While I appreciate the argument that we don’t want to go out of our way to cater to speculators, I don’t think it’s economically or game-theoretically sound to ask people to ignore their own best interests so they can use their voting power. Various platforms are offering ways to earn by holding ENS tokens, whether we like it or not; if we cannot register those votes, we will miss out on a lot of participation that we might otherwise get.
The broader issue in my mind is similar to that of paying governance participants for their time and effort: If you don’t, the only people who participate are those who are particularly engaged and have the money and leisure time to do it without compensation - which is great, but we can’t and shouldn’t rely exclusively on the philanthropy of rich people - and those who have external motivations such as lobbyists. The same applies to reserving voting power for those who can afford to just let their tokens sit.
From a practical POV, there are two venues, onchain and off, and two orthogonal sets of problems.
Onchain, a token needs to support delegation and checkpoints in order to vote with it. It’s unlikely any LP or stake tokens will do this, so if we want to retain the current onchain governance mechanism, these tokens would need to be wrapped (again!) in order to be able to vote. There would of course be gas costs involved in wrapping your tokens again, but at least then it would be possible to both stake and vote onchain.
Offchain, we can avoid the need for this using cleverly written Snapshot strategies and/or subgraphs that count the tokens directly, but that will lead to a difference between onchain and offchain representation, which is likely to cause its own problems.
The other set of problems is around how to count votes in different types of instrument. With LP tokens, there are two obvious options: Offer them 1 vote per $ENS held by the LP token, or offer them the voting power of the entire position in $ENS. The logic behind the latter option is that they have the entire position locked up against $ENS, but personally I find the former option more reasonable.
With staking tokens like AAVE, things are more complicated, because the platform permits leverage. If we simply accorded each $AENS the same voting power as $ENS, someone could do the following:
- Deposit 1,000 $ENS for 1,000 $AENS. Voting power = 1,000.
- Borrow 500 $ENS using their deposit as collateral. Voting power = 1,500.
- Deposit the 500 $ENS for another 500 $AENS. Rinse and repeat.
The result is that if someone can borrow against half the value of their $ENS, they can end up doubling their voting power using this mechanism.
One solution would be to accord each $AENS power proportional to the reserve percentage in AAVE; if there are 1000 ENS deposited and 800 on loan, each $AENS is only worth 0.2 $ENS. This conserves the total voting power of $ENS, but still allows someone to leverage to increase their voting power relative to other AAVE participants.
Are there other options? I’m curious to hear peoples’ thoughts.