Quadratic Voting in Blockchain Governance

Abstract

Governance in blockchain platforms is an increasingly important topic. A particular concern related to voting procedures is the formation of dominant positions, which may discourage participation of minorities. A main feature of standard majority voting is that individuals can indicate their preferences but cannot express the intensity of their preferences. This could sometimes be a drawback for minorities who may not have the opportunity to obtain their most desirable outcomes, even when such outcomes are particularly important for them. For this reason a voting method, which in recent years gained visibility, is quadratic voting (QV), which allows voters to manifest both their preferences and the associated intensity. In voting rounds, where in each round users express their preference over binary alternatives, what characterizes QV is that the sum of the squares of the votes allocated by individuals to each round has to be equal to the total number, budget, of available votes. That is, the cost associated with a number of votes is given by the square of that number, hence it increases quadratically. In the paper, we discuss QV in proof-of-stake-based blockchain platforms, where a user’s monetary stake also represents the budget of votes available in a voting session. Considering the stake as given, the work focuses mostly on a game theoretic approach to determine the optimal allocation of votes across the rounds. We also investigate the possibility of the so-called Sybil attacks and discuss how simultaneous versus sequential staking can affect the voting outcomes with QV.