How, why and on what issues votes are held in the crypto industry. We talk about the main management model of decentralized systems
Crypto projects communities have a huge impact on the direction of their development and key decisions. This is an important feature of the blockchain industry. Ecosystem decentralization as the ideological basis of many solutions in the sector implies not only a technical component in the form of distributed accounting and storage of transaction data on multiple servers, but is also often understood in the form of decision-making mechanisms by all community members.
The most common way of expressing the will of the community is the voting of token holders. A characteristic feature of this process is that users who hold more tokens in their wallets, as a rule, receive more votes. This function of tokens is one of the answers to the frequent reproach about the similarity of blockchain assets with wrappers – at least some “crypto wrappers” allow users to vote, which, if the project is successful, can be of separate value.
Pancakeswap (CAKE) is a possible future of the platform
The strength of the user vote on the Pancakeswap platform within each individual vote is determined by calculating the sum of the user’s CAKE tokens at the time the vote was created. This takes into account all the user’s CAKE: tokens on the wallet balance, tokens staked in Syrup Pools and tokens in the CAKE/BNB liquidity pair. To create their own vote, users will need a voting power of 10 or more, that is, 10 CAKE tokens. Since the required number of CAKEs to create your own vote is not very large, and there are no other restrictions, the section contains a large number of joke-meme and spam polls. Nevertheless, among the many proposals, one can also consider the extremely important expressions of the will of the community, the results of which can also be considered, to some extent, the potential plans of the platform for the future.
The community voted almost unanimously “yes”* on the issue of creating a One stake to earn all hybrid staking pool, which would allow receiving rewards in all currently possible tokens in Syrup Pools at the same time. To achieve a similar result now, you need to manually enable staking for each reward token separately, dividing your CAKE tokens into equal parts.
The proposal to create their own Proof of Stake algorithm blockchain for Pancakeswap Finance was supported by only 1/3 of the votes, while 2/3 of the votes were cast for the early development of support for multiple networks within the existing platform. Recall that at the moment the project only works with the Binance Smart Chain network.
Several times it was raised and each almost unanimously rejected the proposal to extend the validity of Syrup Pools with a proportional decrease in interest per annum. The main argument for such a measure was the assumption that the operation of large pools with the rewards desired by many users for too short a time may lead to sharp drops in the price of the CAKE token shortly before and immediately after the shutdown of popular pools.
Decentraland (MANA) – at the height of the day
Members of the Decentraland metaverse community vote a lot and often. For this reason, the community page has several sections. The votes are counted according to a special Voting Power (VP) formula, which gives users with a large number of tokens a large VP. In addition to applications for funding various initiatives and decisions regarding community development, familiar to many ecosystems, MANA has important sections on the issue of blocking usernames in the metaverse, as well as a register of officially approved clothing items for avatars.
Decentraland’s experience regarding the blocking of some usernames in the metaverse shows the peculiarity of the new paradigm aimed at decentralizing the decision-making process. Instead of blocking all inappropriate names at once (mostly related to misleading words, politics or violence and pornography), the community votes separately for each name. The results of such voting are always interesting and unpredictable.
WAVES (WX, gWX) – difficult verification of tokens
On the way to increase the number of uses of the waves exchange token, a voting feature was recently activated for token holders who wished to enable the staking feature for their WX tokens.
After enabling this feature, users will receive gWX tokens depending on the number of WX tokens and the freeze time. You can freeze WX as much as possible for up to 4 years, while obtaining the largest possible amount of gWX. As soon as gWX tokens are on the account, users have the opportunity to participate in voting on giving official status to tokens of new projects.
The Waves decentralized exchange immediately by default and free of charge allows you to trade all newly created project tokens in any pairs available on the exchange. However, officially verified tokens have a number of significant technical and image advantages: tokens can participate in the creation of liquidity pools, receive a “confirmed” marker and a tick in spot pairs, can use bot market making, and are also taken into account when displaying the total value of a user’s portfolio in the “wallet” tab.
In order for the vote for the verification of a new token to be successful, two conditions must be met: to reach a quorum of 500,000 gWX in the amount of those participating in the vote and, of course, to achieve a majority of votes “for”. Winning the vote and verifying your token is not easy at all, at the time of writing, out of dozens of projects trying to get official status, only four tokens with clearly understandable functionality in the field of liquid staking were able to succeed.
The goal is already visible, but there is a long way ahead
Despite the credible desire of the crypto space to involve as many community members as possible in decision making, the current stage of implementation of this development vector raises many questions. First of all, the frequent discrepancy between the number of voted users and the total voting power (VP) collected by them, which depends on the number of tokens on the accounts of the voted users, catches the eye.
If the power of a vote is determined solely by the number of tokens, then only a few accounts with a relatively large number of tokens can easily “pull” any vote in their favor even from thousands of users with a small number of tokens on their balances. Taking this fact into account, it can be said that the current formulas for determining the strength of a vote are probably still far from optimal and will undergo many changes in the future.
The sad fact is that despite tens and hundreds of thousands of active users of blockchain projects, only a small number of enthusiasts take part in voting, calling into question the representativeness of such management models.
The topic of interactions of development teams with the results of the will of community members and their own participation in voting is also seen as little studied, complex and interesting for research.
Despite the above doubts about the effectiveness of the current decentralized mechanisms for managing crypto-communities, it is worth recognizing the fact that the development of such systems is certainly valuable, at least because of its innovativeness, because throughout its history, mankind, with the exception of short periods of time and certain subcultural phenomena , used and improved in most areas only centralized management models.