Governance proposal: One wallet one vote (As opposed to: One SHD one vote)
I have had a few conversations on this topic in the Discord and thought I would aggregate some of the things brought up into a forum post for more long form discussion. I want to have a conversation around this topic before governance is launched, as once it set in motion it will probably be very difficult to change. This is intended as a general outline to inspire more ideas and discussion, and not some sort of concrete solution.
I would note that a one-wallet-one-vote governance system is completely new territory for a DAO, I don’t think it has ever been seriously attempted before in defi. It is only made possible by the power of data encryption that Secret Network provides, and would be a marquee governance system not only for the Secret ecosystem but for the entire crypto space as a whole. Shade protocol is pushing the frontier of innovation in defi in a lot of ways, and the below-outlined idNFT system could potentially end up setting the standard for decentralised governance in defi going forward.
- Person connects their wallet to the DAO home page
- Person does a captcha, and a small quiz that shows them how the DAO works/some principles of decentralisation/self sovereignty etc.
- Using an automated, off the shelf system, person verifies their government ID.
- Upon completion, the protocol mints an NFT stating that you, wallet xyz, are person #xxxxx to have completed induction into the DAO.
This NFT is then an idNFT, proof of humanity. It is a unique identifier of a wallet, by virtue of its non fungibility.
Only wallets with a Shade DAO idNFT can vote in governance. Kind of like citizenship. Ownership of an idNFT would be publicly visible, but the personal data would be private. I would imagine that to avoid spamming, the persons name would need to encrypted to stop them re-using the same ID multiple times. (The exact specifics surrounding which bits of metadata could be public/private are better discussed in detail by more tech-savvy people).
-I would wager that a large majority of people who are interested in defi have a strong motivation to get away from being controlled by capital-rich oligarchies (ie. The legacy banking/financial sector).
-Having a one-wallet-one-vote system is inherently democratic (rule by popular consent), and tends towards decentralisation. Having a one-SHD-one-vote system is inherently undemocratic (rule by the wealthy), and tends towards oligarchy.
-The above proposed proof-of-humanity/induction idNFT could be used to lay the foundation for merit based community/forum membership (peg-gang NFTs for access to peg governance etc).
-Side bonus of familiarising community members with public/private data of SN NFTs.
-Increased inclusion & sense of meaningful contribution to governance. We can’t ignore that we live in a world where, even in the wealthiest nations (on a GDP/Capita basis), the majority of people live pretty much paycheck to paycheck. So a one-shd-one-vote system is quite an inhibitor for ordinary people who want to get involved in the DAO and feel like their decisions actually matter.
Some criticisms and possible responses: (I invite more scrutinty of idNFTs in the below thread)
Why government IDs?
-It is probably the widest net. I would wager that 100% of people who would be interested in Shade protocol governance over (at least) the next 3 years have some form of government ID.
-They are the hardest to fake.
-A lot of systems available to verify them.
-There will be some sort of third party risk involved with verifying the IDs, and systemic (layer 1 protocol) risk that could come with encrypting the data on the IDs, but hopefully someone reading this can provide some more insight there.
Couldn’t a large institution/entity get all of its employees to make idNFTs and manipulate the DAO that way?
-Alameda research (probably the heaviset hitting crypto investment fund) only has around 50 employees. They could probably instead simply buy their way into controlling the DAO. It would probably cost them a lot but there is nothing at all to stop a hostile economic takeover really, and it would be very valuable to someone like Alameda to control something like Shade protocol. The temporary price pump that the buyout would cause would probably just excite people and make them rejoice in the event.
-Even if a big government institution/commercial bank made all of its employees (and there could be thousands) make idNFTs to attack governance, voting is still private, so there would be every oppotunity to convince those people (who in all likelihood don’t like their employer, be it the government or JPMG) to choose the SILK road. There would all of a sudden be a large number of relatively well educated and trained people involved (anonymously) in Shade governance, which is quite close to a best case scenario when you think about it.
What do I think the easiest way to attack idNFT-based governance?
-If someone (a government entity/institution/hacker) gets access to thousands of legitimate government IDs and uses them to mint lots of idNFTs, and then attempt a takeover that way.
-Would be very beneficial for Web 3 in general if there was an open source program that verfied government IDs.
-I am aware that governance/control probably currently resides with whoever is funding the core team, and to move to a one-wallet-one-vote system may be against their interests. There is a possibility that there could be lawsuits filed if the utility of the SHD token is changed in any way, as there may have been assurances given to the investing parties.
-There could also be different types of governance votes; popular votes (idNFTs) Vs Executive votes ($SHD), for decisions of different impact levels for the protocol. The $SHD token could be used in governance as some sort of veto-power vote, so if there was some sort of popular motion that was very unattractive to $SHD holders it could be vetoed, that way decentralised and centralised interests could balance one another.
-$SHD weighted voting could also be carried out in conjunction with idNFTs, where the voting contract has some sort of logic that would read; “does voting wallet have an idNFT? If yes-> accept vote, If no-> reject vote”. In this context the idNFT would provide a proof-of-humanity function.