Comment by SilverBirch | Hacker News Reader

Comment by SilverBirch | Hacker News Reader

One thing I'm fascinated by is understanding the voting system. So as far as I can see the proposal needed to pass a 1% threshold to have quorum. There is a single person with that many votes, in fact there's reason to believe there are probably quite a few people that have that many votes. So they can reach quorum on their own if they want to push something through unilaterally.

Then you go and look at the history, and it's totally opaque who actually has the governance tokens- Apparently it was split 60% for community, 15% for investors, 25% for the engineering team. But you look at Realm (I have no idea how Realm works) and it seems there's only ever been two votes - steal the coins, unsteal the coins (https://realms.today/dao/SLND).

Oh, and it seems totally unclear who the whale is that managed to carry this vote. It seems likely that it's one of the SLND team, since we know they have as many as 25% of the governance tokens and they're the ones who initiated the vote. But why then, did they only vote with 1% not 15%? Well doesn't it seem likely they voted with the exact minimum number of votes they needed to pass the threshold for it to be effective?

Honestly, I just find this wild, it's basically a DAO where 1 user controls the whole thing. If you put a penny in SLND you're basically saying "I totally trust the guys running this, because they can just unilaterally take everything at a moment's notice". It seems perfectly designed for a rug pull.

It gets even more wild when you reakize that most governance isnt actually protected by on-chain verification. Most projects are just running referendums with a small multi-sig that claims they will respect the DAO ruling.

Also interestingly, in both votes for and against, the deciding 1.01% came from the same account: 6HFxH...sf6g4

I admit, that I'm very ignorant how all this stuff works, but the voting seems a tad farcical. Is it just to see if some other DAO whale is for/against it? Because normal users weight is pretty much negligible.

How is 1% a quorum for anything? I assume that’s actual “quorum” meaning 1% need to vote in total even if some vote no.

I think the quorum is set so low because there is a suspicion that a large number of people will buy into these schemes and lose the keys somewhere. They certainly won't be looking at day to day operations of it.

If that were to happen, and the quorum were higher, then no changes could be made.

But that's just an admission that the whole thing is going to be ran by a small unaccountable group that gets to decide everything. Direct Democratic governance can't function without high voter turn-out. If the system is set up assuming low voter turnout, it means the notion of there being democratic governance is a sham to begin with.

A system where the people who don't want to be involved in the day-to-day operations elect representatives to protect their interests would be a more appropriate fit here.

Perhaps think of it more like voting in a public company, where the small shareholders votes basically doesn't matter.

Of course, the large shareholders are all people who created the company, early employees, and early investors in the first place.

So yeah, there's the illusion that votes from all shareholders matter, but if a company required even 30% of shareholders to vote to make changes, nothing will ever get done unless a few holders comprise that 30%

What matters isn't percent of shareholders it's percent of shares voted. I'd find it very unusual if a company only required 1% of shares to be voted to reach quorum.

With DAOs governance tokens are basically shares, so why does 1% make sense there?

Companies work fine asking for more than 30% of shares getting counted. You said shareholders. Which is unimportant and not a thing for companies. The point stands then these sorts of DAOs are beyond silly

If you ever been in a DAO, you would know vast majority of people including whales don't bother to vote at all even if you personally spam them to vote on matters that impact them.

Which is how many DAOs don't require many votes to pass as the limit gets lower until they are able to reach a conclusion at all.

Not lose the keys just unaware of the vote. There are no push notifications, and every project has a ton of stuff going on.

Come on now, why not take attendance every few months and run an actual quorum on that?

Because a lack of participation is common from holders.

I may have missed some turn here, but if your thesis holds, what would be the motivation for them to vote to force-move their own coins..?

No what I’m saying is that there’s some whale using the service and he looks likely to get liquidated, so the guys running the service have unilaterally stepped in and changed the rules to prevent that whale from doing what they’re doing. So it turns out that the guys running the service had veto power all along, which begs the question what the DAO is even doing other than providing a veil of legitimacy.

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