A Hybrid Dynamic Voting Mechanism for Decentralized Governance in DAOs

Abstract

In decentralized governance, existing token-based voting mechanisms employed by Decentralized Autonomous Organizations (DAOs) often suffer from centralization risks, as a small number of large token holders can dominate decision-making. While reputation-based voting has emerged as an alternative that reflects members’ historical contributions, it is also prone to ossification, where early contributors accumulate disproportionate influence over time. To address these challenges, we propose a novel hybrid dynamic voting mechanism that combines tokens and reputation in the voting power. Furthermore, we incorporate an exponential decay mechanism into the reputation component to ensure that voting power dynamically reflects recent and active participation rather than legacy status. We also utilize Gini and Nakamoto coefficients to evaluate the proposed mechanism. To validate our proposed mechanism, we design some computational experiments, and the experimental results show that the proposed hybrid mechanism achieves better fairness and decentralization, while allowing new contributors to more quickly gain meaningful influence. This work provides insights into designing adaptive, fair, and secure governance mechanisms for DAOs.