There has been a lot of discussion lately on the voting system that should be implemented for the Worker Proposal System. A lot of voices have been raised in support of some ID-based voting system, where the amount of stake per voter either doesn’t matter (let’s call this IDV), or is diminished by some algorithm, allowing low-stake accounts to have proportionally higher voting power than they would in a standard stake-based voting (let’s call this QV).
There are several problems with these approaches. Let’s take a look at IDV first, as it is easier to analyze.
Almost every proponent of this approach agrees that we will need some form of strong ID in order to avoid sybil attacks. Even if we manage to come up with sufficiently strong ID in order to minimize the effect of sybil attacks, we still have the much bigger problem that voters will potentially have no skin in the game. With 7.6 billion people inhabiting the world, we can imagine that not all of them will be invested in EOS. However, EOS allows free entry to anyone, so all of these people can potentially create an account and vote for or against a Worker Proposal. Some of them won’t care and won’t do it, but we can safely assume that a large percentage of the population actually cares about their well-being and will gladly sell their vote to someone who does care about the Worker Proposals. What does this mean for the outcome of such a voting result? The wealthiest of us will be able to buy the highest amount of votes, and thus be able to influence the system more than anyone else. These wealthy people are not the same as the current “whales” in the system though - they are the ones that are willing to gain the system for personal gain, and they might not even own a single EOS token. Have you checked Twitter recently? The amount of FUD that is being spread against EOS is ridiculous. These same people that think EOS is scam, that EOS is a dead end, and that EOS will surely fail will have the same voice as everyone else. Why would we want to give an equal voice to everyone, no matter how much skin in the game they have?
We should also keep in mind what is the source of the WP fund. Currently, it is continually accumulated by creating new tokens out of nothing, equal to 4% of the total amount of EOS tokens per year. This creation of new tokens creates natural inflation for the EOS tokens, resulting in proportional decrease in value of each other EOS token that is currently in existence. In other words, we all give up a little of the value of our own EOS tokens in order to fill up this fund. Those of us that own 100 EOS give up only about 4 EOS of value per year. Those of us that own 1 million EOS give up about 40,000 EOS of value per year. So we don’t contribute to this fund equally, but proportionally to our own holdings. Why would we have equal say then? Let me illustrate how unfair this is through an extreme example: if all of the EOS tokens were owned by a single person, then all of the funds generated through inflation would hurt only this person financially. Would we then still demand that we all have an equal voice in how this fund is distributed?
Naturally, the value of the network as a whole depends to a large extent on its usage. So there’s an argument here that the amount of tokens users hold is not the only factor in determining who creates value for the system. The voting mechanism that EOS uses is quite beautiful though - only tokens that are staked for bandwidth of CPU are able to vote. These tokens normally belong to accounts that do use the system, so we have nearly perfect alignment here. I would argue that users that own a large amount of tokens but don’t currently use them for bandwidth or CPU will likely not stake them in the future. They will have better investment opportunities than the potential abuse, resulting in a net increase of 4% of their holdings.
And lastly, there is a concern that whales will abuse the stake-weighted voting system and monopolize new WPs. We’re trying really hard to prevent this, and we believe that it’s in everyone’s interest to have a system that is resistant to this type of abuse, whales included. After all, whales wouldn’t like it if the price of their EOS tokens plummets into oblivion. So this is a valid concern, and we are trying to solve it. IDV is definitely not the solution though.
To be continued: Quadratic Voting, or QV, will be covered in another post.
More to come: What could work, or adding vote weight based on reputation.
DISCLAIMER: This is my own opinion and does not reflect the opinion of the WPS design group as a whole. Some of the other members may share it or disagree with it, but it's up to them to indicate that.