is constantly brought up,” affirmed Chief Product Owner of staking service platform Everstake Alexandr Kerya to CoinDesk. “The ability to vote and influence the project’s development is itself a strong advantage.”
At the same time, common concerns such as low voter turnout and “whale” voting – in which one large token holder effectively decides the outcome of a vote – have caused internal governance disputes about the true efficacy of on-chain governance.
Santi Siri, the founder of non-profit Democracy Earth, which created an ethereum-based governance token called Sovereign, argued that “the fundamental problem of blockchain voting today or blockchain governance today is that 100 percent of it is plutocratic.”
Siri told CoinDesk:
“It’s based on whoever has the largest amount of tokens or the largest economic weight. … [Token] holders don’t have any weight at all in the decision-making. The voting is pretty much irrelevant if a single whale can decide the outcome of an election.”