Quadratic Voting vs Conviction Voting

Cost scales quadratically with votes: A voter with 10x the capital only gets √10x (~3x) the voting power. This strongly dilutes the influence of large token holders (whales). It's ideal for public goods funding (e.g., Gitcoin Grants) and community-driven treasuries where preventing plutocracy is paramount.

Requires identity verification (e.g., BrightID, Proof of Humanity) to prevent Sybil attacks where one entity creates many fake identities. This adds friction, reduces anonymity, and creates a centralization point. It's a poor fit for permissionless, pseudonymous DAOs or high-frequency governance decisions.

Voting power accrues over time as tokens are staked on a proposal. This creates a "temperature check" of continuous sentiment, allowing proposals to gain support organically without hard deadlines. It's optimal for ongoing budget allocations (e.g., MolochDAO, Commons Stack) and prioritizing backlog items where urgency varies.

Decisions have a built-in time delay as conviction builds, making it unsuitable for time-sensitive votes. Capital is locked and non-transferable while staked, creating a high opportunity cost for voters. It's a weak choice for rapid protocol upgrades, security emergencies, or traders needing liquidity.

Dilutes whale power: Voting cost scales quadratically (cost = credits²). A voter with 10 credits pays 100x more than 10 voters with 1 credit each. This matters for public goods funding (e.g., Gitcoin Grants) and community treasuries where preventing plutocracy is critical.

Low barrier for small stakeholders: Participants can express strong preferences on multiple proposals without locking large amounts of capital. This matters for high-participation DAOs (e.g., Optimism Collective) seeking broad, sentiment-based signaling on many concurrent issues.

Vulnerable to collusion & sybil attacks: While it resists simple wealth dominance, sophisticated actors can split funds across identities. Requires robust identity verification (e.g., BrightID, Proof of Humanity). Implementation is also mathematically complex for voters to intuit.

Time-weighted preferences: Voting power accrues the longer tokens are committed to a proposal. This matters for protocol parameter changes and grant allocations where sustained conviction (e.g., in Commons Stack, 1Hive) is more valuable than snapshot sentiment.

Continuous funding without proposals: Projects can set up "funding pots" where tokens flow automatically based on accumulating conviction. This matters for ecosystem funds and retroactive funding models, reducing governance overhead for recurring decisions.

High opportunity cost: Tokens are locked and illiquid while voting, creating a drag on capital efficiency. This matters for liquid governance tokens (e.g., on Aave, Compound) where users are reluctant to forfeit yield or trading flexibility for long periods.

Decisive, time-bound outcomes: Votes are tallied at a specific block or timestamp, providing a clear mandate. This matters for protocol parameter updates or treasury disbursements that require a definitive go/no-go decision, as seen in Uniswap and Compound governance.

High gas overhead for voters: Calculating and paying the quadratic cost on-chain is expensive. This matters for frequent, small decisions where voter turnout is critical. Requires robust identity/credit systems (like BrightID, Proof of Humanity) to prevent collusion, adding implementation complexity.

Built-in proposal filtering: The time-cost of shifting conviction acts as a spam deterrent. Only proposals that attract and maintain significant, growing support pass the threshold. This matters for high-throughput DAOs that need to surface consensus organically without manual curation.

No fixed execution timeline: Passage depends on accumulating sufficient conviction, which can be slow for urgent matters. This matters for crisis response or time-sensitive arbitrage opportunities. The model can also be gamed by late-stage, high-capital swings once a proposal nears its threshold.