Lots of good questions and points of clarification - will address those in a separate thread but want to share our current thoughts on Quadratic Voting.
tldr; we recognize we were premature to propose full quadratic voting at this stage given the current level of governance participation and lack of satisfactory sybil resistance mechanisms. We therefore propose Threshold Quadratic Voting, which initially will behave much like 1 token 1 vote but gives the community a easier path toward Quadratic Voting when systems are more mature and thus more secure.
We believe that Quadratic Voting is a meaningful form of governance to reach for for the effect it has in leveling the amount of influence that any individual has regardless of the amount of wealth they have. Particularly for treasury purposes, we believe that this behavior of giving more weight to the voices of the many is desirable.
That being said, a key component to making quadratic voting work is a sybil resistance mechanism, otherwise the cost of attack for a malicious actor is significantly lowered compared to 1 token 1 vote schemes. When looking at the current state of the art in decentralized identity solutions, we were not fully satisfied with them (e.g. Proof of Humanity’s verification requires picture and video submission, BrightID verification relies on wisdom of the crowd which may be a high cold start cost, and Gitcoin Passport integration would not be trustless).
We believe that in order for new forms of governance to be successful, it’ll take many small steps to build up the collective muscle for decentralized ownership and technical scaffolding for more interesting systems rather than one big leap.
In that light, we propose a modification to quadratic voting that we’re calling Threshold Quadratic Voting. The concept is hopefully easy simple to grasp: up to a threshold value voting power is calculated linearly (1 token 1 vote) and after which voting power is calculated quadratically. For example, Person A has 100 ZRX and Person B has 200 ZRX if a threshold value of 100 is used, Person A will have 100 voting power and Person B will have 110 voting power (100 + sqrt(100)).
We propose that the initial threshold value to be set to 1M ZRX and that this variable can be modified via governance. We acknowledge that this solution does not solve the hard problem of quadratic voting but instead gives the community an easier path to transitioning to quadratic voting when better solutions are found. This initial value of 1M in effect, makes voting power linear for almost all voters. However, we hope that with time, this variable value can be lowered such that we achieve the initial goal of giving more weight to the voices of smaller token holders.
Here is the a notebook that we used to determine that the cost of attack against pure quadratic voting is too low and that the threshold we’re proposing meaningfully increases that cost of attack. Below is a chart of what the cost of a 51% attack would be for different threshold values assuming that there are 20M ZRX active in governance split across 100 wallets.
Looking across the governance space, we see that there are many teams that are taking the lead in solving these harder problems of governance - for example this prop.house RFP for private voting solutions for Nouns DAO. We do not believe that we as 0x Protocol community needs to be the group to solve the problem of quadratic voting but instead should work with/support other teams whose mission are more directly focused on governance.