Identity based governance

Governance
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1 dollar 1 vote (1d1v) is the voting mechanism that is currently used by the algorand governance platform. there’s good reason for this, it assumes that the more economic value you have, the more likely you are to want to make good decisions for your community, and therefore the more trust should be given to you for decision making. makes sense.

however, there are valid arguments against 1d1v, which is effectively plutocracy.

namely, who’s to say someone with 1M algos has a more valuable voice than someone with 10k algos? sure you can argue that the person with 1M has more skin-in-the-game and therefore would be more likely to make intelligent governance decisions, but this is not necessarily true.

furthermore the water gets murky in the case of delegations. while there’s no explicit delegation mechanism for algo governance, by holding your algos on an exchange, if that exchange puts those algos up for governance yield, that’s implicit delegation.

of course this may not seem like a big deal – but it is a vertical centralization vector.

one alternative is 1 person 1 vote (1p1v) where every wallet address gets 1 vote. the most obvious problem is; you can simply create many wallets and sybil attack the voting system.

this is where identity mechanisms could come in handy. 1p1v in online voting is an extremely hard problem that has lived rent free in the minds of many computer and political scientists for decades.

seems like the decentralized identity sphere is becoming more saturated with solutions, even algorand has a handful of projects with their own attempts.

if there was a robust decentralized identity mechanism, do you think it would be advantageous for algorand governance to move away from a plutocratic 1d1v system and experiment with 1p1v (or some other mechanism in the middle like quadratic voting)?

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Maybe a “bicameral” system with 1d1v in the “House” and 1p1v in the “Senate”? Still would depend upon the validation of each unique person. They do it for Binance or other trading platforms, so it could be possible to create a registry or validated wallets, so it would really be 1vp1v - 1 vote per validated person.

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No. It’s called “Capitalism”.

Algorand Governance is not a political activity. Imagine a person with “1 Algo” wields the same voice as with “10,000 Algos”. People with 10,000 Algos carry much much higher risk than ones with 1 Algo. If someone is genuinely interested in making Algo better, take an action, e.g., buy more Algos, rally people to collectively vote, etc.

Note that 1 Algo 1 Vote is a fair capitalism compared to unfair one adopted by big tech companies where a special class of shares represents 100x voting power the regular ones.

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Combination of 1p1v and 1d1v even with quadratic voting is implemented in the VoteCoin… check the specs … Introduction - VoteCoin or implementation

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I dont totally disagree with you, but I think there is a valid discussion to be had about how to make a better governance system. Should 1 Algo = 1 Vote? I think in a capitalistic way like you mentioned, that is fair and makes sense. But are we trying to make the best governance system, or the fairest capitalist governance system? I think there are many ways to explore how to do this, and using decentralized identity services could be an interesting way to gate keep voting on this. I’m not saying someone with 1 Algo should have the same amount of votes as someone with 1M Algo, but I think there’s some other points just to consider. I’m not against the current governance system of 1A = 1 Vote, but I think these are things to consider that could potentially improve it.

  • What if a decentralized identity service could create a weighted system? We already have xGov’s whose exact roles and parameters havent been completely flushed out.

  • Should 10K algo purchased on the day a new governance period starts by a new algo user be worth the same voting power as someone with 10k algo who has maintained 10k algo and voted in governance for over 1 year consistently?

  • Could this be a way to remove the power of exchanges from voting?

  • You could potentially bring TVL as a metric for voting power for a user into this. For instance, I have about 30% of my algo locked in the Pact.Fi BTC-Algo pool, it could be a way to give more power to folks who are bridging goBTC and goETH as well.

Not saying these are all things that are the answer going forward, but utilizing a decentralized identity service could definitely bring some potential new solutions on how to evolve governance.

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You brought up many interesting points.

I think we have to ask ourselves many questions:

  1. What would make a better or the best governance system?
  2. What’s the goal of the governance system?
  3. Was there actual harm done by the current governance system?
  4. What’s the outcome we’re expecting through the best governance system?
  5. Could it be abused to grow certain DeFi projects in an inorganic manner?
  6. Could it be abused to empower the DeFi elite group of people, who are apparently very knowledgable compared to average Algo holders?
  7. Would the Identity-based voting make it difficult for average Algo holders to participate in governance?
  8. Is it worthy to open a can of worms to make complicated changes to the existing governance system?

I believe in simplicity in the governance and organic growth in the ecosystem.

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  1. What would make a better or the best governance system?

I think the best governance system accurately represents the opinion on propositions by holders who are knowledgeable and have the ecosystems best interests in mind that move it towards “the future of finance”, while simultaneously accounting for investment into the ecosystem in both time and money.

  1. What’s the goal of the governance system?

To help decentralize decisions by the foundation while promoting Algorand and helping it achieve it’s mission of being the future of finance

  1. Was there actual harm done by the current governance system?

Probably not, were incredibly early. If anything it may have been too early to turn the power over to the community. The Foundation may regret not making more decisions before trying to decentralize it.

  1. What’s the outcome we’re expecting through the best governance system?

A growth in decentralizing decisions that are beneficial to Algorand’s mission statement.

  1. Could it be abused to grow certain DeFi projects in an inorganic manner?

Yes, depending on how voting power is distributed, but I would recommend against allowing platforms to vote on behalf of people in anyway.

  1. Could it be abused to empower the DeFi elite group of people, who are apparently very knowledgable compared to average Algo holders?

Potentially, depends on how its changed/designed

  1. Would the Identity-based voting make it difficult for average Algo holders to participate in governance?

Yes, but I see a world where Algorand users are all using NFDs, and creating a digital identity with FlexID or another decentralized identity service (whichever wins out). I think this will be common place in web3, to have your own identity which proves asset holdings, voting history, and many other things. Users who are not using basic services like this in the future when it’s the norm, maybe they aren’t the type of people that should be voting on the future of the ecosystem? I know 10 of my friends who own Algo, and for awhile just held it on coinbase. They just started participating in governance, but I had to walk them through it. They don’t know who Silvio is, they couldn’t tell you Algorand’s value prop, or anything at all about how it functions, what governance is, or anything. These people’s votes determining the future of the blockchain is a bit scary. Right now its not an issue because all of the users that fit in this category dont participate in governance or dont own enough for their vote to matter in practice.

  1. Is it worthy to open a can of worms to make complicated changes to the existing governance system?

Don’t know. It depends on the system. I think the process of voting can be just as simple as it currently is, but the underlying system that determines voting power and xGov can be more complicated. You may not need to understand the calculations and the details…just like to buy an NFT you dont have to know how the smart contract functions. I dont think the UX should be harder or more complicated at all, but there is an argument to be made that creating a more complicated power distribution system may be beneficial.

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Overall, the main problem is that right now there is not a decentralized identity service that is live and people arent using it, so whatever system is developed, is nowhere near ready for this, nor do we know all of the potential it has and how we could use it to determine voting power. This really only works once this is normalized. It’s probably pre-mature to think this is a solution that could help governance within the next 2 years. If it became as ubiquitous as using a DNS service, then I think there would be room for innovation in governance using a DIS.

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If I translated what I mostly gleaned from above into democratic principles, every billionaire would have more votes in an election than the majority and, moreover, only those who know exactly what they are doing according to this majority should have a vote.

Has this technique some describe as Capitalist worked so far on the side of decentralisation anywhere or at any time?

Maybe we need to start by defining what is meant by decentral. Do we count people or coins?

Here’s my opinion. The task of those currently in charge, if they truly want a decentralized system, is to welcome all equally. I’m speaking of people here, not money, not tokens and not influence. The same with government of any description, educate the people to act as informed participants.

It mightn’t be Capitalist but it would be decentralized and that’s what we’re discussing isn’t it?

The question really is, is algo a general public coin or one for the wealthy to manipulate for their own private means? I suspect we shall find out in due course what the foundation wants.

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1p1v is not appropriate in my opinion. I’ve mentions before the option of counting votes as the fourth root of the number of Algo you have. People with more algo have more votes, but not so many as to drown out everyone else. 1A is 1 Vote. 100A is 3 votes. 10,000A is 10 votes. 1 million A is 31 votes and 1 billion a is 177 votes.

I think using an identity system is interesting but antithetical to cryptocurrency and the psuedonymous/privacy ethos.

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Hmm, what if we did it somewhat like congress. small wallets/ retail investors would be the house and the big wallets/whales/smart money would be the senate. both sides could come up with proposals but they would both have to come to an agreement in a certain amount of time (maybe 15 days).
if both sides agree, then it will be passed to the xgovs (remember small and big wallets can be xgovs) to finalize it. if both sides cant come to an agreement within time, then the xgovs or the foundation will present the voting options.