Exchange wallets are well-known and easily identifiable.
Currently rules of the DAO do not account for the influence of exchange wallets.
Exchanges are stakeholders in the network and should have a voice, however rules must be established to ensure fairness.
There is no debate that exchanges should not be able to vote on behalf of the users holding CKB on their platforms, however we should encourage exchanges to utilize the Nervos DAO, for its economic and governance functions.
Thus this rule is proposed to establish orderly operations around exchanges and voting in this DAO. While this may feel a bit premature, there is no wrong time to prepare and adopting this rule (or a variation of it) will lead to discourse valuable to future operations of the network.
For example: Binance holds 8 billion CKB, 8,000,000,000*.01 = 80,000,000 (80 million CKB that can be cast for vote)
This is a good proposal. @matt.bit has provided a direction for decentralized governance, which allows more people to participate in our governance. Let’s work together to improve it further.
Although exchanges hold a significant amount of CKB, they are unlikely to participate in this kind of governance due to security considerations. Voting governance requires connecting a wallet and verifying the signature information, which introduces uncertainties in terms of security for exchanges. Therefore, I think it is more feasible to encourage regular users (non-NervosDAO users) to participate in governance by holding CKB. The following rules apply to all CKB holders, including exchanges:
Any address holding CKB can vote. However, if the CKB on the address does not have NervosDAO, the voting weight will be 1% of the weight of the equivalent CKB in lock-up (adjustable parameter). Their votes should be accumulated if an address has both Circulating CKB and NervosDAO CKB. For example:
User A has 1,000,000 CKB stored in NervosDAO and 500,000 CKB in circulation. In this case, his vote counts Va = 1,000,000 + 500,000 * 0.01 = 1,005,000.
User B has 2,000,000 CKB, all in circulation. His vote counts Vb = 0 + 2,000,000 * 0.01 = 20,000.
During the voting period, the participating addresses need to be scanned multiple times, and the vote counts should be updated to ensure the validity of the votes. Consider the following scenarios:
Circulating CKB can be transferred flexibly. Without control, someone may continuously transfer their circulating CKB to another address to vote during the voting period.
User A has CKB deposited in NervosDAO. After voting, before the voting proposal is closed, they may withdraw from NervosDAO and re-deposit it, using the new CKB address to vote again.
So, we need a polling mechanism during the voting period, if the CKB balance associated with the participating address changes, it should be reflected in the voting results to ensure the validity of the votes.
I think exchanges will utilize the Nervos DAO in time due to it’s economic function. Binance holds 8b CKB, which is about 20% of circulation, 20% of 1.344b is about 260 million CKB/year they are allowing to burn (actually number is a little less because secondary issuance is also spread over 60% of genesis burn).
At .0035, 260 million CKB is not much that would compel an exchange, but with appreciation it would be.
Regarding security, an exchange would need to sign a message from the depositing address to bind the deposit to another (empty) address strictly used for voting. Signing a message from an address is a normal procedure from an exchange, it is used in proof of reserves.
Regarding non-DAO users voting. I have some hesitation regarding this impacting decision making. I can see if it is used as a signaling mechanism so these holders are heard but not sure about actual DAO votes. Looking at the Binance calculation, the 1% weight does remove a great deal of power while still allowing for a voice. Overall, it is a useful idea to consider and looking forward to hearing opinions.
I personally favor yixiu.ckbfans.bit‘s suggestion: Any address holding CKB should be eligible to vote, and the voting weight of CKB without lock-up should be calculated as 1% of the weight of the equivalent CKB in lock-up (adjustable parameter).
“During the voting period, the participating addresses need to be scanned multiple times, and the vote counts should be updated to ensure the validity of the votes. ” – a more concise approach would be taking a snapshot of all voting addresses when the voting period concludes (or in the next block), and the CKB balance at the time of the snapshot will be used to calculate the voting weight.
It is recommended that yixiu.ckbfans.bit‘s suggestion be introduced as a new proposal for meta-rule changes, as it differs from Matt’s proposal. The former caters to all CKB holders, while the latter applies exclusively to exchanges.