Bringing Privacy to DAO Voting

A deep dive into the realm of private voting in DAOs.

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In this edition of the Governance Series, we delve deep into the realm of private voting.

As the blockchain industry continually evolves, the importance of anonymity remains paramount. We'll explore the merits and challenges of private voting, its current implementations, and the promising advancements in this domain.

But first, a digest of impactful governance headlines.

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Arbitrum DAO Approves Funding for Pluralistic Grants Program

Arbitrum DAO has greenlit the allocation of 3.971 million ARB for the inaugural milestone of its Pluralistic Grants Program.

The initiative, designed to solidify Arbitrum's role as a leader in Ethereum scaling, will allocate funds for ecosystem development and collaboration with Plurality Labs.

This proposal signifies a proactive approach to nurture the Arbitrum ecosystem, emphasizing efficient and impactful fund allocation. The success of this pluralistic approach could serve as a model for other DAOs aiming to optimize their grant allocation procedures.

Grants funding in web3 is very popular, but projects have less accountability on how these funds are used. Disruption.joe, the author of the proposal has penned down a thought provoking forum post to discuss the challenges of the grants program.

The Impact of Private Voting in Aave Governance

Aave Governance embarked on a two-month experiment to assess the influence of private voting on its governance model.

Using off-chain Snapshot data, this report dives into general participation statistics to determine the efficacy of private voting. The user experience shift introduced by private voting is significant and warrants consideration when deciding its future in Aave Governance.

For a more detailed exploration into the concept and implications of private voting, refer to the Deep Dive below on Private Voting.

The Rook DAO Story: Postmortem of the $25M governance takeover

This event underscores the urgent need for robust security and governance mechanisms in DAOs. DAOs face threats not only from technical flaws but also from coordinated groups exploiting governance structures.

Rook DAO's downfall serves as a catalyst for the DAO community's introspection. The path forward for DAOs is evident: either bolster governance defenses or risk dissolution.

Vitalik's Take on Biometric Proof of Personhood Amid Worldcoin Launch

With Worldcoin's launch capturing global interest, Vitalik Buterin has chimed in with his perspective on biometric proofs of personhood.

Vitalik’s article delves deep into how such proofs, especially through iris scans, can combat spam and decentralize power. While acknowledging the privacy advantages, he also points out potential pitfalls.

Buterin’s recommendation? Enhancing these systems using advanced algorithms and multi-party computations. He champions a hybrid model, amalgamating various identity verification methods to strike a harmonious balance between decentralization, security, and privacy.

The digital identity landscape is witnessing a surge of independent projects aiming to tackle Web3's sybil challenges, especially as AI capabilities expand. The real breakthrough will emerge when these initiatives unite under a collective vision.

Gitcoin’s Passport stands out as a beacon, aggregating diverse solutions and staying true to this unified mission.

With the governance headlines out of the way, welcome to our Deep Dive on Private Voting in DAOs.

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Deep Dive: Bringing Privacy to DAO Voting

The unique feature of anonymity in the blockchain industry fosters a culture of sovereignty and privacy, allowing users to maintain a pseudonymous identity safe from censorship and surveillance.

While several projects are focusing on preserving privacy by establishing unique identities — a concept that could potentially instigate a 'one person - one vote' system — it's interesting to explore whether this anonymity could also be extended to make voting information private, thereby improving voter engagement and the quality of decisions made.

Most democratic countries' voting systems reveal results only after the voting period ends. It's worth considering whether DAOs should adopt this time-tested method. Although the context differs, implementing private voting could potentially have a positive impact on the ecosystem.

As the gold standard of decentralization moves towards on-chain voting and the code becomes the governing principle, it's crucial to approach DAO governance from a cross-disciplinary perspective. In this sense, private voting could indeed create significant impact. However, the merits of such a system will only be revealed through ongoing experimentation.

Balancing Strength and Vulnerability: Algorithmic Governance in DAOs

The cyberpunks were driven by a fear of surveillance and, with the help of cryptography, created this blockchain technology, now governed by DAOs.

Sybil attacks pose one of the biggest threats to blockchain protocols, as creating and tracking pseudonymous identities on the blockchain often leads to surveillance. This makes algorithmic governance both a strength and a vulnerability in the quest for participatory governance.

While privacy-preserving reputation tools aided by zk technology have been developed, voting stands out as a particular use case that has seen advancements in tools supporting private voting. Aiming to strike a delicate balance, algorithmic governance aims to foster inclusive and secure decision-making processes within DAOs.

Privacy Concerns in Existing Voting Methods

Existing voting methods, particularly token weighted voting, have been subject to extensive discussions and ongoing experimentation to enhance their robustness. However, one critical drawback that remains unaddressed is the lack of privacy.

Currently, voters can be surveilled based on their entire voting history, compromising their privacy. While voting history is crucial for delegate selection in platforms utilizing liquid democracy, voters prefer not to disclose their votes for decisions such as grants or contentious matters.

Furthermore, in situations where token holders are uncertain or a controversial vote arises, collusion by a minority group can sway the vote, influencing other token holders to follow suit. This compromises the quality of decision-making. Additionally, malicious actors, such as whales, may strategically wait until the voting period nears its end to purchase tokens and manipulate the vote in a different direction with malicious intent.

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Private Voting

Private voting, fundamentally, is a system where the individual voting choices are kept confidential during the voting process, and the cumulative results are only unveiled after the voting period concludes.

This mirrors traditional voting methods used in many democratic nations, and when implemented within the unique context of DAOs, it promises to address many issues inherent to conventional voting mechanisms. Private voting solutions leverage various technologies to ensure confidentiality and integrity. These include advanced cryptographic techniques like zero-knowledge proofs (ZKPs), threshold encryption, homomorphic encryption, and secure multi-party computation (MPC).

Enhancements and Considerations of Private Voting

Enhancements:

  1. Augmented Sovereignty: In harmony with the pseudonymous ethos of blockchain technology, private voting empowers voters to express their opinions without the fear of social repercussions or undue influences.

  2. Promoting Independent Thought: By concealing the vote count until the end of the voting period, private voting curtails the sway of early voting trends, thereby fostering an environment conducive to independent decision-making.

  3. Dissuading Manipulation: The confidential nature of private voting can deter last-minute manipulations by large token holders, resulting in a more democratic and balanced decision-making process.

Considerations:

  1. Balancing Risk and Autonomy: While private voting might embolden voters to make unconventional choices, it's crucial to strike a balance between fostering autonomy and averting reckless behavior.

  2. Combatting Apathy: Despite the potential of private voting, it's important to ensure that measures are in place to combat voter apathy. Every vote counts, and the process should reflect this ethos.

  3. Trust and Security: Implementing private voting necessitates robust, secure systems. Voters need to have faith that their votes remain confidential and tamper-proof until the end of the voting period.

Private Voting Applications and Research in DAOs

The "Private Voting Research Sprint" was a funded initiative by NounsDAO, supporting three teams in developing private voting solutions. Each team was granted 70K USDC for three months to create designs, analyze benefits and limitations, and develop a working proof-of-concept, all contributing to the open-source community.

Now, let's delve into the selected proposals.

Aragon and Aztec Proposal

Aragon and Aztec come together to exploit recent advancements in zero-knowledge (ZK) technologies. They propose a one-step voting process for NounsDAO NFT holders that ensures voter privacy and maintains fairness in vote tallying. This innovative approach disallows linking a voter with their vote and prevents early vote count, thereby prioritizing user experience while preserving privacy. They suggest a phased execution over three months, during which they aim to construct an industry-leading solution that balances the unique requirements and trade-offs of NounsDAO. Although native multisig support isn't included in their initial offering, they plan to integrate it later.

DeFROST Proposal

DeFROST introduces a custom cryptographic scheme to fulfill Nouns DAO's private voting requirements. This scheme delivers a user experience nearly identical to the current public voting mechanism of the DAO, with voting and tallying carried out entirely on Ethereum. Notably, DeFROST enables direct voting using multisig without the need for delegation, while also supporting delegate voting. Upon voting completion, a DAO-selected committee triggers on-chain tallying, adding an extra layer of security and integrity to the process.

Nouns Vortex Proposal

The Nouns Vortex proposal suggests a multi-layered approach to secure on-chain voting for the Nouns DAO. At the core of their proposal is a system that combines a base layer of voting, a secrecy committee of tallying authorities, and a proving pool for efficient gas usage. Their solution emphasizes modularity, auditability, and minimal dependence on off-chain infrastructures. Key rotation and vote enforcement mechanics provide an additional layer of control and security. The team's goal is to create a user-friendly and efficient voting system that aligns with the principles and needs of Nouns DAO.

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Shielded Voting

Shielded voting, live on Snapshot, uses Shutter Network's threshold encryption to maintain privacy during DAO voting. Voters' choices are hidden throughout the voting period, revealing only when the proposal closes, thereby minimizing voting bias. Space admins or controllers can activate shielded voting by selecting Shutter as the privacy option in the settings. This change applies to all subsequent proposals, ensuring a secure and fair voting environment. Please note that this feature is currently in beta testing, and improvements are being made continually.

Aave has tried out shielded voting for updating risk parameters, and Snapshot, which itself is a DAO, is testing out shielded voting.

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The adoption and growth of private voting will depend on the growth of zero-knowledge proofs, as well as web3's cultural vision of privacy and personal sovereignty.

Although private voting has been successful in the real world, its success may not be replicated for all decisions in the digital realm. As with any new technology in crypto, private voting will require continuous experimentation to see if it works in the benefit of web3.

Despite the challenges, private voting has the potential to be a valuable tool for improving the governance of DAOs. By allowing voters to cast their votes in private, private voting can help to create a more democratic and inclusive decision-making process.

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