DAOs need to start social experiments in private voting, a fundamental primitive that is lacking in current DAO practice.

Written by Shumo

Compiled by: 0x11, Foresight News

The DAO is a new governance structure that cryptocurrency brought to the world, designed to bring more autonomy to the way individuals and teams coordinate and organize. Like many new things brought about by cryptocurrency, The DAO brought a lot of chaos, the most famous of which was The DAO hack, which led to the first hard fork of Ethereum. Although cryptocurrency is new and not perfect, The DAO built on it still exists and has survived. On the practical side, the DAO treasury holds assets worth billions of dollars; on the philosophical side, many deep thinkers have begun to study the far-reaching implications of The DAO (I recommend the latest article in Stanford Blockchain Review).

To this day, DAO governance practices are almost exclusively based on token-based voting schemes. In a typical DAO, members hold some kind of governance token to represent voting rights. DAO decisions related to the treasury are typically decided by on-chain voting, such as simple majority, quadratic voting, or some kind of dynamic threshold scheme. Due to technical limitations, all fully on-chain DAO governance is currently open and transparent.

With the popularity of zkSNARKs, on-chain private voting for DAO governance has become possible. Recently, one of the best-run cc0 NFT DAOs (Nouns DAO) began exploring the introduction of private voting in its governance practices. 0xDigitalOil wrote an article explaining why private voting is important to Nouners. Although his subsequent proposal was passed, it was still controversial. First, the voting participation rate (>40%, compared to 30% under normal circumstances). Second, although the proposal was passed, there were still a large number of dissenting votes. It is worth noting that the Nouns founding team voted against the proposal due to concerns that private voting might have a negative impact on Nouns culture.

This raises an interesting question: should DAOs adopt private voting schemes, assuming the technology is ready?

Arguments for Private Voting

If we use a philosophical analogy, a DAO is a civil society. Private voting, then, is an important guardrail for free speech, a constitutional right written into one of the most successful “DAOs” — the United States of America. I don’t think readers of this article need to question the value of free speech. In a DAO, voting is the ultimate form of expression.

From a practical perspective, as 0xDigitalOil articulated in his Nouns forum post, there is evidence that vote swapping is widespread. Many times, DAO members don’t necessarily vote for what they think is best. They may worry that their vote will affect their image; they may worry that their downvote will hurt their chances of getting a future proposal passed. Real-life voter retaliation can be a problem, and this is even more true in DeFi-related DAOs.

Arguments against private voting

Philosophically, using the civil society analogy again, private voting removes voter accountability. Public and transparent voting records could be an important source of a robust social layer for DAO reputation systems. Similar designs can be seen in democratic political systems: the voting records of the US Senate and House of Representatives are completely public.

Since the DAO's privacy voting system is not yet in use, I cannot foresee possible negative effects. But it is conceivable that trading votes and bribes could become a problem due to the lack of accountability. Although there are thinkers like Peter Thiel who believe that private transactions and horse trading are the "lubricant" of a democratic society. I personally may not agree with this. The current voting scheme even has the problem of opacity because the voting is decentralized among different addresses.

The Future of Private Voting in DAO Governance

In this article, my goal is not to blindly promote the private voting plan. However, we do need to start social experiments on private voting, which is a basic primitive currently lacking in DAO practice. So there are several directions for private voting practice:

  • Hybrid solution: Similar to US Senate/House and Presidential elections, retaining accountability mechanisms for prestigious members and providing privacy mechanisms for the public.

  • Optional: Voters can choose to be public or private. Although one possible problem is that choosing not to be public could itself be a signal.

Let this great social experiment begin!