An Ethereum-Based Quadratic Voting (QV) System
Liberation Through Radical Decentralization
In this article, Vitalik Buterin, founder of Ethereum, talks about the potential and the demand of building up a quadratic voting (QV) system on his blockchain platform Ethereum – in such voting system, the voters have to pay quadratic costs to their votes (e.g. 1 for 1 vote, 4 for 2 votes, 9 for 3 votes). Compared to a one-person-one-vote voting system, this is a more democratic voting system as it grants more voting power to the wealth minorities. It can be used in various economic and blockchain-based social networks to deal with the substantial governance problem.
Despite all those fancy big words in the crypto space, blockchain is essentially a data structure that function as a public transaction ledger. If we consider all holders/public addresses on a blockchain platform as nodes, then all the transactions become directed edges between nodes. And since the “ledger” is public, we are able to track down all the transaction history in an open sourced blockchain platform such as Ethereum and construct a huge network.
In such ecosystem, every node (address) owns certain amount of artificial token (ETH) that can be used to vote against certain issues. An example of quadratic voting (QV) system will be that a group of nodes, each given a fixed amount of token, jointly choose a collective good for themselves by paying quadratic cost for each vote. In this paper by the QV system creators, it states that collective decision rapidly approximates efficiency as the number of voters increases (as large as possible) – “In an independent private values environment, any type-symmetric Bayes-Nash equilibrium converges towards this efficient limiting outcome as the population grows large, with inefficiency decaying as 1/N”
Article link: https://medium.com/@VitalikButerin/liberation-through-radical-decentralization-22fc4bedc2ac
Paper link: https://arxiv.org/pdf/1409.0264.pdf