2022 statistics on MakerDAO voter delegation | Devcon Bogotá

foreign [Music] I'm the head of sales of chain security and this is estadio the core unit facilitator of makerdale Data Insights he should find the shorter job title so um today I'm going to be talking we're gonna be talking about uh statistics on maker Dao vote delegation um and you might be wondering why me from chain Securities and not from makerdale why am I talking about this um so chain security we're a smart contract Auditors and we work with many large D5 protocols including maker Dao with whom we've had a very close partnership for quite some time and as head of sales of chain security I've had more and more to you know deal with dials and kind of go through a process that almost looks like an RFP you know like a public tender to sell something to a state um and I was kind of wondering um what exactly is the difference you know when you talk to some people and it seems like a decision is made and then oh yeah it's the Dao but sometimes it doesn't feel that different so I was kind of wondering okay how exactly uh is the community represented in those doubts um and uh two look at that helped me a lot um because we looked at vote delegation in maker so that was introduced uh in the summer of 2021 and uh so what I wanted to do was to look okay since it's been introduced what has changed what were the effects of uh voting delegation so just you know kind of some data to to kind of put things in perspective um holders of maker tokens vote one maker token equals one vote so and there are approximately one million maker tokens in circulation and that has been the same in 2021 and 2022 so the whole period studied let's say it's approximately one million maker in circulation all right so you can vote as a maker token holder but the problem is that voting takes time and money hence the introduction of Delegation basically allowing maker token holders to entrust someone a third party with their voting power so um meaning it's kind of like a politician in the end you know that you trust with your vote you vote for them and then they can take decisions for you and they're going to be involved in this process you know of reading on the potential decisions the potential changes that are going to be implemented um one thing that is kind of interesting is that as opposed to a politician where you have a fixed term four years or whatever here you can undelegate at any point so if at some point the so you as a delegator you delegate your tokens but you can undelegate at any point so basically firing them you know if you want um and so there are two types of delegates you have the shadow delegates so it's permissionless is as if I was saying all right I know you know everything you know about maker I trust you to take decisions for me and it's kind of just peer-to-peer between him and me but they are also recognized delegates which are monitored uh by the governance core units um and there we can see some information about them and so this is an example of the two biggest uh delegates in maker Dao so here you can see you know how much they participate in votes how much they communicate on the forums you can see how much uh you know how many tokens are delegated to them and so on so there is kind of this transparency and this this oversight from an authority that is the the governance core unit um okay so now that we know what it is let's look at you know kind of How It's impacted uh the community and the governance here we can see so this is from a beginning of the month um we can see that there were uh uh took 115 delegates and among these 23 are recognized delegates and what's very interesting I find is that almost 15 percent of Homemaker tokens are delegated so we can see that you know it has really had traction it's not something that is just a small and on the side but now it's interesting in these 15 what does it look like you know who delegates to who and this is something that we can see thanks to the amazing work of the data Career Unit um so here you can see on the left this is the largest delegator and you can see on the right who he delegated to why do I say he because probably it's ruined the founder right um and you can see here really who he delegated to um and what's very interesting is that he delegated to people that he knows and publicly supports but he also delegated to people that he publicly disagrees with he also delegated to University clubs you know blockchain University clubs and so that's kind of one of the big points that I want to make in this presentation um sometimes we think that the idea of Delegation is that small token holders can kind of you know get together and become more powerful and so on but actually one thing that we see most is that it's the opposite it's huge you know it's whales who decentralize a bit of their power and so we can see um these are also like the other five or these are also kind of big uh big token holders it's like in Dresden Horowitz and and other kind of whales and then we have not even 8K not even 8 000 maker tokens delegated from all the rests um so you can see that you know this is a much smaller right amount and so all the rest delegates to all these uh all these delegates so now that we know kind of the structure of Delegation we can look at Q2 2021 so which is the quarter right before delegation was introduced in the summer so like in July August uh 2021 it was introduced um and then we compare it here with Q2 2022 so one year later um and what is really interesting to me um is that you have in terms of the median poll participation in terms of the number of maker tokens you can see that there's an increase of 540 percent so what does that mean there are way more maker tokens which are put in on average you know in every vote so that means it is way harder to commit to governance attack you know so if you want to I don't know do something kind of shady with the protocol to borrow tokens and kind of have this voting power to do something uh nefarious well it's much more difficult when there are 92 000 maker tokens then when there are 14 in a vote so that's kind of the the very interesting takeaway there so takeaways um whales delegate their mkr as a way to decentralize themselves and we see again like I said before a very significant increase in the number of maker tokens uh that are um used in votes um and so now some questions that you know I don't have time because it's a very short presentation um you know I I think it's interesting to think about okay what is the optimal level of oversight you know on these delegates um so the you know the core unit that takes care of governance how much should they monitor them and and and you know kind of have this uh relationship um also uh looking at the compensation of delegates it's kind of interesting if you have um ten thousand to maker delegated to you so that's approximately uh you know almost nine million dollars you have a yearly salary of a hundred twenty thousand US Dollars approximately so that's a salary that you can live on um and so that's that's a cap so is this an appropriate compensation this is also I think a very interesting question um another thing so now we incentivize delegates right but should we maybe incentivize voters should we incentive device delegators maybe this would make sense there is also something that we've seen is that some whales delegate to themselves and it's kind of funny to think you know that you're gonna get paid to delegate to yourself but as we discussed um it's also some work that you know you do even if it's for yourself if you publish on the Forum if you do all this research maybe this is also you know something that you should be compensated for even if it's your own tokens and finally talking about whales decentralizing themselves should we maybe lock you know those tokens in a delegation contract for a longer period of time so that you know you cannot say oh I'm decentralizing myself but the second you do not exactly what I want you to do I take my tokens back so maybe it could be interesting to create this type of this type of options um so I just want to say a quick thanks to those who helped me um I focused here on maker but I also want to say thanks to the compound team to the pull together team and to reverie for helping me prepare this presentation and of course uh to tadeo who helped me and have provided all the data thank you sorry you said there was uh you know 24 official delegates and 92 unofficial delegates or something like that how do the 92 become an official delegate I guess that's the 128k compensation right um so in terms of the onboarding to become a recognized delegate right now we're trying to keep it as easy as possible and this is have a great work from kawalfa and the governance teams it's yeah you have to have a call uh you have to present a platform uh present yourself and basically you have a Public Image again it can be a Anonymous person that's totally okay on our side but you basically need to have an open dialogue with the community uh something that was shown in the one of the first screenshots coming from our voting portal um there we we actually the compositions is um is managed by the performance the performance is uh basically easy delegate voting on all the polls and all the executives and are they giving a reasoning for those votes