A governance asset in a Decentralized Autonomous Organization (DAO) is typically a type of digital token that grants holders the right to participate in the decision-making process of the DAO.
Governance tokens often allow holders to vote on proposals and decisions affecting the DAO. The weight of a holder’s vote is usually proportional to the number of tokens they possess.
Token holders might have the ability to create and submit proposals for new initiatives, changes to existing protocols, or other significant decisions.
Governance tokens can be distributed in various ways, such as through initial token offerings, airdrops, or as rewards for contributions to the DAO.
However, as you might have guessed, there is a wide array of recurring issues associated with governance assets:
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Despite the intent to decentralize power, governance tokens can end up concentrated in the hands of a few individuals or entities.
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Many token holders may not actively participate in voting, leading to decisions being made by a small, active minority.
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Malicious actors can attempt to gain control over a significant portion of governance tokens to push through proposals that benefit them at the expense of the broader community.
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The incentives for holding and using governance tokens may not always align with the long-term interests of the DAO, leading to short-term or self-serving decision-making.
The purpose of this section is to highlight some possible solutions to prevent those drawbacks.
The prerequisite for each idea is that the wallet owns both a governance asset and an active subscription to the game.
Basic principles behind proposal 1:
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Introduction of a staking mechanism where players stake governance assets within different in-game locations to receive vote-escrowed tokens (veTokens).
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The idea is that players can stake their governance assets in various in-game locations, such as outposts, citadels, or resource hubs.
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Staking periods can be flexible, allowing players to choose the duration of their stake (e.g., 1 month, 3 months, 6 months).
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Upon staking, players receive vote-escrowed tokens (veTokens) proportional to the amount staked and the duration of the stake, the longer the staking period, the greater the number of veTokens.
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veTokens are used to vote on governance proposals, with the weight of the vote influenced by the staking location and duration.
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Different in-game locations offer different vote weights or multipliers. For example, staking in a high-risk area might yield higher voting power.
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Governance assets are an extremely illiquid, selling and purchasing those should be time consuming, similar to how steam locks up items for 7 days after trading them.
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Use reputation system where higher reputation increases a player’s voting power and influence, creating an organic barrier against low-effort or malicious attempts, reputation points can decay over time if players become inactive.