1.
Minnows vs. Whales
Can quadratic voting bridge the gap?
DAO Governance
Shawn16400.eth https://twitter.com/shawnlgrubb

2.
Who am I and what do I know about Governance?

3.
Who am I and what do I know about Governance?
DYOR

4.
Why am I talking here:

5.
Why am I talking here:
1. Old world and the new world 2. Hierarchy and network
3. MBA vs DAO thinking 4. Voting mechanisms 5. Quadratic voting

6.
The old way:
Objective:
shareholder
wealth
Decisions are
handed down
Knowledge is
protected

7.
The new way:
Objective:
stakeholder
returns
Decisions are
communal
Knowledge is
shared

8.
•Traditional Business
•Objective: build shareholder wealth
•Intellectual property is protected
•Decisions are top-down
•Employees are retained
•Challenge to engage employees
•Regionally managed workforce
•Clear reporting lines
•Responsibilities and jobs are assigned
•Initiative is rewarded
•DAOs
•Objective: deliver stakeholder results
•Intellectual property is shared
•Community makes decisions
•Contributors are voluntary
•Challenge to direct passion
•Globally sourced contributors
•Choose whom you work with
•Choose what you want to work on
•Initiative is the cost of entry

9.
•Traditional Business
•Objective: build shareholder wealth
•Intellectual property is protected
•Decisions are top-down
•Employees are retained
•Challenge to engage employees
•Regionally managed workforce
•Clear reporting lines
•Responsibilities and jobs are assigned
•Initiative is rewarded
•DAOs
•Objective: deliver stakeholder value
•Intellectual property is shared
•Community decides direction
•Contributors are voluntary
•Challenge to direct passion
•Globally sourced contributors
•Choose whom you work with
•Choose what you want to work on
•Initiative is the cost of entry

10.
Hierarchy (old) vs.
The network (new)

11.
“go build and sell 1 million widgets
in Q2”

12.
“go build and sell 1 million widgets
in Q2”
Sir.
Yes Sir!

13.
“go build and sell 1 million widgets
in Q2”
?!?
?!?
?!?
Sir.
Yes Sir!
wth?!?

14.
“go build and sell 1 million widgets
in Q2”
?!?
?!?
?!?
Sir.
Yes Sir!
wth?!?
Is this a clear directive?

15.
“go solve climate change”
?!?
Is this a clear directive?

16.
Build a
widget
factory
Build a
widget
Team effort
Complexity Challenge Matrix
Complex:
(undefined, ambiguous
and no solution)
Complicated:
(many moving parts, but
can be defined and
understood)
Simple:
(clearly defined,
understood, and solutions
are present)
Multi-
organizational
effort
Multi-
functional
effort
Solve
climate
change

17.
Build a
widget
factory
Build a
widget
Team effort
Complexity Challenge Matrix
Complex:
(undefined, ambiguous
and no solution)
Complicated:
(many moving parts, but
can be defined and
understood)
Simple:
(clearly defined,
understood, and solutions
are present)
Multi-
organizational
effort
Multi-
functional
effort
Solve
climate
change

18.
Build a
widget
factory
Build a
widget
Team effort
Complexity Challenge Matrix
Complex:
(undefined, ambiguous
and no solution)
Complicated:
(many moving parts, but
can be defined and
understood)
Simple:
(clearly defined,
understood, and solutions
are present)
Multi-
organizational
effort
Multi-
functional
effort
Solve
climate
change

19.
https://www.reliantsproject.com/2020/06/14/concept-8-metcalfes-law-and-network-effects/
“solve climate change”
1. Who goes first?
2. Who provides ideas?
3. Who provides feedback?
4. Who is involved in decisions?
You are
here! (node)

20.
https://www.reliantsproject.com/2020/06/14/concept-8-metcalfes-law-and-network-effects/
“solve climate change”
1. Who goes first?
2. Who provides ideas?
3. Who provides feedback?
4. Who is involved in decisions?

21.
https://www.reliantsproject.com/2020/06/14/concept-8-metcalfes-law-and-network-effects/
“solve climate change”
1. Who goes first?
2. Who provides ideas?
3. Who provides feedback?
4. Who is involved in decisions?
You are
here! (node)

22.
https://www.reliantsproject.com/2020/06/14/concept-8-metcalfes-law-and-network-effects/
“solve climate change”
1. Who goes first?
2. Who provides ideas?
3. Who provides feedback?
4. Who is involved in decisions?

23.
https://www.reliantsproject.com/2020/06/14/concept-8-metcalfes-law-and-network-effects/
“solve climate change”
1. Who goes first?
2. Who provides ideas?
3. Who provides feedback?
4. Who is involved in decisions?

24.
https://www.reliantsproject.com/2020/06/14/concept-8-metcalfes-law-and-network-effects/
“solve climate change”
1. Who goes first?
2. Who provides ideas?
3. Who provides feedback?
4. Who is involved in decisions?

25.
https://www.reliantsproject.com/2020/06/14/concept-8-metcalfes-law-and-network-effects/
“solve climate change”
1. Who goes first?
2. Who provides ideas?
3. Who provides feedback?
4. Who is involved in decisions?

26.
Your typical Jesuit business school:
The point of business is to “deliver
better than average shareholder
returns”.
MBA Thinking:
Aka: “maximize investor returns”
Golden Rule: he with the most gold - rules

27.
Your typical web3 DAO:
The point of the DAO is to “deliver
better than average stakeholder
returns”.
Your typical Jesuit business school:
The point of business is to “deliver
better than average shareholder
returns”.
MBA Thinking: DAO Thinking:
Aka: “maximize investor returns” Aka: “maximize stakeholder returns”
Golden Rule: he with the most gold - rules

28.
Your typical web3 DAO:
The point of the DAO is to “deliver
better than average stakeholder
returns”.
Your typical Jesuit business school:
The point of business is to “deliver
better than average shareholder
returns”.
MBA Thinking: DAO Thinking:
Aka: “maximize investor returns” Aka: “maximize stakeholder returns”
investor
Golden Rule: he with the most gold - rules

29.
Your typical web3 DAO:
The point of the DAO is to “deliver
better than average stakeholder
returns”.
Your typical Jesuit business school:
The point of business is to “deliver
better than average shareholder
returns”.
MBA Thinking: DAO Thinking:
Aka: “maximize investor returns” Aka: “maximize stakeholder returns”
investor customers
Golden Rule: he with the most gold - rules

30.
Your typical web3 DAO:
The point of the DAO is to “deliver
better than average stakeholder
returns”.
Your typical Jesuit business school:
The point of business is to “deliver
better than average shareholder
returns”.
MBA Thinking: DAO Thinking:
Aka: “maximize investor returns” Aka: “maximize stakeholder returns”
investor
contributor
customers
Golden Rule: he with the most gold - rules

31.
Your typical web3 DAO:
The point of the DAO is to “deliver
better than average stakeholder
returns”.
Your typical Jesuit business school:
The point of business is to “deliver
better than average shareholder
returns”.
MBA Thinking: DAO Thinking:
Aka: “maximize investor returns” Aka: “maximize stakeholder returns”
investor
supplier
contributor
customers
Golden Rule: he with the most gold - rules

32.
Your typical web3 DAO:
The point of the DAO is to “deliver
better than average stakeholder
returns”.
Your typical Jesuit business school:
The point of business is to “deliver
better than average shareholder
returns”.
MBA Thinking: DAO Thinking:
Aka: “maximize investor returns” Aka: “maximize stakeholder returns”
investor
community
supplier
contributor
customers
Golden Rule: he with the most gold - rules

33.
Your typical web3 DAO:
The point of the DAO is to “deliver
better than average stakeholder
returns”.
Your typical Jesuit business school:
The point of business is to “deliver
better than average shareholder
returns”.
MBA Thinking: DAO Thinking:
Aka: “maximize investor returns” Aka: “maximize stakeholder returns”
investor
environment
community
supplier
contributor
customers
Golden Rule: he with the most gold - rules

34.
Your typical web3 DAO:
The point of the DAO is to “deliver
better than average stakeholder
returns”.
Your typical Jesuit business school:
The point of business is to “deliver
better than average shareholder
returns”.
MBA Thinking: DAO Thinking:
Aka: “maximize investor returns” Aka: “maximize stakeholder returns”
investor
environment
community
supplier
contributor
customers
Golden Rule: he with the most gold - rules

35.
http://redpanels.com/?n=Democracy
Issues with voting mechanisms…

36.
http://redpanels.com/?n=Democracy

37.
http://redpanels.com/?n=Democracy

38.
http://redpanels.com/?n=Democracy
Tyranny of the majority

39.
Examples: Local elections, Club
president, school board members,
1 Person 1 Vote
Here here!

40.
Examples: Local elections, Club
president, school board members,
Examples: shareholder votes,
preferred shares, Defi, many DAOs
1 Person 1 Vote Weighted Voting
Here here!

41.
Examples: Local elections, Club
president, school board members,
Examples: shareholder votes,
preferred shares, Defi, many DAOs
1 Person 1 Vote Weighted Voting
yaaaay!

42.
Examples: Local elections, Club
president, school board members,
Examples: shareholder votes,
preferred shares, Defi, many DAOs
1 Person 1 Vote Weighted Voting
WTF?

43.
Minnow Whale
~120 XYZ
$180
1.8M to 150k XYZ

44.
Minnow Whale
~120 XYZ
$180
1.8M to 150k XYZ
My vote
doesn't
matter
DAO Voter apathy:
- Underrepresentation
- Disenfranchisement
- Disengagement

45.
https://www.reliantsproject.com/2020/06/14/concept-8-metcalfes-law-and-network-effects/
“solve climate change”
1. Who goes first?
2. Who provides ideas?
3. Who provides feedback?
4. Who is involved in decisions?

46.
How do we begin to
hold tension between
all these stakeholders?
work to connect with both sides?

47.
Minnows v. Whales
Proposal: In Season 1 - Whales will eat the minnows
2M Tokens
@ $2
1000 Tokens
@ $2

48.
Minnows v. Whales
Proposal: In Season 1 - Whales will eat the minnows
2M Tokens
@ $2
you
1000 Tokens
@ $2

49.
Minnows v. Whales
Proposal: In Season 1 - Whales will eat the minnows
2M Tokens
@ $2
you
1000 Tokens
@ $2
#@%$#!!

50.
Minnows v. Whales
Proposal: In Season 1 - Whales will eat the minnows
2M Tokens
@ $2
you
1000 Tokens
@ $2

51.
Minnows v. Whales
Proposal: In Season 1 - Whales will eat the minnows
2M Tokens
@ $2
you
1000 Tokens
@ $2

52.
Minnows v. Whales
Proposal: In Season 1 - Whales will eat the minnows
2M Tokens
@ $2
you
1000 Tokens
@ $2
#@%$#!!
#@%$#!!

53.
Minnows v. Whales
Proposal: In Season 1 - Whales will eat the minnows
2M Tokens
@ $2
you
1000 Tokens
@ $2

54.
Minnows v. Whales
Proposal: In Season 1 - Whales will eat the minnows
2M Tokens
@ $2
you
1000 Tokens
@ $2

55.
Minnows v. Whales
Proposal: In Season 1 - Whales will eat the minnows
2M Tokens
@ $2
you
1000 Tokens
@ $2

56.
Minnows v. Whales
Proposal: In Season 1 - Whales will eat the minnows
2M Tokens
@ $2
you
1000 Tokens
@ $2
#@%$#!!

57.
Quadratic
Voting:
It's not all
rainbows and
bunny rabbits
● Transparency and Information symmetry are
required - When there is a minority with
superior information opposed to the majority, it
can expend resources to take the election.
● Proof of personhood is needed to avoid one
person splitting themselves into multiple
instances (sybil attack)
● Could be more sensitive to manipulation in
smaller populations

58.
Quadratic voting is an
attempt to hold tension
between minnows and
whales
—-----------------
Whales are still whales,
But minnows have
hope

59.
https://www.reliantsproject.com/2020/06/14/concept-8-metcalfes-law-and-network-effects/
“solve climate change”
1. Who goes first?
2. Who provides ideas?
3. Who provides feedback?
4. Who is involved in decisions?

60.
Thank you!
Shawn Grubb
About speaker:
Gitcoin DAO Governance
Presentation topic:
Minnows v. whales: Quadratic Governance to the rescue
More about presentation:
An illustration of why token weighted voting is dangerous for
the DAO and how quadratic voting is a viable mechanism to
level the playing field. This presentation will give the
participant a clear understanding of quadratic voting, how it
can be applied to single choice voting, the risks and benefits
of using the method, and what it can do for the DAO and
voter engagement.
https://twitter.com/gitcoin/status/1615322825086357504?s=20&t=WkeN1kSqDmHJUxXv0ONi3w

61.
Links:
In order of appearance
Shawn16400 on twitter
Excited to join @camp_dao today to discuss Quadratic Voting and the DAO battle between
Minnows and Whales. Here is the presentation and docs shared:
https://docs.google.com/presentation/d/1xwVB-4cLC90XoYllykal882nyH5Zz7Ji0effw2GebHQ/edi
t?usp=sharing
https://miro.com/app/board/uXjVP2DZJt0=/
https://miro.com/app/board/uXjVPZQaKMk=/
https://www.economist.com/interactive/2021/12/18/quadratic-voting
https://twitter.com/gitcoin/status/1615322825086357504?s=20&t=WkeN1kSqDmHJUxXv0ONi3w

62.
Sources
https://www.reliantsproject.com/2020/06/14/concept-8-metcalfes-law-and-network-effects/
https://www.reliantsproject.com/2020/06/14/concept-8-metcalfes-law-and-network-effects/
https://heinonline.org/HOL/LandingPage?handle=hein.journals/rutlr1
9&div=19&id=&page=
https://en.wikipedia.org/wiki/Voting_in_the_Council_of_the_Europea
n_Union
https://www.pginvestor.com/stock-information/ownership/default.aspx