Give All $VVV Holders Governance Rights

The issue with DAO’s is it introduces conflict of interest and inherent risk with regards to large stake holders dominating any proposal vote. There is no sybil proof systems in crypto, so what you generally see in most DAO’s is a small minority of voters with large holdings end up controlling the outcome. I’ve worked with DAO’s for many years, and whilst it may seem community centric on the surface, the reality is quite different.

Here are some common problems with DAO’s;

1. There is large gaps of expertise and knowledge within communities to adequately understand technical proposals and their secondary effects. This often leads to ‘experimental’ policies that can cripple a project.

2. Fragmented direction and vision — few consider the implications of properly aligning incentives and brand consistency. Thing drift towards “the everything project” and focus and development resources become divided, often with alot of waste being realized.

3. Large stake holders will try to shove through exploitative proposals that give themselves a better financial gain at the expense of broader community consensus. This is inherent with all DAO’s that govern fiscal policy — because the nature of governance is essentially ‘pay-to-play’ with 1 vote = 1 token.

4. Typically creates too much friction — long cumbersome debates over near trivial changes. Overt speculation rather than data driven ideation. You end up with too many people with very little or no experience putting forth ideas that can have major unintended consequences. Alot of “what if we try this” — which may appeal to a large cohort of laymen, but ultimately discourages investors because they don’t want to adopt the risk of inexperienced people potentially derailing sensible progress just to entertain their sense of wonder.

5. Decentralization for the sake of decentralization is nonsensical. You get greater efficiency with a centralized team of experts working together as a team. Opposed to, a community of ego’s trying to defend their ideas with opinions over experience. Things take a great deal longer to roll out because the process of debating for consensus is often lengthy and exhaustive.

6. It actually discourages broader participation, as smaller holders find their input and engage becomes irrelevant compared to a handful of whales. Essentially it becomes more about making an appeal to larger holders and trying to appease them otherwise they will vote down anything that does not give them greater benefit. The net result, is a different form of centralization, one that is not reliable compared to a dedicated team.

7. Voter apathy — not everyone has the time or willingness to read through all proposals, evaluate them, and participate frequently in votes. This leads to delegation voting, which further leads to friction of ideas between well supported delegates and team. Many have idealistic visions that are not realistic, some many know how to design good incentive models but lack the knowledge of balancing budgets and development costs. Overall it is a sub-par result for delivery, practicality, and efficiency.

8. DAO’s are not well favored for investors due to the risks and lack of accountability and recourse involved. If Telsa, Nvidia or any serious company opened their business planning and decision making up to democratic vote — they would dump to oblivion the next day. Investors want the confidence of knowing that the right people are at the helm and in control of the project.

9. You introduce ‘vote buying’ that opens up potential for governance attacks with malicious proposals — especially if you have on-chain execution like Tally.

10. Creates roadblocks for business development and expanding partnerships — you need points of contact, and even if you have these with delegates, it still limits and hinders what can be negotiated without seeking ‘consensus’ first.

You could present it as a ‘limited-dao’, but then the question arises as to why do this at all? I would much prefer the dedicated team to continue having full control, as they’re in full knowledge of all the moving parts of the project and what is viable or not. Much of ideals for a DAO stem from a political fervor and expectation of democratic values — but this has never worked well before in its original conception, because 1 token = 1 vote is not Democratic at all — it is a Plutocracy.