Responding to Christopher Conforti (Re: DAO organization on Discourse, BBS, and related posts)

  • Rewarding voters via reward “streams”; basically, a vote is placed, and the voter receives a month-duration stream rewarding them for their participation. This encourages consistent participation, as more votes = more streams = more income, but if the voter abstains for too long all of their streams will run out, tapering off their income until it eventually ceases.

I want to point out that such rewards streams are inherently insecure, as the participation reward is independent of the consequences. Under such a system users are incentivised to create as many proposals as possible and vote on as much stuff as they can, even if it is completely irrelevant. For example, imagine that I want to maintain my revenue stream for as long as possible. Every week, I might post a new proposal to change the swap fee on the ETH pool by a small amount, and then change it back with the next proposal. It is very easy to disguise ultimately meaningless proposals as well-intentioned, or even important, and will congest the governance process.

Almost all governance incentives, both for proposal creation and voter participation, end in superfluous activity. We see this in the real world, too. If you have ever wondered why middle management is bloated, or why so much red tape exists between any two points, it’s because someone is trying to justify their salary by introducing policy even where there is no need for it.

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