SOV + staking (+ active voting?) = fee share

Today I read somewhere,
that eligibility for getting a share of the protocols revenues shall be tied to active votes.

Haven’t found a discussion about that topic, so wanted to create room here.

It’s a very interesting approach (imo with both, positive and also unwanted results)

Isn’t trusting the protocol, team and staking SOV on it enough to be eligible for fee rewards? (In return for capital lockup)

If voting is required for rewards, how you see possibility of “voting bots” doing no benefit to the protocol, but only ensure fee distribution.

How about bots that vote 50:50 within same wallet (not sure if possible). Means having a zero results vote, only ensured fee distribution again. (Just burnt some rBTC on voting process)

On the other side, it could be very enticing to “go voting” and therefore those who build, or better say help shaping the protocol are rewarded most/only by protocol revenues.

As in relation to: Every nation gets exactly that political elite they are guilty of (or deserve)

How it may work implementation/time wise?

Like whenever a voting is closed, get participating addresses … and distribute revenue pool in same relation as voting power (which already is equated from SOV amount and staking period)

That’s just some raw thoughts now which kept me awake, so had to jot them down. But hope to discuss further…

We had this discussion in the Aragon community. In that thread I remained opposed to the idea of voting rewards, but over time I’ve warmed up to it, especially if combined with a staking mechanism as is implemented in Sovryn to encourage long-term thinking.

The reason why I’ve warmed up to the idea is that remaining informed and voting does take a lot of work, and ideally this work would be compensated. You could say “well, if voters govern well then SOV goes up in value, isn’t that enough compensation?” But this benefits all SOV holders, including those who do not vote. So to eliminate the free rider problem, we can create special rewards just for those who are actively participating in governance by voting.

Some voters might use a voting bot, but more likely is they will just delegate their vote to someone who is more active. Which isn’t a terrible outcome imo.


I think that the mitigation for random voting is delegated voting. People will prefer to delegate to those who vote well.

A question I don’t have a clear answer to is when to the fees get distributed? After each vote, we distribute the accumulated fees? That is a bit weird, becuase the votes don’t happen on a schedule.

But if we distribute every X periods, what if there weren’t any votes in the period? What if there were several? Is any vote enough?


Right. There could be periods of like “one voting per day” and periods of nothing to vote at all.

In my head, to have distribution bound to voting simplifies the whole act. Because what if there are eg 5 votings a month where a voter participated on 3 of them? Will we count “hours of fee eligibility” on months end to distribute fair share of revenue? Sounds possible but likely overhead to devs.

If fee share pool ist “emptied and distributed” to all voters after voting feels easier.

On periods without voting the pool may just stack up until next vote, or there is some automatic voting schedule:

[if no voting occurred within last period of x days/hours → propose and initiate fee distribution vote]

Very informative thread over there.
And you’re probably right about delegation vs bots.

This seems like the best way to me, if only for the fact that it’s simple and gets the job done.

The next question is how to determine reward amounts: a fixed amount per unit of voting power per vote, or a fixed amount per unit of voting power per unit of time? I would advocate for rewards to be a fixed amount per unit of voting power per unit of time e.g. 1 SOV per unit of voting power per month. This eliminates the incentive to create votes just for the sake of increasing the total reward amount.

Wouldn’t it be impossible to

because the reward pool fills up (from platform usage fees), and is emptied after voting. So one can’t increase reward amount, but only frequency of payout.

If eg “only 1 vote per month” is needed for fee distribution it could very well lead to go voting on the first instance on a given month… now secured fee share… and neglecting following votings… until next month.

If pool is emptied on every voting, it makes sure that every voting counts (reward wise) at least by accumulated fee amount.

Actually yes, you’re right. I was (incorrectly) considering that rewards could include a subsidy component that comes from the protocol as well, which has been proposed in other projects but not Sovryn as far as I know. Voting rewards in Sovryn would come exclusively from protocol revenues based on the proposals I’ve seen. In which case it doesn’t make a difference how many votes there are in a given time period, as long as you vote in all of them you’d receive the same amount of rewards during that period if there were (say) ten votes as you would if there were only one vote.

Also I love that making good decisions is already factored in (versus just voted for fee share thing)

Cause higher voting power means either higher capital at stake or higher time-lock of tokens, or both of it. Making good long term decisions naturally endorsed.

But also small(er) holders are encouraged to participate and cast their vote. Down to the equation of voting cost (gas) vs revenue share.

Also the question of “does my opinion/vote even matter, because of minority” is somewhat solved. Every vote matters even if you’re the only one opposing majority.


Interesting… Nothing is easy. I like the idea of a set time for distributions though. As long as you voted or delegated your coins in the votes in that time period you get share of fees. If no voting happened in that time period but you got last distribution, you are still eligible.

Maybe each stake tracks how many votes you made of the total votes made. If you miss 1 of 10 you get 90 of your allocation (based on amount staked and time period staked). If you voted in 1/2, you get half your allocation. Make it cumulative over the lockup period. If you voted 2 of 2 times you get full payout but you stop voting your share slowly decreases each payout period. That would keep it easy and incentivize keeping up with votes / staying involved or delegating. I also like the idea of monthly payouts. Any flaws to that?

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