How to create the first manipulation proof DAO

I’ve been involved with crypto since 2011 and watched it evolve slowly over time. I have always been extremely confident that eventually DeFi would become to logical path for technological evolution. However, changing traditional models and financial systems does not come without its perils.

I believe once the fiat on/off ramp issue is solved without Cease & Desist letters from three letter agencies, DEXs for perps will become more palatable fee, spread and liquidity wise. However that still leaves the conundrum of DAOs. Its very difficult to have a true decentralized organization and still combat fraudulent voting power. But i have an idea…

A Soul bound token attached to a wallet on a physical device.

I first had this idea when I received my Saga Phone. There is a finite supply of the physical devices which cannot be replicated and the Soul Bound tokens cannot be moved to another wallet.

This is probably the only idea Ive ever come up with that could completely solve the issue of fraudulent voting power by malicious insiders such as the incident with DoKwon secretly holding a large majority of supply in other wallets.

I think this is very important, otherwise you end up with a completely irrelevant voting mechanism that ultimately does not reflect the consensus of the users accurately.

I know this isnt a simple solution and would be a large undertaking unless we could leverage the Saga phones. Yes it would limit the amount of users but over time more devices could be produced or we could come out with our own devices such as a hardware wallet instead of a complex and expensive phone.

Anyways, I would love to hear others thoughts on this and potential alternatives. At the very least I know some project could leverage the Saga phone soul bound tokens to create the very first fraud proof DAO and thus a true democratic DAO.

  • d3f4ult
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I like this…Maybe a JUPvoting keycard with chip can be created and shipped to stakeholders that have verified their identities. Similar to tangem.

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In an ideal world it would be non-fungible, but as with hardware devices – they very much can be replicated, and generally only a matter of time before hacked/breached as well. You also have the centralization risk of the manufacturer, not to mention general theft and misplacing/losing things.

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I agree with you @d3f4ult that this is an important topic but don’t exactly see why hardware devices would solve that challenge.

The reason being that you can easily buy 20 saga phones (which happened according to several posts on twitter and is especially easy if the tokens on the phone pay for the phone itself [no risk]).

Also, as @worza mentioned, you have the centralization risk of the manufacturer (although this might be less relevant to the overall issue).

As a solution to this I think about the following

Assumption 1: Each individual user has limited time
Assumption 2: Generally, the more valuable a contribution, the more time it takes
Assumption 3: Contributions are visible
Assumption 4: Visible contributions can be linked to personas (i.e., the sum of online accounts and their respecitve contributions) and personas can be linked to wallets

Conclusion: Instead of a “one token, one vote” or in this case a “one phone, one vote” basis, in DAOs the amount of time spent on providing value is the criteria to be considered “more legit” instead of “more fraudulent”.

In other words: “social proof of work”.

But who decides on the “more or less legit-ness”?

  • first the core team
  • at some point the ones that achieve a high enough contribution score

This makes sense from a psychological perspective too: The more sunk costs you have the more likely you are to stay and contribute even more.

Opinions?

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im sure there will eventually be a way to do this strictly through software and some type of KYC process but i know natives like myself arent fond of those options. however i do see that becoming an eventuality in major project to verify users from sybil attacks as well as DAOs verifying each wallet is a unique individual otherwise the model doesnt work.

after the initial buys started exploding they limited buying to 1 per address. while some did manage to get 20-30, out of 10,000 thats negligible in regards to making a significant impact in a DAO model.

i feel like solving this problem that needs more attention than it gets. having a true DAO would be the equivalent to having a true open democracy allowing the projects to be steered the way the community has consensus on.

anyways just some initial thoughts of mine since ive been in crypto for 13yrs and want to continue pushing the industry forward. appreciate the responses.

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technically anything can be replicated with enough resources but do you think someone is going to allocate the necessary resources to do so? Not to mention the software tied to the unique identifier of the wallet would be equally difficult. But the two combined and i just dont see it being worth it to someone

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I like the idea of a soul bound token, but who needs another device? I don’t think that’s a good idea because it goes against the principle of financial inclusivity of web3 :pensive:

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agreed is there a way to do this without secondary device?

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Hey! Thanks for adding to the conversation! The issue of ‘governance democratization’ is important and all views add value to the discussion.
While i share your concerns with manipulation within a DAO system, i feel we might approach the solution from a different angle.

Current Challenges in DAO Governance:

The reality of any DAO structure, just like any corporate structure is that power often concentrates in the hands of those with the most financial resources. This concentration allows for the creation of policy that can defend positions of power.This undermines the democratic ideals of DAOs.

An Alternative Approach: Expanding Rather Than Limiting Governance

Instead of limiting governance opportunities, I propose we expand them. The key to preventing manipulation is getting JUP (or any governance token) into the hands of a broader base of participants.

Why Expansion Could Work:

  1. As the broader community base grows, the oversize power of any single governance wallet diminishes.
  2. A larger and more diverse community can lead to more robust decision making.
  3. Increased community base aligns with JUP ethos of ‘growing the pie’.
  4. Increased decentralization could decrease ‘enforcement’ vectors from Three Lettered Agencies.

Concept: Recognizing Alternate Forms of Value:

To achieve this community expansion without requiring significant financial investment from all participants, we could:

  1. Identify alternate forms of value within the community/ecosystem.
  2. Reward these contributions with JUP…or a governance proxy

The AV/JUP concept:

Imagine a system where:

  • 90% of the governance/rewards are bound by the traditional USD/JUP relationship
  • 10% are bound by a community defined AV/JUP (Alternative Value/JUP) relationship

This structure could create an environment of fuller enfranchisement without requiring a financial stake.

Note:

AV (Alternate Value) was vaguely defined in this response. I did this because the concept of ‘community defined value’ could literally translate into anything a specific community values…

  • Community Engagement
  • Content Creation
  • User Onboarding
  • Education
  • Technical Contributions
  • Size of your plushy collection
  • Number of WenWen derivative NFTs

If we can value it as a community, then we can reward it on chain.

Example Scenario:

A person from the Philippines joins the community and provides a certain amount of our selected value metric. This contribution is converted into a JUP proxy for use in governance. Active governance participation plus alternative value added provides this account with a share of quarterly rewards, potentially compounding over time.

Potential Impact:

Implementing such a system at scale can:

  1. Democratize governance more fully
  2. Bring diverse perspectives into the decision-making process.
  3. And (hopefully) make the DAO more resistant to manipulation by distributing governance power more widely.

While your concept aims to create a manipulation-proof DAO through specialized hardware, I believe expanding participation through recognition of diverse forms of alternate value could achieve similar goals while aligning more closely to Meow’s version of the “Decentralized Meta” and “Growing the Pie”

I’m actually working on a project exploring the concepts of alternative value in governance. I’d be happy to discuss further if you’re interested.

Peace Out!

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