How Snapshot and Orange are making crypto more democratic by voting based on reputation

November 24, 2021 - Around 7 mins mins to read

Today, token-based voting is the primary mechanism for determining the direction of development and growth of a decentralized autonomous organization (DAO). However, this model has inherent flaws and inequalities that require new solutions to create more equitable and reproducible DAO projects.

That’s why Snapshot and Orange are working together to enable reputation-based voting and give the most loyal and active DAO contributors the loudest voice. We make real democracy a reality in the crypto space.

2021 is clearly the year of the DAO. From layer-one protocols to decentralized financial projects (DeFi) and non-distributed tokens (NFTs), DAOs play a vital role in defining the future of every blockchain community and the entire ecosystem.

However, in order for the DAO, DeFi and NFT ecosystems to thrive, governance tools must be scaled in addition to the current token-weighted voting parameters. This is one of the key challenges that Ethereum co-founder Vitalik Buterin pointed out in a recent post explaining the risks, dangers, and inequalities associated with decentralized governance (DeGov) and voting.

Aside from the economic inequalities of token-weighted voting, there is also no way to verify the identity of voters. These factors make current governance models vulnerable to individual users casting multiple votes or speculators holding bulk tokens, which disproportionately affects the outcome.

Snapshot is at the forefront when it comes to renewing the DAO’s commitment and addressing these core issues. And in connection with the portable status on Orange, we will create fairer and more adaptable participation structures for all DAOs.

Importance of reputation-based engagement

In most DAOs, reputation is everything. Community members and moderators recognize the input and involvement of key people, and their opinions gain weight as projects and communities grow. However, this practice is in contrast to traditional voting standards based on token weights, as current voting power is linearly tied to token holdings that require capital ownership. With the increase in delegated voting rights in DAOs, steps have been taken in the right direction, but the model still favors the votes of those who have more money.

This makes the voting of the DAO vulnerable to token holders who are merely speculators or who have no intrinsic interest in the future success of the DAO. For this reason, the importance of reputation-based voting is becoming increasingly important as DAOs seek to build communities where individuals are consistently engaged, as opposed to a regressive model where passive users can collect tokens for a short period of time in order to be exclusively about to vote yourself – interest or not at all.

By combining Snapshot’s extensive DAO voting record with Orange’s ability to produce customizable Reputation, Resume and NFT reports, DAOs can act as algorithm providers to create voting structures that more accurately reflect the sentiments of the community. Snapshot’s data set can be used in conjunction with Orange to improve users’ reputations and build their reputation management systems. Applications beyond weighted voting, such as airdrops, DAO membership levels, and reputation-based rewards, are also implemented.

Quadratic tuning dimensions and Sybil. Resistance

The concept of square voting is not new, but so far it has been difficult to implement into governance of the physical world and DAOs. In square voting, a person’s voting weight is increased based not only on how many tokens they have, but also on how many others are voting in the same direction.

For example, 100 voting tokens from 10 different people are considered to be heavier than 100 voting tokens from just one person. In this way, the direction of the DAO is determined by the collective decision of a majority of its members rather than the decision of a few wealthy people.

Square voting is likely to become the standard for reputation-based decision making in the DAO and Internet-3 communities.

Another important aspect of the Snapshot and Orange collaboration is getting the DAO to vote against Sybil. It is an unfortunate reality that many communities are grappling with bots or individuals using multiple identities to compromise choice. Orange offers DAOs the ability to verify the identity of each voter along with their reputation to ensure that each voice is authentic and that each identity belongs to a dedicated DAO member.

For example, the Orange algorithm can return reputational credentials that indicate that a particular Snapshot user is more than 80% likely to be a real person. This calculation takes into account verification data from sources like BrightID and Idena – along with internal snapshot data – to determine user activity levels. Square polls were developed by platforms like Gitcoin for public goods projects, but Snapshot and Orange are helping to make the process Sybil more resistant than ever.

Snapshot and Orange integration for DAO voting

Snapshot created an efficient platform for DAO proposals, discussions and voting. And by integrating cam scores with snapshots, DAOs can weight votes based on reputation rather than token holdings. Rather than deciding on who has the most say by assets, a member’s track record and continued participation in multiple DAOs gives them a greater say and promotes higher democratic standards, which we have seen in the crypto space.

Voting based on snapshot reputation can also take into account how long a user will hold certain tokens, giving their votes more weight. This does not differentiate between pumping and pouring or individuals who acquire a large number of tokens in a short period of time in order to disproportionately influence a single proposal. Attendance time and token holding time are just two of many factors the DAO can use when assessing the reputation, profile or reporting of members created by Orange.

Once Snapshot, together with Orange, fully implements call-based voting, this new model will also incentivize users to be more active in DAO governance in order to improve their reputation. Language and social interaction will increase and there will be more meaningful discussions about project placement. And as individuals improve their reputations, Orange will use this data to create a portable profile that other DAOs can use, along with snapshots to do square votes based on their reputation.

For the future, the goal of Snapshot and Orange is to help DAO communities regenerate, not degenerate. Members will continually re-create activities and posts within DAOs, with the reputation of the cell phone as the main driving force. DAO discussions and communities will therefore have more depth and engagement over time, as opposed to anonymous users who lose interest or large token holders simply do not participate in discussions.

Reputation-based voting is the future of World Wide Web Governance 3rd DAO. DAOs will be able to see that every voter is a real person and weigh voter engagement and participation over simple wealth. Snapshot and Orange bridge the gap for fairer, contributory DAOs with users who care about their reputation and focus on the best interests of the project.