How Does a ‘Delegated Voting’ System Work in a DAO?
A delegated voting system allows a governance token holder to assign their voting power to another address, known as a 'delegate,' without transferring ownership of their tokens. This is designed to combat voter apathy by allowing passive token holders to empower knowledgeable, active community members or experts to vote on their behalf.
The delegate then votes on proposals using the combined power of their own tokens and the tokens delegated to them, increasing overall participation and informed decision-making.
Glossar
Passive Token Holders
Participation ⎊ Passive token holders are individuals or entities that possess governance tokens but choose not to actively participate in voting on proposals or protocol changes.
Delegated Voting System
Delegation ⎊ The Delegated Voting System permits token holders to transfer their voting power to a chosen representative, known as a proxy or delegate, without relinquishing ownership of their underlying assets.
Voting Power
Measure ⎊ Voting Power is the quantifiable metric representing the degree of influence a specific participant holds over the outcome of a decentralized governance vote, usually derived from the quantity of staked or delegated tokens they control.
Voter Apathy
Inertia ⎊ Voter apathy within cryptocurrency, options trading, and financial derivatives manifests as a reluctance to actively manage positions or respond to evolving market signals, despite possessing the requisite information and tools.
Voting
Governance ⎊ Voting within cryptocurrency, options trading, and financial derivatives represents a mechanism for stakeholders to exert influence over protocol parameters, listing decisions, or the direction of decentralized autonomous organizations (DAOs).