What Is a Sybil Attack and How Does Quadratic Voting Attempt to Mitigate It?
A Sybil attack occurs when a single entity creates multiple pseudonymous identities to gain a disproportionately large influence in a decentralized system. In governance, this means one whale could split their tokens across many wallets to vote multiple times, circumventing one-token-one-vote limits.
Quadratic voting (QV) makes this attack less cost-effective. Since the cost of votes increases quadratically, the attacker would have to spend significantly more to gain the same voting power by splitting tokens than by voting from a single large wallet.
Proof-of-personhood solutions are also explored to further mitigate Sybil attacks.
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).
Sybil Attack
Architecture ⎊ The Sybil attack, within cryptocurrency, options trading, and financial derivatives, exploits the inherent design vulnerabilities of distributed systems reliant on identity-based consensus.
Pseudonymous Identities
Anonymity ⎊ Pseudonymous identities within cryptocurrency, options trading, and financial derivatives represent a dissociation between on-chain or trading activity and verifiable real-world identification, impacting market surveillance and regulatory oversight.
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.
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.