Some estimates claim that 47% of all the bitcoin mined so far is owned by whales who can exert pressure over its price action. Something to consider when we talk about an easily forkable network with no formal governance model. Likewise, as Ethereum moves from a Proof of Work to a Proof of Stake consensus algorithm, it is ETH stakers who have increasing influence over the network’s decisions. Plutocracy, or a government by the wealthy, has become the norm in most blockchains so far.
Different approaches to governance have been proposed by other blockchain projects such as Decred, which uses a hybrid of PoW and PoS algorithms, and EOS’s Delegated Proof of Stake. None, however, have solved the problem of exploitable governance and unfair voting advantages. This is because the solution ultimately boils down to hardware, not software.
Stemming from an already successful VPN service, SpiderDAO has devised a solution for the problem of blockchain governance that maintains the principles of privacy and decentralization. It protects itself from disproportionate whale influence by implementing a hardware-based voting process that enables an on-chain and off-chain dual-governance model.
This means that in order to vote, SpiderDAO members must have a SpiderConnect Hardware Router connected to the SpiderVPN as well as a minimum amount or staked tokens. Votes are then weighed by ownership of hardware instead of only taking into account the amount of currency owned by each user. The result is a “one router, one vote” system.
A combination of both an on-chain requirement and an off-chain requirement creates a fairer process for making important decisions in SpiderDAO such as its continued development. Two percent of the network’s earnings through decentralized services like SpiderVPN are accumulated in a reserve known as the SpiderVault. These eligible participants are the ones who are able to submit and vote on proposals that determine the allocation of these funds.
SpiderDAO also provides value propositions that are native to its hardware-based solution. The SpiderConnect Hardware Router and SpiderVPN service are useful tools for the protection of user privacy and offer competitive service speeds. They also give users access to a bandwidth marketplace where they can receive utilities from their router’s capabilities through the network’s native SPDR token. In this sense, the network is able to provide a convenient source of passive income for its participants.
Besides voting rights and access to the SpiderDAO ecosystem, SPDR tokens allow users to take advantage of other important features. SPDR holders can take part in the network’s liquidity mining model as well as the Liquidity as Utility program. The details of these are explained in the SpiderDAO white paper.
Hardware-based voting models for blockchain governance are a novel solution within what is already an innovative and fast-growing field. Perhaps it is the kind of solution that could allow the industry as a whole to take a leap forward in terms of building more equitable, decentralized, and secure blockchains.