How Does Token-Based Voting Differ from Traditional Corporate Shareholder Voting?
Token-based voting in a DAO differs from traditional corporate shareholder voting in several key ways. Shareholder voting is legally binding, operates under strict corporate law, and is generally based on one-share-one-vote.
Token voting is often non-binding on the core developers, operates through code, and is typically weighted by token count (one-token-one-vote), though complex schemes exist. Furthermore, corporate voting is restricted to legal entities and often has strict KYC, while token voting is pseudonymous and permissionless, presenting major differences in accountability and transparency.
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).
Shareholder Voting
Mechanism ⎊ Shareholder voting is the formal mechanism by which equity holders in a corporation exercise their right to influence corporate governance, typically on matters such as board elections or major corporate actions.
Token Voting
Mechanism ⎊ Token voting, within cryptocurrency and derivatives, represents a governance model where token holders directly influence protocol parameters or decisions proportional to their holdings.