The Future of Governance Mining: Incentivizing Quality Proposals

Governance is a capital game, not a meritocracy. Whales can split funds into thousands of addresses to dominate votes, drowning out genuine community sentiment and leading to suboptimal outcomes.

• Vote Delegation is gamed by $100M+ DAOs.
• Snapshot votes lack on-chain enforcement, creating a trust gap.
• Low-cost chains like Polygon or Arbitrum enable cheap sybil creation.

Shift from pure token-weighting to a reputation graph. Users earn non-transferable reputation points for past proposal quality, successful execution, and peer endorsements.

• Retroactive Funding models (like Optimism's RPGF) reward past contributions.
• Conviction Voting (used by 1Hive) requires locking tokens over time, signaling stronger belief.
• Futarchy uses prediction markets to decide proposals based on expected token price impact.

Anyone can submit a proposal, leading to spam, poorly researched ideas, and wasted core contributor time. There's no cost for failure or mechanism to surface the best ideas.

• Governance forums are flooded with low-effort posts.
• On-chain execution risk is high for untested code.
• Voter apathy stems from information overload and low trust in proposals.

Require a bond to submit a proposal, refunded only if the proposal passes a preliminary community sentiment check or achieves a minimum vote threshold. This creates a skin-in-the-game filter.

• Aragon's Govern uses proposal deposits to prevent spam.
• Idea Squads (pioneered by Gitcoin) allow teams to collaborate and refine proposals before an on-chain vote.
• Kleros' Courts can be used for decentralized arbitration of proposal disputes.

Most token holders don't vote because there's no direct reward for good decisions or penalty for apathy. This leads to low quorums and governance capture by a small, motivated (often self-interested) group.

• Delegation often defaults to VC-backed entities or foundations.
• Vote selling on platforms like Paladin Protocol commoditizes governance power.
• Airdrop farmers vote randomly to appear active.

Tie governance participation rewards to long-term protocol health metrics, not just voting. Reward voters whose choices correlate with positive outcomes like TVL growth, fee generation, or user adoption.

• Meta-governance tokens (like Convex's vlCVX) aggregate voting power and direct incentives.
• Gauntlet's and Chaos Labs' risk simulators could provide data for reward calculations.
• Mechanism is key: rewards must be clawback-able if a vote leads to a catastrophic bug or exploit.

Pure token-voting for proposal rewards creates a Sybil attack where users split stake to farm rewards with low-effort proposals. The solution is a reputation-based curation layer that burns or locks tokens used for spam, creating a non-transferable cost for bad actors.

• Permanent Reputation Burn: Low-quality proposals result in a non-refundable stake penalty.
• Curation Markets: Delegates earn fees by staking reputation to surface high-signal proposals, akin to Karma or Boardroom.

Automated reward distribution requires an objective measure of proposal 'quality,' which is inherently subjective. Relying on vote outcomes creates a circular logic where farmers vote for each other. The fix is a multi-verifier game inspired by Optimism's AttestationStation or UMA's optimistic oracle.

• Challenge Periods & Bonds: Any proposal can be challenged, with slashing for fraudulent quality claims.
• Delegated Expert Panels: Reputable entities (e.g., L2BEAT, ChainSecurity) provide signed attestations for a fee.

Protocols like Curve and Uniswap face governance fatigue from competing incentive programs. High-reward mining pools drain community attention from core protocol upgrades. The counter-strategy is epoch-based focus and topic-specific mining, directing rewards to strategic roadmap items.

• Themed Epochs: Rewards are only available for proposals in a pre-defined category (e.g., "Cross-Chain Liquidity").
• Attention Scoring: Proposal rewards are weighted by the historical engagement of the voters who support it, penalizing farmer blocs.

The original MolochDAO model uses non-transferable, stake-weighted voice credits that are burned on use. This directly attacks the capital efficiency of governance mining by making reward farming a net-negative activity unless the proposal creates genuine value for the miner's remaining stake.

• Burned on Vote: Each vote consumes a non-replenishable credit, forcing prioritization.
• Exit-Right Enforcement: Members can ragequit if poor proposals pass, creating a direct financial feedback loop. This model is foundational for Public Goods DAOs like Gitcoin.