How Does Quadratic Voting Mathematically Limit Whale Influence in Crypto Governance?
Quadratic voting assigns voting power proportional to the square root of the tokens held, not the linear amount. This means a holder with 100 tokens gets 10 votes (sqrt(100)), while a holder with 10,000 tokens gets 100 votes (sqrt(10,000)).
The cost for a whale to increase their voting power grows exponentially, making it significantly more expensive for them to dominate than for smaller holders to coordinate. This mechanism promotes broader participation.
Glossar
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).
Quadratic Voting
Formula ⎊ The core principle employs a cost function where the expense to cast additional votes increases quadratically, typically requiring $n^2$ tokens for $n$ votes.
Whale Influence
Influence ⎊ The concept of Whale Influence within cryptocurrency, options trading, and financial derivatives signifies the disproportionate impact of substantial market participants ⎊ often entities holding significant digital assets or derivatives positions ⎊ on price discovery and market liquidity.
Voting Power
Governance ⎊ Voting power in the context of cryptocurrency refers to the ability of token holders to participate in the decision-making process of a decentralized autonomous organization (DAO) or protocol.