Sushi consensus

I propose that all sushi in treasury be given to me. To those who vote yes to the proposal I will give 100000 sushi.
If everyone voted yes?
What if I made 10,000 accounts and voted yes?
I’m kidding, of course, but what if this proposal passes?
What if I’m a whale that I vote yes?

The scale problem

Decentralized governance holds many challenges and that’s why we haven’t seen any DAO yet in action. In particular, I believe to be the biggest of them all, the scalability problem and its inherent tension with resilience.
As described there: requiring in a DAO too much of the collective attention to be spent on and approve each and every decision makes a decentralized governance system obviously unscalable; while requiring too little potentially makes it not resilient to faulty decisions, collusion, or simply misrepresentation of the collective opinion. The bottom line is that naive consensus (and in particular, governance) systems are simply not scalable.

Almost by definition a proper solution to this problem should allow for decisions in a DAO to be made with limited attention and voting power, as long as these decisions are ensured to be in line with the global opinion of the DAO.
I’m presenting the holographic consensus (HC) solution for scalable, resilient and decentralized governance, describing its basics and how it is enabled.

Resilience

Firstly, let’s define the DAO’s global opinion, or simply the DAO’s opinion about a proposal under consideration. The DAO’s opinion about a proposal would be its ultimate decision, or output, given its decision-making protocol, when all agents in the DAO had the sufficient bandwidth of attention to sufficiently consider that proposal and express their opinion to the DAO. (Having no opinion is a legitimate opinion too.) Sufficient bandwidth of attention is exactly what we’d like to relax later for sake of scalability, but we need the DAO’s opinion as a theoretical point of reference. The DAO’s approximate opinion about a proposal would then be achieved when most opinionated agents have approximately sufficient bandwidth to consider the proposal and express their opinion.

It’s worth noting that a general DAO is like a living creature, with its own subjective mind that senses, perceives, thinks, makes sense and takes decisions. In particular it has its own subjective right or wrong, good and bad, rather than objective ones. We will not discuss in here what drives a DAO into making ‘good decisions’ or what good means altogether. Rather, for now we only wish a ‘good DAO’ to act in line of its own global opinion.

With this setting in mind, a decentralized decision-making system will be denoted resilient if it ensures all decisions made in the DAO to agree with its approximate opinion (or to approximately agree with its global opinion)

Scalability

The DAO has a mission and its governance purpose is to make decisions that promote that mission. In particular, it could be decisions about allocation of funds to incentivize agent actions supporting its mission. More contributing agents in the DAO means more possible contributions, and the need for more resource-allocation decisions about those contributions. Thus, in order to grow effectively, a DAO decision-making system needs to process more and more decisions in a fixed period of time as the DAO grows in number of agents. When speaking about DAO scalability we refer to its ability to scale up the number of decisions it can effectively make in a period of time.

It’s important to note that the one thing common to all economic organizations known today is that they become less and less effective in decision-making as they grow. Thus, we propose that DAOs are a new breed of organizations that are scalable in that they can effectively grow their operation and decision-making when growing the number of their agents.

As previously stated, having most voters considering each and every proposal is clearly not scalable. At the same time, a resilient DAO governance system means that decisions are made in line with its global opinion. Thus, scalable and resilient governance systems by definition must enable decisions to be made by relatively small amount of influence or voting power (which we also call reputation ) on behalf of the entire DAO, under the condition that those decisions are still ensured to be in good alignment with the DAO global opinion. This tricky situation is the very definition of holographic consensus.

Relative majority

The simplest solution to scale up decision-making power is to have decisions approved by relative majority rather than absolute majority . An absolute majority is the majority of all voting power in the DAO. For example, out of a hundred equal agents, an absolute-majority decision requires the approval of fifty-one agents, and implicitly the active participation of at least fifty-one of them. Very resilient and non-scalable situation.

Relative-majority approval requires the majority only out of those who voted on a given proposal in a certain voting timeframe. A proposal is open, say, for one week, by the end of which a decision is made. If only nine out of a hundred equal agents voted on this proposal within that week, it is enough that five of them support the proposal in order to approve it. A relative-majority voting system is indefinitely scalable, being able to process and reach a decision about any number of proposals at a given period of time, but is also potentially not resilient. If there’s no limit on the number of proposals and no further conditions to relative majority, anyone can easily attack the system by spamming it with millions of proposals, diluting the voters’ attention where most proposals will remain unnoticed. The attacker could be the single voter on a malicious proposal to transfer to himself all of the DAO funds. But beyond the overflowing attack on the collective attention, decisions will not represent the DAO’s global opinion, and increasingly so with increasing scale of decisions made in a fixed timeframe (thus the aforementioned tension). In our previous terminology the system will not be resilient, which means it would be both manipulable and would not act with or generate coherence.

It’s worth mentioning that the standard use of relative-majority based voting systems includes a quorum : a minimal threshold of voters that’s needed to render a vote valid. The problem with quorums is that they hit the scale problem of an absolute-majority system when being set too high, the resilience problem of a relative-majority system when being fixed too low, and often both at the same time. This conflict increases with the volume of decisions made, and consequently quorums are bad for scalable governance.

Boosted proposals

Decisions should be approved with absolute majority by default. However, we would like to allow decisions to be made by relative majority under some protective conditions that ensure the alignment of those decisions with the DAO’s absolute majority. We denote by boosting the transition of a proposal from an absolute-majority to a relative-majority vote, and by boosting conditions the conditions a proposal needs to satisfy in order to be boosted.

Monetizing attention

Boosting a proposal allows agents to consume the scarce resource of collective attention —perhaps the most scarce resource in a DAO— and enforce decision on their matter in a finite time. It should accordingly be monetized.

The simplest boosting condition would be payment in DAO tokens. Want the DAO to screen your proposal? Easy, for hundred DAO tokens the collective attention is (mostly) yours. You cannot buy a decision, but you can buy it into consideration . Anyone can promote a proposal, not only the proposer, and once a certain promotion threshold is reached the proposal is boosted.

Proposal algo for study

Yours…

:rofl: Do I put my address to send the sushi tokens? :rofl: :rofl:

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