Vote.finance’s quadratic voting system will change how we design governance features on tokens
What does deflationary actually mean?
Typically, we discuss deflation as a positive thing in economics. In that context, it refers to the falling prices of everyday items, thereby providing each individual, or holder, with more purchasing power
But what does it mean in a closed ecosystem in which there is no trade of perishable goods or stable number of holders? For a coin like HOGE, do deflationary aspects actually improve the tokenomics or equity of the asset?
Relative to inflationary, it’s not so bad. Inflationary tokenomics typically involve mining or yield farming, allowing the money printer to go BRRRRRR for your biggest holders in activities that are not as practical for your smaller holders.
So, with deflationary assets, the decrease in supply increases value proportionally for all holders across the board. Better right?
Not so fast. For anyone to win with HOGE, it is dependent on new buyers entering the system. With the price increasing for every decrease in supply, this system still negatively impacts new buyers who the current holders are depending on.
So, regardless of how you set tokenomics, it doesn’t really matter in the scheme of things. Whales win. Holders get diamonds hands. Power is centralized.
But that’s not what we got into decentralized finance for, right? This is supposed to upend traditional finance and provide everyone the opportunity to properly invest and accumulate wealth.
This is where Finance Vote provides their revolutionary quadratic voting system which can change the way we handle all governance tokens. And seriously, I mean ALL of them.
If you’re Mr. “I read the white paper” then please, by all means, go ahead. Written by a team with multiple doctorate degrees on board, backgrounds in both DeFi and traditional marketing and finance, It’s actually quite the treat.
But if you ape, whitepaper make brain go sad, it basically goes something like this. Finance.vote handles KYC (Know Your Customer) procedures through ID’s in the form of NFT’s, called Decentralized Identity Tokens, or DIT’s.
These DIT’s allow you to vote on a variety of measures. However, the more votes you make on different measures, the less power each vote has. This reduces the power of a single DIT to impact voting more than, say, a person who is really only interested in one issue.
This is important, because voter apathy is real, and just because someone chooses not to vote on a particular issue, it doesn’t mean other people should have more collective power.
Now, this is still pretty easy to exploit. All you have to do is create multiple identities and then you get more votes. I’m sure we’ve all seen this happen somewhere.
Without being able to verify identity through some regulatory agency, thus preventing DeFi from achieving its dream of cutting out third parties, there is just no realistic way to do KYC effectively to prevent this.
So, Finance Vote simply allows you to buy more identities with FVT, but at increasing cost per buy, with supply burning at each purchase to reward all holders.
While this may not seem like such a smart idea if you’re from a developed country, allowing people to buy votes, it ignores the reality that people will find ways to do so regardless and that, for most traditional companies, and most of DeFi, stocks and tokens are essentially votes you can accumulate.
It also ignores that half of the world lives undocumented, and, without this system, would never be able to vote in finance anyway. And since each additional vote costs significantly more than the one prior, there will be diminishing returns, acting as a much larger deterrent to accumulating power than we’ve seen thus far in any system, traditional or decentralized.
Vote Finance has also added true merit-based aspects to this voting system, getting further away from holders simply winning for holding. They’ve taken their second-layer governance system and applied it to create an entire ecosystem.
One that I want to highlight is finance.vote, a market predictions platform that provides a gamified approach for users.
Like how eToro allows you to copy other traders’ portfolios and moves, or Reef Finance allows you to invest in baskets, or collections of different tokens, each vote on a market prediction gets recorded and is available for other traders to see.
As DIT’s get associated with making correct calls, they become more valuable (and are also tradeable). This is because the system actually weighs their input more heavily when curating discovery of tokens on the platform. This seems a fair and merit-based reward for increasing the viability of the platform through correct market predictions.
In itself, this is a fantastic idea and will likely make investors a ton of money if they follow the voting signals which are designed to drown out whale action.
But this is particularly interesting to me as Reef has forged a partnership with Vote Finance in order to utilize both their market indicators as well as their voting system.
Think about that. Think about them being able to license this voting system, which reverses the benefits of economies of scale, the problems of traditional finance which bleed into DeFi, and sets us on a course for equity.
Forget inflationary, forget deflationary, none of it matters if we just cap off the influence of big power and restore equity in finance.
At an $8M market cap, Finance Vote could soon find itself in a different tax bracket. The functionality of its system is truly second to none, and can redefine the DeFi space and solve so many issues of market manipulation that we’re all seeing.
Oh, and don’t forget that this is just ONE part of their ecosystem? You can check out yield.vote, influence.vote, auction.vote. While these are all impressive in their own right, I know you’re chomping at the bit to buy some FVT so DYOR on the rest.
So whether you pick up a bag to get rich from the whale-resistant market prediction system, or because you can see its ability to be a licensing giant partnering with every major DeFi player, just know you’re in for one hell of a ride behind an extremely respectable team helping prove the value of DeFi in solving real world problems.
Tl;dr: Doxxed and accomplished team partnering with top-100 projects, a revolutionary voting system and NFT-based ID’s that will close the gap on the inequities and market manipulation plaguing DeFi so that it can truly replace traditional finance, with a full-utility token that burns supply when spent on minting new ID’s.