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The author seems to be under the impression that changing from a 4-of-7 multisig to DAO control is not an improvement? > Indeed, as long as a proposal gains mo
by chizhik-pyzhik 5y ago
The author seems to be under the impression that changing from a 4-of-7 multisig to DAO control is not an improvement?
> Indeed, as long as a proposal gains more than 50% of the votes with a 1% quorum, it can execute abitrary code on behalf of the DAO - even such code that will give anyone dictatorial control over it in perpetuity.
Of course this is how it works. The DAO can do whatever it wants, and is controlled by the thousands of users who vote using their tokens. This is a huge improvement over a small multisig!
- yanmaani 5y agoIt may very well be better in relative terms. After all, arsenic is clearly better for your health than strychnine. But neither is especially good, now is it?
- wmf 5y agoThey said the DAO is an improvement, but it looks like the 11 core stakeholders effectively control the DAO. A contentious proposal could probably pass with only 6 votes. Over time those tokens may get spread among more holders.
- numtel 5y agoUntil there's a viable solution to 1-person, 1-vote for DAOs, this is going to be the case everywhere. Detailed in the "Who Watches the Watchmen" paper: https://www.frontiersin.org/articles/10.3389/fbloc.2020.590171/full https://www.frontiersin.org/articles/10.3389/fbloc.2020.5901...
- wmf 5y agoNothing is forcing a DAO to give half the voting shares to insiders.
- yanmaani 5y agoWhy does this need a DAO? Why does someone have to "own" it? They could just have it be run by the smart contract without human intervention.
- serverholic 5y agoI think that's ultimately what everyone wants. However, I think we need more research because once you throw away the keys they're gone forever. This is something that needs time to get right.
- chrisco255 5y agoYou don't ever want one person, one vote. The amount of power someone has in an organization should be proportional to the amount of skin they have in the game.
- yanmaani 5y agoIf I borrow 51% of the outstanding supply, how much skin do I have in the game? What if I buy $100 million worth of ENS, while simultaneously shorting it on DeFi? What if I tell people that if they vote for my proposal, I'll raid the Community Treasury and bribe them with the money I get from that? Do they have skin in the game? And if so, which game?
- chizhik-pyzhik 5y agoIf you try to borrow 51% of the supply, you'll find the cost to borrow goes up the more you get (until you're paying 10,000%+ apr.) If you successfully pass a proposal to raid the treasury, all the $ENS tokens in there would likely crash in value as the market reacts to the news. Those who already have skin-in-the-game (by holding ENS and voting) would likely be worse off overall, so they wouldn't agree. These are great questions! DAOs are essentially a big experiment in game theory and new forms of organization. I think you'd genuinely enjoy Vitalik's discussion about DAOs: https://vitalik.ca/general/2021/03/23/legitimacy.html https://vitalik.ca/general/2021/03/23/legitimacy.html
- yanmaani 5y agoI can flash loan 0.4% of the supply from Uniswap right now. I need 1% for quorum. Is my math off?
- chizhik-pyzhik 5y agoThat certainly is spooky. Perhaps the quorum should be increased. (I imagine it would, if you tried to do something like this.) Either way, there are some barriers. Each vote is subject to a 7-day period, so other delegates have time to react; votes must first reach some level of interest through Snapshot off-chain voting before moving on to the on-chain vote.
- chizhik-pyzhik 5y agoAre you referring to vote delegation? ENS holders 'delegate' their votes towards a person or entity, which then votes on their behalf, and this delegation can be changed at any time if the delegates are malicious. This might not feel as democratic as direct one vote-per-token, but that scheme tends to have much lower turnout (as seen with compound.finance and curve.fi voting).
- wmf 5y agoI'm looking at the pie chart. If 75% of the tokens don't vote and 11 people own ~18% out of the voting 25% then those 11 effectively control the DAO.
- chizhik-pyzhik 5y agoIt looks like the top 11 delegates control around 40% of the vote[1], so nearly effective control. That does seem like a small group, but if a delegate was acting maliciously, I'd expect a number of their holders to change delegation. [1] https://sybil.org/#/delegates/ens https://sybil.org/#/delegates/ens