iZUMi Finance brings DAO based veNFT Governance with Quadratic Voting

The Rise of DAO and Decentralized Governance

iZUMi Finance, a protocol that enables programmable liquidity mining on Uniswap V3, has announced the introduction of its decentralized autonomous organization (DAO). It did this with a quadratic voting process, based on veNFT, which will allow the DAO to be managed in a contemporary style. The new iZUMi DAO veNFT (veiZi) governance token allows for DAO governance by quadratic voting on important community issues.

The token is meant to reflect the governance powers of the protocol, including voting, boosting, and returning staking rewards, What more? it is compliant with the ERC271 standard. In terms of NFT usage, the tokens represent a significant step forward for the industry. Governance votes in typical DAOs are represented by the number of tokens stored in a wallet; however, governance votes in the DAO are represented by the number of tokens held in a veiZi NFT.

The protocol LiquidBox liquidity mining platform delivers non-homogeneous Uniswap V3 LP token staking rewards in multiple price ranges, which might improve the effectiveness of incentive distribution for reward providers and increase liquidity providers’ revenues in Uniswap V3.

What is Quadratic Voting?

Quadratic voting enables users to cast votes that reflect their investment in an issue more than traditional voting. Voters may vote on an issue several times, but each consecutive vote is worthless.

Arithmetically, this system is complicated. It is impossible to utilize on a wide scale without the aid of technology. Quadratic voting was also theorized as a monetized voting mechanism at one point. It was critical in this approach to ensure that subsequent votes did not have the same weight as the original vote. However, this approach might be accessible and safe against ‘double spending’ votes if blockchain is used.

Now, blockchain allows for the creation of a system that includes: A method of distributing voting tokens to the general public without the danger of their being stolen by other voters. The extra votes cannot overcome the vote of the basic population because of the quadratic character of this system.

This enables voters to vote for what matters most to them and communicate how strongly they feel about it. While these advantages will help all voters, it is especially crucial to protect minorities and reduce polarisation in the long run.

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Image credits: PiggyBank and Susan Wilkinson.

Disclaimer: The purpose of this article is to remove informational asymmetry existing today in our digital markets by performing due diligence, asking the right questions, and equipping readers with better opinions to make informed decisions. The writer holds Bitcoin, Ethereum, Cardano, Solana and Cosmos. The writer has a vested interest in the story.