I think we can understand the issue better by treating voting as currently being disincentivized. Since voting costs gas, the balance sheet for individual Bancor holders is improved by refusing to vote. Sure, you could argue that participation is incentivized by keeping the protocol healthy; however, I am dubious that this provides enough drive to motivate 99% of humans do stuff, especially if it costs money to act. Drawing inspirationg from other DAOs, I think I have an idea for Bancor.
Incentivizing the vote with rewards is a good idea. The KyberDAO was built with such a policy in mind. Unfortunately, high gas fees have soured the experience for many KNC holders, as voting gas expenses are generally higher than the protocol rewards (break even around ~$10,000 KNC, depending on gas prices). This is a big problem from an economic perspective. It means that the total cost of running the DAO is greater than the revenue generated for the majority of users. Not a good business model.
Kyber does offer a way around this. The KyberDAO allows users to delegate their votes. The delegation costs gas once, and then after that the delegated address votes on their behalf. This is nice in theory, but there has been a consipicuous lack of information on whom can be delegated to, and how rewards are distributed. There a few trusted delegation options, but let’s say the area is still opaque at the time of writing.
The AAVE system
At the liquidity2020 conference, Stani Kulechov presented some information on the future of the AaveDAO. Interestingly, it looks like their voting system will be signatures-only. Kulechov said that this system alleviates the gas dependence of the DAO, at will make it easier for users to be involved in governance. I like this a lot, because it removes the disincentive. As long as voting is nearly free, I think participation will persist at sustainable levels.
Best of both worlds
What if Bancor combined signature-only voting with vote delegation? Normal users can participate in voting should they choose, while allowing others to nominate a representative to vote on their behalf. There are good reasons why a person may choose to delegate. For example, they may be too busy to educate themselves on all issues related to governance. The delegates would liekly be motivated on their own, driven by the potential success of Bancor in the long term. With a system like this, the protocol can keep every penny inside the protocol where they do the best work (rather than bleeding voting rewards). Moreover, DAO participation has every reason to thrive, as it will cost little-to-nothing to act on your own, or to delgate to someone else.
Just a thought.