⚖️ Token Weighting: 1 Token = 1 Vote
Learn how voting power scales with token holdings
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0 / 5 completed⚖️ Token-Weighted Voting: Democracy or Plutocracy?
Most DAOs use token-weighted voting: one token = one vote. Sounds fair until you realize token distribution is wildly unequal. A whale with 100k tokens has 1,000x the voting power of someone with 100 tokens. In traditional democracy, it's one person one vote. In DAOs, it's one dollar one vote—classic plutocracy. This creates a fundamental tension: DAOs promise decentralized governance but deliver oligarchic control by large token holders.
🎮 Interactive: Voting Power Distribution
Adjust token holdings for 5 voters. Watch how voting power concentrates with unequal distribution. This visualizes the core problem of token-weighted systems.
🏛️ Why Token Weighting Exists
Token holders have skin in the game. Bad governance = token price drops = holders lose money. Incentive alignment argument: those who risk most should decide most.
Large holders often have resources to analyze proposals deeply. A16z has a governance team. Small holders may vote randomly or not at all.
One person one vote fails without identity verification. Attacker creates 1,000 wallets = 1,000 votes. Token weighting makes attacks expensive: need to buy tokens.
Easy to implement: read token balance, calculate votes. No identity systems, no reputation tracking, no complex math. Most DAOs choose this path of least resistance.
⚠️ The Plutocracy Problem
Uniswap: a16z holds 7% of supply. Can swing close votes alone. Compound: top 10 addresses control 40% of voting power.
Buy tokens → pass self-serving proposal → dump tokens. Seen in smaller DAOs with low liquidity.
Small holders know their vote doesn't matter. Why spend $50 gas to cast a 0.001% power vote? Participation drops to 5-10%.
Marketing says "community governance." Reality: founders and VCs control most tokens, thus most votes. Decentralization theater.
💡 Key Insight
Token-weighted voting is plutocracy by design. It's not a bug—it's the intended mechanism. The question isn't whether this is "fair" in a democratic sense (it's objectively not), but whether it's effective for decentralized protocols. Arguments for: economic alignment, Sybil resistance, stakeholder legitimacy. Arguments against: concentration of power, voter apathy, extractive behavior. Many DAOs are exploring alternatives: quadratic voting (votes cost more as you cast more), conviction voting (time-weighting), reputation systems, and delegated representation. But most stick with simple token weighting because it's easy to implement and "good enough" for coordination. Next sections explore these dynamics and alternatives in depth.