NFTs for Voting

🌱 Ideas
#1

We are looking for systems that enable one person- one vote methods that can’t get dominated by whales buying up all the tokens. An initial idea around this:

Proof of humanity and other similar tech (BrightID, Idena) enable a wallet address to be tied to a singular person. Gating the purchase of an NFT through one of these proof of humanity techs (token or ID has to be entered) can enable only one person to only be able to buy one NFT. The NFT contract can be similar to Unlock Protocol or one that is non-transferable (cannot be sold).
One of the reasons governance rights get distributed is through the selling of them, which enables DAOs to initially get off the ground. Investors are looking to get paid back for the money they spent. Larger investments are often thought to have bigger rewards. To pay back for investment, these NFTs can have profit sharing tokens sent to them- through superfluid. Profit sharing tokens share the revenue that the organization is creating to the holders of the NFT. Based on the size of the investment the bigger the stream. These profit sharing tokens can be used for conviction voting or other voting techniques that require the person to stake tokens.
The particular organization that I am creating is about funding regenerative actions (ie. ecosystem regeneration) and measuring and verifying that the actions have occurred. Best practices for regenerating ecosystems differ by location. Based upon this localized knowledge, those with that knowledge- ie. those living closer to the area being regenerated should have a higher vote weighting. Location of the NFT holder could be coded into the NFT when the NFT is bought. Though the NFT holder will likely move in their life. When they do so the location embedded into the NFT should change. So to ensure that NFT holders don’t change location to get higher voting on a proposal. The location change for the NFT holder should last longer than the time of relevant proposals to be passed (maybe like a year).
Allowing investors to buy NFTs that have governance rights might mean that none of these investors actually govern (vote) on DAO matters. One possible way to discourage this behavior could be to burn the NFT if the holder is inactive in voting.

Looking forward to ideating further on this subject.

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#2

These same NFTs could potentially be used by other DAO organizations, by potentially nesting NFTs into each other (Charged Particles comes to mind). This could show affiliations of the holder.
As the holder of the NFT participates in governance and elsewhere (measuring contributions through tools like Coordinape, SourceCred) the NFT could potentially update to show reputation of the individual and the value that the individuals contribution has brought.

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#3

There’s an interesting challenge to NFT voting (and mitigating plutocratic governance in general), apart from the actual implementation of a functional model, which is that a much of the power to raise capital and to offer upside opportunity to community comes from the demand for a DAO’s native token as governance power. If you remove the ability for people to buy governance power then you remove much (in some cases, all) of the demand for a DAO’s native token, which cripples the economic narrative for many projects. One can definitely argue whether that narrative is healthy to begin with but the ability for a DAO to mint a native token and incentivize contribution is an important part of what makes DAOs powerful, imo. Without free market demand fo the token, a DAO can’t viably use it as an incentive to contributors. That being said. as we move away from plutocratic governance, we may be entering a phase where DAOs have to try a little harder to build real utility into their tokenomics if they want to have a viable economic model that includes a native token. This profit sharing model looks interesting.

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#4

Definitely, current DAO models often are only able to get funds through the sale of the DAO token. With a DAO NFT that is non-transferrable, the investor has to be very confident about the revenue streams the DAO has. Incentivizing contributions could be done with the profit sharing token that is getting streamed to the NFTs (through the revenue being generated). If that profit sharing token is unique for each DAO it might act similar to what DAO tokens are now, without the governance rights (as these tokens would be able to traded in the market).

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#5

Speculation can be toxic but it can also be an important way for the public to show their support for a particular project (or signal failure modes) and incentivize the market to think deeply about a particular idea. Is there any room for speculation on a DAO’s future success if they are using this NFT gov/profit share token model? With one NFT per person, would there be programatic qualities of each NFT that reflect how large the investment has been (increasing the profit token stream)? Is it a one time deal or can you continue to invest more? If you invest more to get more stream then it would lock in a sort of one-way speculation where you can only buy into a project but never sell. Seems akin to buying a stock that you can never sell for the opportunity to collect dividends on your shares. Interesting how the market seems to be moving away from the desire for dividends and toward speculation on equity upside. This would have to flip that narrative entirely. It may be an uncomfortable proposition to own equity in a project that you’re locked into for life!

#6

Hmm… also may be disadvantage a project to have to regularly send out its profit stream rather than being able to hold and reinvest. :thinking:
What keeps a project accountable to reporting revenue as profit if it could instead just mark up its operating expenses or R&D and not have to send that money out to NFT holders?

#7

I believe @billyjitsu was working on or thinking of working on an NFT tied to a superfluid stream.

And @willjgriff was working on a Gardens DAO was using NFTs for voting rights.

Any progress on either of those?

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#8

Sir:
My last hackathon project : Vidyard Recording

bootstrap DAO’s to sell their token for Eth or whatever. Now you limited sell pressure with vested stream over time… you can then invest or pay with gained eth… slowing down sell pressure.

As for using it as a garden… there are issues when you wrap the token itself.
Also, look into the new SOULBOUND NFT by brightID (released 12 hours ago) . A tied to identity vs wallet. I helped pitch in with that project as well. 1 brightID = 1 NFT

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#9

Like the thought of being able to invest more to increase profit token stream at any time. Would think that at some point the profit sharing token streamed to a NFT holder would surpass the amount invested. At that point, after (once it has 10x etc. the initial investment) or potentially before the NFT holder could become inactive in governance and get their NFT burned, essentially burning the equity they have in the project (not locking in for life).

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#10

Would think it would only be a percent of the profit stream that would get streamed, not the entirety of it. The percentage distributed via the profit sharing stream of the revenue generated could be coded through smart contracts, enabling immediate distribution from the instance of revenue generation to revenue distribution.

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#11

It seems that with Vidyard and the Soulbound NFT there is a good start to this type of system. Are the Soulbound NFTs non-transferable? Vidyard streams DAO tokens (seemingly governance tokens), what are your thoughts on profit sharing token model and being able to increase streams based upon amount invested? Location and NFT nesting could be features later down the line. Looking forward to hearing thoughts and what could make these ideas realistic.

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#12

this is my thought of what could happen. User mint an NFT… get stream… DAO uses those funds to invests… (example 10%). 5% goes to stream back to contract that stream… 5% kept by the Dao… goes on indefinitely until the stream can no longer keep up with the return… in which the stream can be voted to change to keep it going… etc

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#13

BrightID soulbound NFTs are non transferable to wallets not tied to your BrightID identity… and are rescue able if your wallet gets hacked.

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#14

Maybe we can write a proposal to 1hive around this, get some funding and have it be part of 1hive?

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#15

I’ve been doing it on my own for a while now, if 1hive is interested in it I’d probably get a retroactive deal going if that even comes up.

Adding IDchain to the mix, I think would be something BrightID would be interested in having a package. There are a few more kinks to work out on that side as well.

Personally, if 1hive were to fund it… I would feel indebted to that. I like the option of taking the project anywhere and anyhow I want currently… Currently working with BrightID team on the soulbound (literally just deployed less than 24 hours ago) and few lucky winners will get a beta test of the streaming NFT of $Bright. There are some other DAOs semi interested when they see what I’ve been playing with. Not sure exactly how it would be generative just yet.

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#16

I know the DAO that I helped to found Avano (old name Akorn, Intro Video) would be interested in this. Totally understand the want to be independent and how accepting funding from 1hive could create a feeling of indebtedness. Wonder on that, if creating a plugin that could be utilized with 1hive or other DAO tools (Aragon, Colony, etc.) of what you are creating could enable more of that anywhere, anyhow sense. Could see many different organizations wanting to support the development of this type of tool/ plugin. From my side it would be great to have this available ASAP, if financial support (without indebtedness) could enable that or quicken the process would be happy to help on proposals. There are many ways in which can see the NFT functionality evolving (such as adding IDchain) but also from the plugin side. By working with 1hive and other DAO tools it can enable more diverse thoughts to come in as to how this tool could work or be bettered by the other DAO tools out there. Congratulations on the launch of Soulbound and looking forward to whatever comes next. Also interested in hearing @paul 's perspective on this.

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#17

It still in early phases of how it works but the framework is there. I actually want to test run it live with a small amount of money soon to see how people take advantage and human nature of how people respond to it. The contract needs to be hardened and also audited. If there are other Devs that would like to collaborate, more than happy to work together for that as well. As for a we fund you… I build, funders reap the rewards… not my purpose. If that makes sense. It will be opensource regardless, I’m using it as reason to learn and I think it’s pretty cool. If it becomes a thing, I get to benefit from the idea and the work

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#18

Can definitely see the great framework you have built :slight_smile: Looking forward to the testrun. Totally understand the, I build funders reap the rewards problem. Think there is potential from 1hive and other orgs to fund this via grant (where there is not much/ nothing expected in ROI). The other orgs could potentially be a great source for developers wanting to collaborate. Do you have a profile on Gitcoin for this?

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#19

Just watched the Fluidity video from the Vidyard link - VERY cool stuff!

Once it’s tested and audited it seems usable for 1Hive / Gardens out of the box. Is there gonna be an interface for updating the NFT contract, or for the MVP does that need someone familiar with editing contracts?

If you raised HNY in a 1Hive proposal I don’t see why that would change the direction for the tool. You’re building an organizational app useful to Gardens as it is, so it’s in line with what 1Hive wants to fund. I’m sure you know you can raise $ through Gitcoin and Giveth too. There’s also grant funding available from Gnosis Chain Innovation DAO which has funded bringing new tools onto Gnosis Chain.

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