Digital Commons

A governance model where voting power is proportional to the quantity of a governance token held. This is the most common model in Decentralized Autonomous Organizations (DAOs).

• Mechanism: 1 token typically equals 1 vote.
• Examples: Uniswap (UNI), Aave (AAVE), Maker (MKR).
• Consideration: Can lead to plutocracy, where large token holders ("whales") dominate decisions.

A system designed to reduce the power of large stakeholders by making the cost of additional votes increase quadratically. It aims to measure the intensity of voter preference.

• Mechanism: A voter allocates a budget of "voice credits" to proposals. The cost to cast n votes for a proposal is n² credits.
• Purpose: Allows many community members with moderate support to outweigh a single whale.
• Adoption: Used by Gitcoin Grants for public goods funding.

A continuous voting model where voting power accrues over time as a token holder's funds remain staked on a proposal, signaling growing "conviction."

• Mechanism: Users stake tokens on proposals. The longer the stake remains, the more voting weight it accumulates until a funding threshold is met.
• Advantage: Allows for emergent prioritization without fixed voting periods and reduces proposal spam.
• Use Case: Commonly used for allocating funds from a DAO treasury in platforms like Commons Stack.

A governance model proposed by economist Robin Hanson, where markets are used to make decisions. Voters bet on the outcome of proposed policies to determine which should be implemented.

• Mechanism: 1. Vote on a metric for success (e.g., token price). 2. Create prediction markets for whether a proposal will improve that metric. 3. Implement the proposal with the most favorable market odds.
• Goal: To harness the wisdom of crowds and market efficiency for decision-making.
• Blockchain Example: Early experiments by Augur and Gnosis.

A model where a limited, often elected or appointed, group of signers holds executive power. Decisions require a predefined threshold of signatures (e.g., 5-of-9).

• Mechanism: Used for treasury management and protocol upgrades. Can be a standalone model or a "security council" layer within a broader DAO.
• Trade-off: Balances security and agility but is less decentralized than pure token voting.
• Examples: Early Ethereum Foundation multisigs, Optimism's Security Council.

A hybrid model where token holders can either vote directly on proposals or delegate their voting power to a representative or "delegate" who votes on their behalf.

• Mechanism: Delegation is fluid; power can be revoked or re-delegated at any time.
• Advantage: Increases participation by allowing less active members to delegate to informed experts.
• Prominent Example: Compound Finance's governance, where delegates campaign and publish voting platforms.

A DAO is a core governance structure for managing a Digital Commons. It is a member-owned organization with no central leadership, where rules are encoded as smart contracts on a blockchain. Key functions include:

• Proposal and voting on treasury use, protocol upgrades, and resource allocation.
• Transparent execution where approved actions are carried out automatically.
• Examples include Uniswap DAO governing its protocol treasury and ConstitutionDAO formed for a collective purchase.

A Public Good is a type of resource that is non-excludable and non-rivalrous, meaning no one can be prevented from using it, and one person's use does not reduce availability for others. In web3, these are often open-source software, protocols, or infrastructure.

• The challenge is sustainable funding, as traditional markets underproduce them.
• Digital Commons often form specifically to fund and maintain public goods, using mechanisms like retroactive funding (e.g., Gitcoin Grants) and protocol-owned treasuries.

This is the collaborative economic model underpinning many Digital Commons. It describes large-scale cooperation where contributors participate voluntarily to create shared value, coordinated through the internet rather than markets or managerial hierarchies.

• Wikipedia is a classic non-blockchain example.
• In crypto, open-source development of protocols like Ethereum or Bitcoin exemplifies this model, where contributors are often incentivized by token ownership and governance rights rather than direct salaries.

A classic economic theory predicting the overuse and depletion of a shared resource when individuals act in their own self-interest. Digital Commons use cryptographic and economic mechanisms to prevent this tragedy.

• Solutions include clearly defined property rights (via tokens), automated rules for contribution and extraction (smart contracts), and community-managed penalties or incentives.
• This contrasts with unmanaged common-pool resources, demonstrating how blockchain adds enforceability to communal agreements.

A TCR is a decentralized list or registry, curated by token holders, that can serve as a foundational tool for a Digital Commons. It uses token-based voting to add, remove, or rank entries.

• Applications include whitelists for reputable service providers, registries of verified content, or lists of approved public goods projects eligible for funding.
• It embodies a decentralized curation mechanism, distributing trust and editorial control across the token-holding community rather than a central authority.

A democratic capital allocation mechanism increasingly used by Digital Commons to fund public goods. It matches individual contributions with funds from a central matching pool, where the matching amount is based on the square of the sum of the square roots of contributions.

• This mathematically prioritizes projects with broad community support over those with a few large donors.
• Gitcoin Grants is the most prominent implementation, using quadratic funding to distribute millions in matching funds to open-source software and community projects.

A critical counterpoint to successful commons, this concept describes the economic problem where individuals acting in their own self-interest deplete a shared resource, leading to its ruin. Garrett Hardin's 1968 essay argued that open-access resources are doomed to overuse. Digital commons projects explicitly design cryptoeconomic incentives and governance rules—like staking, slashing, and quadratic voting—to prevent this tragedy by aligning individual rewards with the long-term health of the shared network or protocol.

A core challenge for digital commons is funding non-excludable, non-rivalrous resources that benefit all but are underproduced by the market. Solutions include:

• Retroactive Public Goods Funding (RPGF): Projects like Optimism's Citizen House reward builders for work that has already proven valuable to the ecosystem.
• Quadratic Funding: A matching fund mechanism (pioneered by Gitcoin) that amplifies small donations, democratizing funding allocation.
• Protocol Treasuries: DAOs use their native token treasuries to grant funds for development, research, and community initiatives.

Digital commons are not theoretical. Prominent implementations include:

• Ethereum: The base layer protocol is a global commons for computation, maintained by a decentralized network of nodes and developers.
• Uniswap Protocol: Its code is open-source and governed by a DAO (UNI token holders), making the liquidity infrastructure a commons.
• Wikipedia: A classic non-blockchain digital commons, governed by the Wikimedia Foundation and community editors.
• Gitcoin: A platform and community funding public goods in the Web3 ecosystem through quadratic funding rounds.