#IIP Idea - Change voting to allow only staked ILV to vote

1 messages · Page 1 of 1 (latest)

dreamy token
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Simple Summary - I propose changing voting to allow only staked and vesting ILV/SLP tokens to vote in council elections.

Abstract - It has always been possible for a bad actor to launch a Sybil attack with the way vILV calculations are done by transferring ILV to multiple wallets. In the past week, there has been an anomalous uptick in the number of wallets holding ILV, which is consistent with what would be expected if an individual WERE planning to conduct a Sybil attack. I propose that we change voting to allow only staked ILV tokens to vote, which would add an additional, substantial cost to anyone trying to conduct a Sybil attack, while leaving genuine voters unaffected.

Motivation - In a Sybil attack, an ILV holder with a sufficiently large amount of ILV (and funds to pay for transfers to new wallets), can split their stack of ILV between many wallets, thus increasing their total vILV power. Since vILV is calculated quadratically, someone splitting 100 ILV between 100 wallets would have increased their voting power from 10 vILV to 100 vILV. That contravenes the point of quadratic voting, and undermines the election process. The primary motivation for this change is to ensure the fairness of the election process.

Rationale - The recent uptick in ILV holders does not follow the trend we've been seeing of slow growth for total ILV holders. In the past 7 days, we've seen total ILV holders increase from 23500 to 25300. See included chart for reference. Making a change pre-emptively would ensure confidence in fairness of the voting process, save time and money (as the vote wouldn't have to be re-done if a Sybil attack happened), and create a robust solution for the future.

Downsides - It's been identified that making this change would impact non-staked ILV holders who are interested in participating in elections. Making this change does cause any non-staking ILV holder to have no voting power in elections.

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Implementation: Pedro has mentioned he could make this change easily, so this would not heavily detract from development time spent in other areas. Reference: #💰〕token message

night basin
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It will be in the best interest of the DAO to have voting power according to what you have staked. We could have bad actors that purchase the token only to take over the council and sell back Then pass IIPs for the benefit of their own and not for the ones that believe and want the success of the project itself.
Not considering vILV power of unstaked tokens could be a negative sentiment for some but the best for the DAO, and we have always been best for the DAO comes first.

slow brook
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Another small addition to this can be to have a minimum amount to disincentive splitting your tokens. I think the absolute minimum should be 1, because we know that square root of numbers lower than 1 yields a larger number. i.e. square root of 0.2 = 0.447

radiant vector
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@dreamy token - thank you for preparing this so quickly! This has been a concern of mine for some time, and I was actually surprised several epoch's ago to learn it wasn't staked ILV. Strongly supportive of this change if it can be implemented technically.

slow brook
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I started adding things up before I said it support this. I think it's a good change. And this voting mechanism can be used in referendum type votes, like the one suggested in #1040218513413001256

hoary heart
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Like this idea

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talking to Pedro right now and he thinks its good too

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Easily enough to change as well

cerulean blaze
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I like this idea too

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honestly more weight to ppl that have staked for longer too but okay if we don't do that now lol

narrow prawn
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I’m supportive of this change as well. In an ideal world I would prefer for even unstaked ILV holders to be able to vote. However, I have always worried about the prospect of malicious actors entering our governance process. This is a good starting point to preventing that. I also assumed that the quadratic voting calculation would just keep fractional ILV values as their actual weight (I.e. .2 ILV = .2 vILV). This gives no incentive to split below 1 ILV but also doesn’t disincentivize smaller holders from voting.

hidden thorn
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Wow. All this time I thought only staked ilv can vote.

For all the reasons indicated by blickter and the others I am for this proposal.

lunar iron
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This should be done before voting is live

dreamy token
maiden badge
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Yep I need to know beforehand to make the changes before elections

radiant vector
potent sluice
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@dreamy token great work ser

My only concern is what of those that arent staked and have in past epochs voted?
Not great to exclude them last second.

Imo its better to make this change next epoch, give fair public warning to all that the voting requirements are changed.

In the short term what has been raised here is still an issue, short term solution could be as simple as taking a snapshot of ILV holders from before this unusual uptick in wallets occurred, is this possible @maiden badge

Long term I think it does make sense though that voting is changed to stakers only, I’d just prefer all persons are given fair warning and the community be given more time to discuss this in depth (as long as my above short term solution is executable),

No need to make big changes in haste when a smaller simpler change will do, large changes are always better to not be rushed when possible.

(If pedro says a snapshot a week or so back isn’t possible tho then I am in favor of making this change even now)

radiant vector
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Given that the election starts in about a week, is that sufficient notice to inform the community that there may be a pending change to require staking to vote? While I'm for inclusion and there is a risk of some alienation, my guess is there are very few individuals impacted by this change who are actually planning to vote. We will also see if the number of token holders continues to grow over the next few days. As much as I like seeing people pick up ILV, seeing it jump significantly just prior to an election is a risk.

narrow prawn
dreamy token
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A snapshot is fine unless someone has already been exploiting Sybil attacks. It's certainly possible to be more subtle than creating hundreds of new wallets a day. This has been a possibility since voting started, and while no major attacks have been identified, a saavy person would do this on a small enough scale that they didn't get caught. Nothing about the possibility of a Sybil is new, this is just the first time we've seen a major red flag indicating one could happen prior to an election.

I think only staked tokens voting is the most robust solution, even if it isn't necessarily the most fair. By no means do I mean to rush a major decision, but if this ends up needing testing etc. I'd rather have it in motion ASAP. Having to redo or delay the elections would be a poor outcome.

hidden thorn
radiant vector
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even december 2021 at the top of the bull run, we had 1458 wallets voting. this is part of why I have done the election statistics to see if something weird happens where a candidate gets carried by wallets with <1 ILV. Never happened so far

dreamy token
radiant vector
potent sluice
hoary heart
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I've already spoken to Pedro about all of this and its about a day of changing somethings to implement for this election. Personally, playing devils advocate, I just dont like the idea of excluding people because of a 'hunch' that someone is maliciously trying to buy the election. Yes its weird, but is it proof? I don't think so... and staking ILV (I am fully staked) is inherently risk on for someone as opposed to holding in their personal wallet. So for me I feel like we are punishing risk averse investors for the something that may or may not even be occurring... that being said all they have to do is stake for a month which isnt long but in order to continue voting in future those tokens arent in their walelt

radiant vector
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just in case folks were wondering, here's the total vILV participation in the last election by the wallet holding size. Leviathan and whales (>1000 ILV) cast 61% of the vote.

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radiant vector
# hoary heart I've already spoken to Pedro about all of this and its about a day of changing s...

taking the other side - if we hold the election and see a candidate get nearly all of their vote from plankton/shrimp wallets and a significant change in the vote distribution versus past elections (they've all largely looked like the pie graph above), do we accept those results, or is that a moment where the eDAO would step in and we would change and revote? Given token price and lower gas prices, this is the first election where the sybil attack is actually viable.

dreamy token
# hoary heart I've already spoken to Pedro about all of this and its about a day of changing s...

The only way we could prove that someone intends to skew voting is if it happens. The worst case there isn't really that bad, but it does create extra work and controversy around what the correct course of action is afterwards (This is not to mention that someone could disparage a candidate by using many small wallets to vote for them, which adds a whole new element of drama that could be avoided). Right now, we just have a suspicious set of circumstances, where one of the potential outcomes is a skewed election.

There are all kinds of possible ways we could mitigate a Sybil, but all of them are going to impact someone. I also dislike the idea of excluding non-staked ILV from voting, but there does have to be some barrier preventing wallet splitting to stop it from happening. Cost tends to be an extremely effective motivator.

hoary heart
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Also, just thinking now but I don’t know about you guys, but I’ve told every person I know irl and in crypto space to get their assets off of CEXs… considering everything going on it’s honestly not that surprising to me ppl are wanting take control of their assets again

pine zenith
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“This change would impact non-staked ILV holders who are interested in participating in elections”
This sentence seems contradictory haha. who exactly is that? Non staked but want to participate in election...?

I mean It's simply wrong someone can influence the future of this project without staking ILV, the governance token. This change has to happen ASAP imo.

marble seal
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A no brainer imo

hidden thorn
# radiant vector just in case folks were wondering, here's the total vILV participation in the la...

So 1458 wallets * 0.062 = 90 wallets are shrimp/plankton and even if assuming half are non staked that's just 45 wallets affected or 3.1% of voters from past election.

I'd say that's an acceptable threshold of affected voters. I mean they can just stake it now for a month if they want to participate.

@dreamy token you already talking to Rich to get it officially posted as an IIP and voted on by the council?

hoary heart
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Just put my opinion out

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And letting community discuss for more than 24hours

marble seal
hoary heart
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I don’t think it’s as easy as saying it’s a no brainer personally

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You guys are using a small sample size of voting in your considerations, we have no public game released which in turn means less ppl concerned or voting imo… we expect to onboard a million ppl to play the game, how many will become holders, how many will stake? How many will not stake over concerns of not being in direct custody of their assets

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I think this is a good idea to try and out bad actors but I don’t think we’ve had sufficient reason to constitute the change imo and exclude an entire group of Illuvium supporters

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Bad actors could also stake for a month

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What does that do for us

marble seal
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I get your points here, but would pushback in two ways

  1. we may want a throttling of voting power to those most committed/aligned, otherwise opens the door for governance attacks down the road
  2. assumed vote power would be weighted similar to revdis on time
hidden thorn
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That's definitely a fair take. According to Deraji, only 760 out of 25k holders voted. That's just 3% of holders. No idea how much vILV it translates to, since we have the biggest holders participating.

I'm pretty sure a significant number are staked but are just not bothered with participating in voting. I don't see how once we go open beta this would change significantly.

That being said it would also be good to implement changes now so that it would be the norm once we go live.

hoary heart
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Yeah I mean overall I’m in support of the reasoning behind the idea… I’m just not convinced it’s as simple as “it’s a no brainer” or “only 3% vote now so NBD”… I think ppl that we onboard that may want to own ILV may have an aversion to staking just because of what’s happened in the space

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In the end it’s not up to me, but our wonderful council

hidden thorn
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Maybe I can rope in @tender dune here. I distinctly remember someone mapped out how many are staked from the ilv holders. Hope lelahel did it. It might also shed some light as to overall landscape and how this idea may affect it adversely or beneficially.

hoary heart
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Like I said though… the whole idea is kinda null if this 750 wallets that brought up the concern suddenly staked and then voted

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Or if we change it and they don’t

marble seal
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I think there’s a distinction to be made between staking illuviums native token into illuviums smart contracts and holding assets on a centralized exchange

The second you hold the ilv token you can be rugged by the team

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Like you could hold ftt in a ledger and still get rugged by FTX (as many did)

hoary heart
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This is exactly what I’m saying though… ppl are pulling their tokens off exchanges

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Hence new wallets

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ILV isn’t an exchange token so it’s not tied to the exchange failing

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The exchange fails I just want my ILV off of it

marble seal
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Totally agree with self-custody being preferable, but trying not to get sidetracked here

The point is that staked or not, you’re already trusting the ILV team to not rug you (they won’t ofc) because the value of your tokens - wherever/however stored - is largely in their hands either way

Staked vs. not staked is just how long you are willing to commit that trust for, and your risk assessment re their ability not to get exploited (want immediate liquidity to sell etc)

narrow prawn
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I spoke to Deraji and Vet about this and proposed that we research two topics as prep for a council discussion on this. 1) The distribution of ILV among the new wallets (I.e how many wallets have <2 ILV and no other major token or NFTs) and 2) How many voters in previous elections had voted with staked vs non-staked ILV. These two should give a pretty good view onto risk of a Sybil attack here AND what the likely community impact of a change would be

dreamy token
hoary heart
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Thought this was relevant to my argument

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Obviously it applies to more than just btc

proper shore
radiant vector
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I'm doing my best to review wallets from the past election. Right now, I'm through the smallest 213 wallets (which is up to 10 ILV), and 93.9% are STILL staked today. Only 13 wallets that voted last time are not currently staked. I'll keep working through, but it feels like a minimal impact from this proposed change

marble seal
hoary heart
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but yeah

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youre right

marble seal
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Yeah - in that situation stake-to-vote just gives another incentive to get off centralized exchanges

hoary heart
marble seal
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lol yeah a bit more coercive

radiant vector
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After reviewing the wallets that participated in the June 2022 election, here is the assessed impact of this IIP. In total, 760 wallets participated in the last election. Of those, I hypothesize 14 of them to be team members who received tokens but have not participated in staking. These are oddly exact numbers of ILV, (e.g. exactly 20k ILV).
Of the remaining wallets, 731 remain staked in either the ILV or SLP pools. Note, some have decreased their stack significantly compared to their voting power in June, but likely due to vesting rewards, they retain the ability to participate.
A total of 15 wallets that participated in June are not staked in either pool today. Of those, only seven still hold any unstaked ILV. Two of those wallets hold a small amount of sILV2, which to me implies that they had previously staked and withdrew, but continue to hold the tokens.
For the seven impacted wallets, the amount of ILV held is 0.12, 0.46, 0.58, 1, 1.6, 2, and 7.7. I do feel bad if these individuals are determined to vote, but would not be able to in this election. However, as the rate of past participants impacted is less than 1% of all wallets who engaged in the previous election, I will be voting in favor of the proposed IIP to increase security and also require a minimum commitment of one month staking to participate in future elections.
Further assessing the impact, these seven wallets cast votes for six different candidates in June, with only Sascha receiving votes from two of the impacted individuals. Of current candidates, Santiago, Scoriox, and I each received a single vote from the impacted wallets. To my one supporter that can’t vote for me this time if this IIP passes, my sincerest apologies. <@&814435151307866142> - here's my quantitative assessment if you would like to review regarding this proposal.

marble seal
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Would also reemphasize the point re cost of governance attacks

Gov attack = competitor buys tokens, stacks council, passes bs stuff

Being able to bypass quadratic makes this much cheaper to do (1 ILV in 10000 wallets >>> 10000 ILV in 1 wallet); plus can sell back immediately after vote to recoup liquidity

Nbd now, but if the game scales dramatically then the sharks will come

hoary heart
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So what happens if they stake 1 ilv across 10k wallets?

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For 1 month

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I cringe at the idea of proving this still flawed but I could try my frens lol

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I dont have 10k ilv

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but you get the point

dreamy token
marble seal
# hoary heart For 1 month

Doesn’t remove risk, just adds friction

Always gonna be tradeoffs as we don’t wanna make it harder and harder for average joes to feel heard in order to be defensive

dreamy token
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Or if the cost of staking became excessively cheap (like if staking moved to a L2, this would be something to consider when making that change).

radiant vector
# hoary heart So what happens if they stake 1 ilv across 10k wallets?

they buy the council. at least it's a couple steps harder with this proposal. We would also potentially see which candidate was heavily favored by this group, and further assess if action needs to be taken. It's why I share this analysis each election to see if a specific demographic, most specifically small wallets vote in a completely different direction.

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narrow prawn
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@radiant vector, your analysis is really thorough and compelling. Thank you for putting in the legwork. I was on the fence but to talk about literally 99% of voters last epoch staked makes me worry not at all.

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It’s still fair that this doesn’t guarantee protection from a Sybil attack if staking costs are low but it makes it burdensome enough it would be unlikely

slow brook
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If we see an attack like that, remember we can vote on council member to be released from duty. And a following step we can make is have a minimum of ILV staked, that can vote. Like 3. And triple the cost of the attack.

hidden thorn
slow brook
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So it's OK to not overthink this much. If we see such signs, there are ways to act then.

dreamy token
# slow brook If we see an attack like that, remember we can vote on council member to be rele...

So far we have 3 votes in favour of this IIP, so it's on track to pass. It's worth noting that votes for a candidate (especially from easily identified small wallets) are not inherently damning (since we're getting into the nuance). In theory, a bad actor could engage in a Sybil with the intention of voting for a genuine candidate, only to try and drag that genuine candidate's name through the mud. The only goal of a Sybil doesn't HAVE to be getting a specific candidate elected, it could be to try and discredit a council nominee.

Passing this is good on multiple fronts, as we shouldn't need to contend with any of that extra baggage. We can all be grateful for that, we don't need Illuvium: Deathnote up in here.

vivid barn
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Wouldn't staking ILV in multiple wallets completely counter this?

narrow prawn
# vivid barn Wouldn't staking ILV in multiple wallets completely counter this?

It does. But the act of doing so makes it difficult administratively and financially at current gas fees to perform a Sybil attack (as well as much more obvious). Envision someone wanting to do this with 1 ILV in each of a thousand wallets. We’re not completely preventing this type of attack, just making it a bit more difficult while not negatively impacting the engaged community members who are already staked and voting.

vivid barn