Fairness in Token Delegation: Mitigating Voting Power Concentration in DAOs
For DAO governance, this work identifies a practical fairness issue in delegation systems, but the contribution is incremental as it primarily analyzes existing problems without proposing a novel solution.
The paper studies token delegation in DAOs, finding that current mechanisms concentrate voting power among a few delegates misaligned with token holders' interests, and proposes incorporating interest alignment to improve representativeness.
Decentralized Autonomous Organizations (DAOs) aim to enable participatory governance, but in practice face challenges of voter apathy, concentration of voting power, and misaligned delegation. Existing delegation mechanisms often reinforce visibility biases, where a small set of highly ranked delegates accumulate disproportionate influence regardless of their alignment with the broader community. In this paper, we conduct an empirical study of delegation in DAO governance off-chain discussions from 14 DAO forums. We develop a methodology to link forum participants to on-chain addresses, extract governance interests using large language models, and compare these interests against delegates' historical behavior. Our analysis reveals that delegations are frequently misaligned with token holders' expressed priorities and that current ranking-based interfaces exacerbate power concentration. We argue that incorporating interest alignment into delegation processes could mitigate these imbalances and improve the representativeness of DAO decision-making. To support future research, we will release our dataset and code in a public repository.