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Governance Model Problems

TODO:

- Clearer definitions
- Paper / article references

In a governance model of a DAO, members have to decide and vote on proposals which decide what decisions will be made in the DAO. There are many interests which may be in conflict with each other: (economic) interest of individual persons, the interest of the overall DAO, the economic interest of members with a low amount of stake in the DAO, etc.

It can be argued that in a DAO, it can be undesirable for a single person to have a large amount of voting power. In many models, voting power is proportional to the amount of stake a member has. People with large financial means can thus easily overtake power in a DAO.

One trivial solution is to set a maximum to the amount of voting power a single person can have. In order to do this however, there must be some type of guarantee that a DAO participant is a single person. If not, a person can simply create many identities and achieve a larger stake and thus voting power.

Achieving this in a decentralized system is hard, and is similar to the sybil resistance problem. There are a number of ways to go about this, all which have their own advantages and dis-advantages. An attempt to catagorize them here:

- Authority-based identity models: 
    - A trusted authority or set of authorties give out digital identies.
    - I.e. can be a government or a large "trusted" tech company.
    - (-) Centralized
    - (+) Strong guarantees, assuming the entity is trusted (such as a government)
- Probabilistic-based identity models:
    - Models similar to Trust-chain, where participants in the network
        transact and build up trust with a set of other participants which
        they know and trust in real life. Through this web of transactions (web-of-trust), a probabilistic model can generate a trust-score for every participant and thus give some guarantee on if a participant is a single person.
    - (+) Decentralized
    - (-) Probabilistic, no hard guarantees
    - (-) Requires network adoption to work effectively