Active governance is necessary to ensure treasury funds have maximum impact, but this requires sustained effort and attention from holders.
Unsurprisingly, low vote turnout is common onchain where 50-75% of votes go uncast. These uncast votes are a waste of DAO governance energy.
Federation is announcing Governance Pools, a novel protocol that incentivizes delegation by auctioning Nouns votes and awarding holders with auction proceeds. Nouns holders can delegate their governance rights on a proposal-by-proposal basis and earn ETH for doing so.
Federation + Governance Pools
Funded in Nouns proposal #229, Federation is exploring new ways of sharing governance rights and extending utility of the Nouns token.
Governance Pools
Auctions are initiated for each new Nouns DAO proposal. The winning bidder chooses whether the pool is used to vote For, Against, or Abstain on a proposal.
Nouns holders who delegate to Federation Governance Pools can withdraw auction proceeds scaled by the number of Nouns delegated.
We expect that creating a market for governance rights and returning that value to Nouns holders will increase participation in DAO governance by providing an incentive to delegate.
Potential Criticism
We expect some criticism from the release of this protocol. It is experimental and purposefully simple. A common thread of criticism we have heard is “you’re selling votes?” The answer is yes, but let’s take a moment to look at DAO participation over recent proposals.
![Several recent proposals reached near 50% vote turnout, but there is considerable variability in turnout between proposals with many votes
uncast across proposals. [Note: Blue semicricles indicate success]](https://images.mirror-media.xyz/publication-images/Lk9anOCx5MKi9DOeDm482.png)
Well over half of Nouns votes are uncast across proposals. Providing incentives for Nouns holders to delegate their voting rights will increase vote turnout, prevent waste of governance energy, and provide an opportunity for Nouns holders to earn ETH.
Getting Started
Delegate your Noun(s) to the Federation base contract.
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Go to Federation Governance Pools and connect your wallet
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Click Delegate button on the upper right to delegate your Nouns
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Confirm transaction and start earning ETH
Withdraw your share of the auction proceeds when you’re ready.
