Poison or Cure? Private Voting in DAO Governance
DAO is the new governance structure that crypto brings to the world. It aims to bring more autonomy to how people coordinate and organize, for both individuals and the organizations. Like many new things crypto brings, DAOs bring many chaotics, perhaps the most famous one the the DAO hack, which causes the first hard fork of Ethereum [1]. At the same time, despite being new and imperfect, the DAOs formed in crypto are living and breathing now. On the practical side, DAOs hold billions of dollars worth of assets in their treasury. On the philosophical side, many deep thinkers started to study the profound impact of DAOs, my recommendation would be the latest article from Stanford Blockchain Review [2].
Till today, DAOs governance practice is almost all based on a token based voting scheme. In a typical DAO, members hold a certain kind of governance token to represent the voting power. And the DAOs decision, usually related to treasury, will be decided on-chain through a voting scheme, like simple majority, quadratic voting, or some dynamic threshold scheme. And due to the technical limitation, so far all the fully on-chain DAO governance is fully public and transparent.
With the proliferation of zkSNARKs, it becomes possible to have private voting on-chain for DAO governance. Recently, one of the most well-run cc0 NFT DAO (Nouns DAO) started the exploration of introducing private voting in its governance practice. 0xDigitalOil wrote a compelling essay [3] on why private voting is important for Nouners. However, despite his subsequent prop [4] gets passed. It is one of the more controversial prop in Nouns. First, the voting turnover is high (>40% compared with the normal 30%). Second, despite the prop getting passed, there is a big number of against votes. What is noteworthy is that Nouns founder group vote (nounders) “against” in this prop for the concern of private voting’s possible negative impact on nouns culture (nouners call this culture “nounish”).
This brought up an interesting question? Assuming the technology is ready, shall a DAO adopt a private voting scheme.
The Arguments For Private Voting
From a philosophical point of view, if you make an analogy that a DAO is a civil society. Then, private voting is an important guard-rail of the freedom of expression, the constitutional right written in one of the most successful “DAO” - the United States of America. I would not assume the readers of this article need to be convinced of the value of the freedom of expression. In a DAO, a vote is the ultimate form of the expression. To make the analogy more clear, there is clearly a reason for the private voting scheme in presidential elections.
From the practical point of view, as 0xDigitalOil articulated in his Nouns forum post, there is evidence that quid pro quo voting is quite common. DAO members many times aren’t necessarily voting for what they believe is best. They could be afraid that their votes could reflect poorly on their image. They could be afraid that their negative votes could hurt the chance that their future prop being passed. Voter retaliation in real life could even be a concern, especially in DeFi related DAOs.
The Arguments Against Private Voting
Philosophically, again using the civil society analogy, private voting removes accountability from the voters. Public and transparent voting records could be a critical source of DAO’s reputation system to build a sound social layer. A similar design could be seen in a democratic political systems as well: US senate and house voting records are fully public.
Since private voting systems for DAOs are not in use yet, I cannot foresee the possible downsides. But one can imagine that because of the lack of accountability, trading vote and bribery could be a concern. While there are thinkers like Peter Thiel consider under table deals and horse tradings are the “lubricant” for democratic society. A point I may not personally agree with. There is even a question about the opaqueness [5] under the current voting schemes due to spreading vote among different addresses.
The Future of Private Voting in DAO Governance
In this piece, my goal is not to blindly promote private voting schemes. However, we do need to start the social experiment of private voting, a fundamental primitive is currently lacking in DAO practice. So a few directions of private voting practice:
Hybrid scheme: analogous to US senate/house and presidential elections, accountability for more prestigious members and privacy for the mass.
Optionality: voters could choose to stay public or private. While a possible issue is, choosing to be private might be a signal itself.
Let this great social experiment begin!
References:
The DAO Hack: https://en.wikipedia.org/wiki/The_DAO_(organization)
Nouns DAO and the Philosophy of Governance:
zkVoting for Nouns DAO: https://discourse.nouns.wtf/t/small-grants-zk-private-voting-for-nouns-dao/3405
Nouns Prop 216: https://nouns.wtf/vote/216
Contentious Uniswap Vote Highlights the Opaqueness of Decentralized Governance: https://www.coindesk.com/tech/2023/02/08/contentious-uniswap-vote-highlights-the-opaqueness-of-decentralized-governance/
