DAO Voting Schemes Explained, Token Based vs Quadratic vs Delegation, Advantages and Disadvantages 2025

Token Based Quorum Voting

Token-based quorum requires minimum participation before proposals pass. Compound demands 400,000 votes minimum. Lido needs 5% of LDO supply voting yes. Uniswap requires 40 million yes votes for approval. The side with most votes wins after reaching quorum.

Advantages: Simple to understand and implement. Transparent on-chain verification. Encourages broad participation through minimum thresholds. Proportional to token holdings creates alignment between financial stake and governance influence. Prevents small groups from making decisions alone.

Disadvantages: Quorum thresholds block most proposals when participation stays low. Average DAO participation sits at 17% in 2025. High quorums cause governance paralysis. Low quorums enable whale manipulation. Large holders control outcomes through sheer token volume. Setting correct threshold remains difficult. Voter apathy worsens over time as proposal volume increases.

Research from 2025 shows large voters always vote with greater probability than small voters. Small voters abstain when large holders vote with certainty. Mechanisms designed to mitigate large holder influence show minimal effect on small voter participation.

Used by: Compound, Uniswap, Lido, MakerDAO, Aave. Approximately 60% of DAOs employ token-based quorum as primary mechanism.

Token Based Voting Participation Challenge

Data: Coinlaw.io 2025, SSRN Token-Based Voting Research 2025

Simple Majority Voting

Simple majority requires over 50% of votes cast to approve proposals. No minimum participation threshold exists. One member can pass proposals if others abstain. The straightforward process makes decisions quickly.

Advantages: Fast decision-making without waiting for quorum. Easy to understand for all participants. Low operational costs. Works efficiently for routine decisions. Enables quick adaptation to market changes. No complex calculations required.

Disadvantages: Single large holder can dominate when others do not participate. Does not measure intensity of preference. Minorities lack protection from majority decisions. Encourages tactical voting behaviors. Creates winner-take-all outcomes. Low participation makes results unrepresentative of broader community.

MakerDAO uses simple majority for many governance decisions. This allows rapid adaptation to DeFi market conditions. The mechanism works when proposals lack controversy. Contentious changes require different approaches.

Used by: MakerDAO (routine decisions), smaller DAOs prioritizing speed. Works best for non-controversial proposals affecting daily operations rather than fundamental protocol changes.

Supermajority Voting

Supermajority requires 66%, 75%, or higher approval before passing proposals. This higher threshold protects against contentious changes. Used for decisions with major protocol impact.

Advantages: Ensures broad consensus before major changes. Reduces risk of divisive outcomes. Protects minority stakeholders from majority overreach. Creates legitimacy for fundamental protocol modifications. Prevents hasty decisions during volatile periods.

Disadvantages: Makes passing any proposal extremely difficult. Creates governance gridlock when communities disagree. Maintains status quo even when change becomes necessary. Empowers minority to block progress. Slows response to urgent situations. Increases coordination costs to reach required threshold.

Best suited for constitutional changes like tokenomics modifications or treasury fund allocation above certain amounts. Snapshot approval rates for critical proposals average 85% compared to 96.8% for routine decisions. The gap shows supermajority requirements function as intended filter.

Used by: Protocol upgrades in major DAOs, treasury decisions above $1M threshold, changes to governance rules themselves. Approximately 15% of all DAO votes require supermajority approval.

Quadratic Voting

Quadratic voting increases cost exponentially for additional votes. First vote costs 1 token. Second costs 4 tokens. Third costs 9 tokens. Fourth costs 16 tokens. This prevents whales from dominating through pure token volume.

Quadratic Voting Cost Escalation

Data: Colony.io DAO Mechanisms 2024

Advantages: Reduces whale power substantially. Captures intensity of preference beyond binary yes/no. Enables minority voices when they feel strongly about issues. Makes vote buying prohibitively expensive. Encourages honest voting rather than strategic behavior. Shows nuanced community sentiment.

Disadvantages: Complex for new members to understand. Requires identity verification to prevent Sybil attacks. One person with multiple wallets undermines entire mechanism. Implementation demands sophisticated infrastructure. Calculating optimal vote distribution creates cognitive burden. Privacy concerns from identity requirements.

Adoption grew 30% in 2025 compared to previous year. Shiba Inu Doggy DAO deployed quadratic voting in August 2025. Proposal creators choose between staking, token, or quadratic methods per proposal. Gitcoin uses quadratic funding for public goods allocation successfully.

The main barrier remains identity verification. Decentralized identity solutions like Soulbound Tokens offer partial answers but lack universal adoption. Over 200 DAOs implement DID systems as of 2025.

Used by: Gitcoin, Shiba Inu DAO, experimental governance frameworks. Approximately 12% of DAOs offer quadratic voting as option in 2025.

Votes Cast	Token Cost	Cumulative Cost	Marginal Cost
1	1	1	1
2	4	4	3
3	9	9	5
4	16	16	7
5	25	25	9
10	100	100	19

Quadratic voting formula: cost = votes²

Conviction Voting

Conviction voting weighs votes by time commitment. Longer a vote remains unchanged, stronger it becomes. Voting power increases gradually toward maximum threshold. Members switch votes anytime but sacrifice accumulated weight.

Advantages: Prevents last-minute voting attacks. Rewards sustained commitment over temporary influence. Enables continuous funding rather than batch decisions. Reduces governance overhead. Aligns long-term interests with voting power. Makes coordination attacks difficult.

Disadvantages: Extremely slow decision-making process. Not viable for urgent situations. Complex mechanism confuses new participants. Difficult to predict when proposals will pass. Early voters gain disproportionate influence. Requires constant monitoring to maintain voting position.

Used primarily for public goods funding and grant allocation. 1Hive and Commons Stack deploy conviction voting for continuous treasury distribution. The mechanism suits contexts where decisions lack urgency but require genuine community support.

Time-weighted systems create natural filtering. Only proposals with sustained backing receive funding. This reduces spam and frivolous proposals compared to binary voting periods.

Used by: 1Hive, Commons Stack, Gardens framework. Approximately 8% of DAOs implement conviction voting in 2025, primarily for funding decisions rather than protocol governance.

Delegated Voting and Liquid Democracy

Delegation lets token holders assign voting power to trusted representatives. Delegates vote on behalf of assigners. Members revoke delegation anytime. This creates expertise-based governance without sacrificing token holder control.

Advantages: Increases participation rates substantially. Enables expertise-based decisions. Reduces cognitive burden on passive holders. Maintains democratic accountability through revocable delegation. Scales governance as community grows. Flexible assignment by topic or delegate.

Disadvantages: Concentrates power in delegate hands. Creates opportunities for collusion among top delegates. Delegates may not accurately represent assigners. Low accountability for delegate actions. Vote selling becomes easier. Strategic non-participation by delegates to avoid controversial positions.

MakerDAO proxy delegates control 9.16% of voting power individually. Research shows delegation pathways must maintain accountability mechanisms. Top delegates consolidate disproportionate power through opaque networks. This enables governance influence extraction without robust oversight.

ENS, MakerDAO, and Optimism use delegation extensively. Approximately 35% of major DAOs offer delegation as primary or secondary mechanism. SNS DAOs on Internet Computer implement topic-specific delegation allowing expertise matching.

Best practices include: transparent delegate platforms, regular delegate reporting requirements, easy revocation processes, competitive delegate elections, minimum participation requirements for delegates.

Used by: ENS, MakerDAO, Optimism, Compound, SNS DAOs. Most effective when combined with transparent delegate accountability systems. For exploring how various DAOs implement delegation, see this list of DAOs.

Multi Signature Voting

Multi-signature requires predetermined number of authorized signers approving proposals. Example: 6 of 9 signers must approve before execution. Provides balance between decentralization and operational efficiency.

Advantages: Fastest decision mechanism available. Essential for emergency responses. Prevents single point of failure. Lower gas costs than full community votes. Can act within hours rather than weeks. Trusted signer group enables complex technical decisions.

Disadvantages: Centralizes control in signer group. Contradicts decentralization principles. Requires trust in predetermined individuals. Signer collusion enables unauthorized actions. Community lacks direct input on decisions. Becomes oligarchy without broader accountability mechanisms.

Approximately 45% of DAOs use multi-sig as backup governance layer. Yearn Finance and Safe wallets popularized this approach. Most effective when combined with community voting for non-urgent decisions.

Common implementations: 3 of 5 signers for small treasuries, 5 of 9 for medium protocols, 7 of 12 for major platforms. Signer rotation and transparency reduce centralization concerns. Time-locks provide community override opportunities.

Used by: Yearn Finance, Sushiswap, most DAO treasuries. Serves as emergency governance when speed matters more than broad participation. Best combined with community voting for routine decisions.

Rage Quit Voting

Rage quit allows minority voters to exit DAO with proportional treasury share if they oppose passed proposals. Grace period after voting enables withdrawal before proposal execution. Protects minority rights.

Advantages: Protects minority stakeholders from majority tyranny. Reduces contentious decisions. Creates economic incentive for majority to consider minority concerns. Enables peaceful disagreement resolution. Aligns with voluntary association principles.

Disadvantages: Extremely long governance process. Adds weeks to simple decisions. Reduces treasury stability as members exit. Creates uncertainty during grace periods. May fragment community over minor disagreements. Makes coordinated action difficult.

Moloch DAO pioneered rage quit mechanism. Proposal sponsorship combined with grace period creates security. Members reconsider support during grace period. Proposals lacking sustained backing get discarded.

Most effective for investment DAOs where capital allocation creates strong disagreements. Less suitable for protocol governance requiring coordinated upgrades.

Used by: Moloch DAO, DAOhaus framework. Approximately 8% of DAOs implement rage quit in 2025. Primarily investment and grant-focused organizations rather than protocol governance.

Reputation Based Voting

Reputation systems weight votes by contribution history rather than token holdings. Factors include GitHub commits, forum participation, proposal quality, and community engagement. Rewards actual involvement over wealth.

Advantages: Rewards genuine contributors over passive holders. Reduces plutocracy compared to token voting. Creates meritocracy based on actions. Difficult to game through purchases. Aligns long-term community interest with voting power. Encourages active participation.

Disadvantages: Measuring reputation objectively remains extremely difficult. Subjective criteria enable manipulation. Early contributors gain permanent advantages. Reputation can become entrenched oligarchy. Complex systems confuse new members. Requires significant infrastructure to track contributions. May discriminate against financial supporters.

Creating good reputation systems proves challenging in practice. Different DAOs value different contributions. Developers prioritize code commits. Communities value forum engagement. Balancing multiple contribution types requires judgment calls.

Reputation may expire over time to prevent early-mover advantages. However, determining decay rates creates new controversies. Some contributions like code remain valuable indefinitely. Others like forum posts lose relevance quickly.

Used by: BPC DAO, OrangeDAO, some development-focused DAOs. Rare as primary mechanism due to implementation complexity. More common as modifier to token-based systems. For various DAO tools and approaches, explore this comprehensive tooling guide.

Voting Scheme Comparison Matrix

Mechanism	Speed	Fairness	Complexity	Best For	Adoption Rate
Token Quorum	Medium	Low	Low	General governance	60%
Simple Majority	High	Low	Low	Routine decisions	45%
Supermajority	Low	High	Low	Major changes	15%
Quadratic	Medium	High	High	Contentious votes	12%
Conviction	Very Low	High	Medium	Funding allocation	8%
Delegation	Medium	Medium	Medium	Large communities	35%
Multi-Sig	Very High	Low	Low	Emergencies	45% backup
Rage Quit	Very Low	High	Low	Investment DAOs	8%
Reputation	Medium	Medium	Very High	Development DAOs	5%

Data: Colony.io 2024, Limechain 2023, Coinlaw.io 2025, Author Analysis

Implementation Considerations

Choosing the Right Scheme

No single voting scheme solves all problems. Each trades off between speed, fairness, and decentralization. DAOs often combine multiple mechanisms for different decision types.

Protocol DAOs like Uniswap use token quorum for major decisions but multi-sig for treasury management. Investment DAOs like Moloch combine proposal sponsorship with rage quit. Public goods DAOs like Gitcoin employ quadratic voting for fund distribution.

Hybrid Approaches

Shiba Inu DAO lets proposal creators choose voting methods per proposal. Routine operational decisions use simple majority. Treasury allocations above thresholds require quadratic voting. Emergency situations activate multi-sig committee.

SNS DAOs implement topic-specific delegation enabling expertise matching. Token holders delegate voting power to different experts for different proposal categories. This balances efficiency with appropriate domain knowledge.

Technical Infrastructure

Off-chain voting through Snapshot eliminates gas fees. 96% of DAOs adopted this approach by 2025. Snapshot X on Starknet brings off-chain voting on-chain using storage proofs. Layer-2 solutions like Arbitrum and Optimism reduce on-chain voting costs by 90%.

Zero-knowledge proofs enable private voting while maintaining verifiability. The S2DV protocol uses Groth16 zk-SNARKs with ElGamal encryption. Voters prove vote validity without revealing choices.

Participation Challenges

Average participation stays at 17% across DAOs in 2025. Leading protocols reach 22-28% for major proposals. Decentraland averages 0.79% with median at 0.16%. Low turnout concentrates power regardless of voting scheme chosen.

Solutions include: gasless voting via Snapshot, mobile-friendly interfaces, proposal summarization tools, delegation options, voting incentives, clear communication of proposal impact. None solve participation problem completely.

Frequently Asked Questions

1. Which voting scheme is most fair?

Quadratic voting and conviction voting reduce whale influence most effectively. However, quadratic requires identity verification creating privacy tradeoffs. Conviction voting sacrifices speed. No scheme achieves perfect fairness without disadvantages.

2. Why do most DAOs still use token-based voting despite problems?

Token voting is simple to implement and understand. Aligns governance with financial stake. Alternatives like reputation systems require complex infrastructure. Quadratic voting needs identity verification. Token voting remains default despite whale dominance issues.

3. Can voting schemes be changed after DAO launch?

Yes, through governance vote itself. Shiba Inu DAO added quadratic voting in August 2025 via community decision. Changes require smart contract upgrades and community approval. Most DAOs evolve governance mechanisms based on experience.

4. How does delegation solve low participation?

Delegation lets passive holders assign votes to active community members. This increases effective participation without requiring all holders stay engaged. However, concentrates power in delegate hands. Works best with transparent accountability systems.

5. What prevents whales from buying votes in delegated systems?

Transparent delegate platforms expose voting patterns. Delegators revoke assignments when delegates act against interests. Competitive delegate elections create accountability. However, vote buying remains possible. No perfect solution exists.

6. When should DAOs use multi-sig instead of community voting?

Multi-sig suits emergency situations requiring fast action. Security vulnerabilities, market crashes, or critical bugs need immediate response. Community voting takes days or weeks. Multi-sig enables hour-scale decisions. Use for urgent technical issues, not routine governance.

7. Does supermajority voting prevent bad decisions?

Higher thresholds reduce hasty choices and ensure broad support. However, also creates gridlock preventing necessary changes. Empowers minorities to block progress. Best for constitutional modifications, not routine operations. Balance depends on specific DAO needs.

8. How does rage quit protect minority rights?

Minorities exit with proportional treasury share if they oppose passed proposals. This creates economic incentive for majority to consider minority concerns. However, extends governance timelines substantially and reduces treasury stability. Primarily useful for investment DAOs.

9. Why is reputation-based voting rare?

Measuring contributions objectively proves extremely difficult. Different DAOs value different activities. Determining reputation decay rates creates controversy. Systems become complex and hard to understand. Most DAOs lack infrastructure to track contributions accurately.

10. Can DAOs combine multiple voting schemes?

Yes, and many do. Use token quorum for routine decisions, quadratic for controversial votes, supermajority for major changes, and multi-sig for emergencies. Shiba Inu DAO lets proposers choose methods. Hybrid approaches balance different priorities for different decision types.

Sources

Academic Research: SSRN 2025 - Token-Based Voting by Nakaguma & Botelho; ScienceDirect 2025 - Review of DAO Governance; Frontiers in Blockchain 2025 - Delegated Voting in DAOs; Economics Letters 2025 - Distributed Governance and Value Creation

Technical Analysis: Coinlaw.io 2025 - DAO Statistics; Colony.io 2024 - Voting Mechanisms; Limechain 2023 - DAO Voting Guide; Aragon Documentation - Token Voting Implementation

Case Studies: The Shib Daily 2025 - Doggy DAO Governance Expansion; Chainalysis 2024 - DAO Ownership Concentration; Various DAO governance forums and documentation

DAO Governance Voting Schemes Comparison

Makoto Takahiro