Effects of Vote Delegation in Blockchains: Who Wins?

2024-08-10

arXiv.org

AI Summary

This paper investigates how vote delegation affects outcome fairness in blockchain-based binary collective decision-making, focusing on its differential impact on minority and majority success probabilities under varying initial voting power distributions (balanced vs. highly skewed). Employing game-theoretic modeling, probabilistic analysis, and large-scale numerical simulations, the study first systematically identifies a “reverse balancing effect” of delegation: it increases minority win probability under uniform weight distributions but reinforces majority dominance under concentrated weight distributions. It further proposes a novel criterion: “Delegation benefits the majority if and only if it renders the post-delegation voting power distribution more balanced.” Theoretical analysis proves that delegation’s influence asymptotically vanishes in large populations with uniform initial weights. These findings provide quantifiable theoretical foundations and actionable guidelines for designing and tuning delegation mechanisms in on-chain governance protocols.

Technology Category

• Game Theory and Economic Paradigms: Social Choice / Voting
• Multiagent Systems: Mechanism Design
• Reasoning under Uncertainty: Decision/Utility Theory

Application Category

• Economics, Online Markets and Human Computation: Fairness, privacy, and diversity in economic environments
• Responsible Web: Human-perceived consequences of algorithmic deployment on the web
• Security and Privacy: Blockchains and distributed ledgers

Abstract

This paper investigates which alternative benefits from vote delegation in binary collective decisions within blockchains. We begin by examining two extreme cases of voting weight distributions: Equal-Weight (EW), where each voter has equal voting weight, and Dominant-Weight (DW), where a single voter holds a majority of the voting weights before any delegation occurs. We show that vote delegation tends to benefit the ex-ante minority under EW, i.e., the alternative with a lower initial probability of winning. The converse holds under DW distribution. Through numerical simulations, we extend our findings to arbitrary voting weight distributions, showing that vote delegation benefits the ex-ante majority when it leads to a more balanced distribution of voting weights. Finally, in large communities where all agents have equal voting weight, vote delegation has a negligible impact on the outcome. These insights provide practical guidance for governance decisions in blockchains.

Problem

• Investigates benefits of vote delegation in blockchain binary decisions
• Examines impact on ex-ante minority vs majority under different weight distributions
• Assesses delegation's practical effects in unbalanced vs balanced voting rights systems

Innovation

• Analyzes vote delegation in binary blockchain decisions
• Compares Equal-Weight and Dominant-Weight voting distributions
• Uses numerical simulations for arbitrary weight distributions