✅ Master Token-Based Governance
Understand token weighting, whale dynamics, and alternative systems
Understand how voting power is calculated
Your Progress
0 / 5 completed🎯 Key Takeaways: Token-Weighted Voting
You've explored how token weighting shapes DAO power structures. From simple linear systems (plutocracy) to quadratic alternatives (more balanced) to conviction voting (time-weighted), each approach makes different trade-offs between fairness, simplicity, and security. Let's consolidate the key lessons.
Linear Token Weighting
- •One token = one vote. Simplest implementation, most common in DAOs (90%+ use this)
- •Creates plutocracy: wealth = power. Top 10 holders often control 30-50% of votes
- •Strong Sybil resistance and economic alignment but concentrates power
Governance Attacks
- •Attack cost = 51% of tokens × price. Feasible if liquidity > 50% and price is low
- •Beanstalk lost $182M to flash loan attack in 2022—governance can be exploited
- •Defenses: timelocks, quorums, guardian multisigs, vote-escrowed tokens
Quadratic Voting
- •Votes = √tokens. Someone with 100x more tokens gets only 10x more votes
- •Reduces whale dominance significantly while maintaining some Sybil resistance
- •Gitcoin funded $50M+ using quadratic funding—proves it works at scale
Conviction Voting
- •Voting power grows with commitment time. Hold 30 days > vote last minute
- •Aligns long-term holders, prevents mercenary voting (buy-vote-dump)
- •Used by 1Hive and Commons Stack. Slower but more thoughtful decisions
🌍 Real-World Lessons
Marketed as community DAO but a16z + team control 40%+ of votes. $20M Ed Fund controversy showed whales overrule community sentiment.
Founder/VC 52% supermajority enables fast decisions but creates single point of failure. Works if founders are benevolent.
Quadratic funding distributed $50M+ to public goods. Funded projects whales would ignore. Proves alternatives work for specific use cases.
🎓 Master Insight
Token-weighted voting reflects a fundamental tension: do you optimize for security or fairness? Linear weighting chooses security (Sybil-resistant, economically aligned) at the cost of fairness (plutocracy). Quadratic and conviction systems improve fairness but add complexity and new attack vectors. There's no perfect solution—only context-appropriate trade-offs. Protocol governance works fine with linear (efficiency matters more than democracy). Treasury allocation benefits from quadratic (fairness matters). The future likely involves layered governance: different systems for different decisions. Most DAOs haven't figured this out yet—they use one-size-fits-all token voting. The winners will be those who match tools to contexts. Governance is still being invented in real-time.