One Token One Vote (OTOV)

Real-world use has highlighted several critiques of the pure OTOV model:

• Voter Apathy: Low participation rates are common, concentrating power.
• Whale Dominance: Large token holders (whales) can single-handedly sway votes.
• Plutocracy Risk: Decision-making power correlates directly with wealth.
• Gas Costs: On-chain voting can be prohibitively expensive for small holders, reducing inclusivity.

Protocols are experimenting with models that modify or move beyond pure OTOV to address its flaws:

• Conviction Voting: Used by 1Hive, voting power increases the longer a voter commits to a choice.
• Quadratic Voting: Voting power increases with the square root of tokens committed, reducing whale dominance (theoretically).
• Token-Curated Registries (TCRs): Use tokens to curate lists, blending economic stake with voting.
• Futarchy: Proposes using prediction markets to make decisions based on expected value.

One Token One Vote (OTOV) is a governance model where voting power in a decentralized protocol is directly proportional to the quantity of a specific governance token held. It is the most common implementation of token-weighted voting.

• Mechanism: Each token represents one vote. A user with 100 tokens has 100 times the voting power of a user with 1 token.
• Primary Goal: To align governance influence with economic stake in the protocol, under the assumption that large stakeholders are incentivized to act in the network's long-term interest.
• Trade-off: While simple and Sybil-resistant, it often leads to plutocracy, where wealth concentration dictates governance outcomes.

Sybil resistance refers to a system's ability to withstand Sybil attacks, where a single entity creates many fake identities (Sybils) to gain disproportionate influence.

• OTOV as a Defense: By tying voting power to a scarce, costly asset (the token), OTOV imposes a high financial cost on mounting a Sybil attack, as an attacker must acquire a large stake.
• Limitations: Resistance is not absolute. An attacker with sufficient capital can still acquire a controlling stake (51% attack). Mechanisms like vote delegation or quadratic voting are sometimes layered on top to mitigate pure capital dominance.

A key criticism of OTOV is its tendency toward plutocracy (rule by the wealthy), which can conflict with the decentralized ethos of blockchain.

• Concentration of Power: Voting outcomes can be dominated by whales, venture capital funds, or foundation treasuries, potentially marginalizing smaller token holders.
• Voter Apathy: Small holders may perceive their votes as meaningless, leading to low participation and further centralization of active voting power.
• Contrasts: This is often compared to models like one-person-one-vote (used in some DAOs with proof-of-personhood) or quadratic voting, which aim to dilute pure capital-based influence.

Several models aim to address the limitations of pure OTOV by introducing different calculations for voting power.

• Quadratic Voting (QV): Voting power increases with the square root of tokens committed, reducing the power of large holders. Used by Gitcoin Grants.
• Conviction Voting: Voting power increases the longer a voter maintains their stance, rewarding long-term commitment.
• Futarchy: Proposes using prediction markets to decide outcomes based on which proposal is predicted to maximize a specific metric (e.g., token price).
• Delegated Voting: Token holders can delegate their votes to experts or representatives, as seen in Compound and Uniswap.

OTOV is the standard model for major Decentralized Autonomous Organizations (DAOs).

• Uniswap: UNI token holders vote on treasury management, fee switches, and grants.
• Compound: COMP holders govern interest rate models, asset listings, and protocol upgrades.
• MakerDAO: MKR token holders vote on critical risk parameters (collateral types, stability fees) for the DAI stablecoin.
• Aave: AAVE holders govern the lending protocol's configuration and safety module.

These implementations often include timelocks on executed code and governance thresholds (minimum tokens to propose) for added security.

Implementing OTOV governance requires careful design to protect the protocol.

• Proposal & Execution Separation: A timelock between a vote passing and code execution allows for review and emergency intervention.
• Governance Minimization: Reducing the frequency and scope of on-chain votes for critical parameters limits attack surfaces.
• Vote Delegation: Allows less active holders to delegate to knowledgeable parties, improving participation and decision quality.
• Emergency Powers: Protocols like MakerDAO have Emergency Shutdown Modules or Security Councils that can act if governance is compromised.
• Vote Snapshotting: Using a snapshot of token holdings at a specific block prevents last-minute vote buying.

A governance mechanism designed to reduce the influence of large token holders by weighting votes based on the square root of the tokens committed. This aims to reflect the intensity of preference rather than pure capital weight.

• Mechanism: A voter with 100 tokens gets 10 voting power (√100), while a voter with 10,000 tokens gets 100 voting power (√10,000).
• Goal: To mitigate whale dominance and better represent the preferences of a broader, smaller-token-holding community.
• Challenge: Susceptible to Sybil attacks, where an entity splits tokens across many addresses to gain disproportionate influence.

A time-based voting system where a voter's influence increases the longer their tokens are locked in support of a proposal. It is designed for continuous funding decisions rather than simple yes/no polls.

• Mechanism: Voting power accrues over time, like interest, as long as tokens remain staked on a proposal.
• Use Case: Ideal for grant funding or resource allocation in DAO treasuries, allowing community sentiment to build organically.
• Outcome: Prevents snapshot voting swings and encourages long-term, considered support for initiatives.

A decentralized list maintained by token holders who are economically incentivized to curate quality entries. Governance is directly tied to the utility and value of the list itself.

• Process: Token holders stake tokens to challenge or support entries on a registry (e.g., a list of reputable oracles).
• Incentive: Honest curation is rewarded; malicious or lazy behavior results in lost stake.
• Relation to OTOV: Often employs a one-token-one-vote model for the curation challenges, directly linking economic stake to governance outcomes.

A prediction market-enhanced governance model that uses futarchy principles to efficiently surface high-quality proposals. It aims to overcome voter apathy and information asymmetry.

• Mechanism: Delegates can signal belief in a proposal's passage by staking tokens on prediction markets. Strong market signals can fast-track proposals.
• Goal: To identify and pass proposals that increase the DAO's native token value, as judged by the market.
• Contrast: Moves beyond simple token-weighted polling to a more dynamic, signal-aggregating system.

A system where token holders can delegate their voting power to representatives or experts, creating a more efficient and informed governance layer. This is common in Delegated Proof-of-Stake (DPoS) blockchains and many DAOs.

• Mechanism: A voter delegates their OTOV power to a trusted delegate, who votes on their behalf.
• Benefit: Reduces voter fatigue and leverages specialized knowledge, creating a representative democracy model.
• Risk: Can lead to centralization of power among a small group of delegates, reintroducing plutocratic tendencies.

A foundational access control mechanism requiring multiple private keys to authorize a transaction. It is a simpler, non-token-weighted form of decentralized governance for treasury management.

• Mechanism: A transaction requires M-of-N approved signatures from a predefined set of keyholders.
• Contrast with OTOV: Governance is based on permissioned access (keys) rather than token ownership. It is often used for executive or operational functions within a DAO that also uses OTOV for broader community votes.
• Use Case: Securing a DAO's treasury, where a council of 5-of-9 signers must approve large withdrawals.