Archived Proof of Collateral Stake - Better voting system than PoS

[danielle]

Pancake_Design
4
Apr '17

Proof of Collateral Stake

• Everyone can vote.
• One vote per PIV held as vote collateral.
• Partial votes allowed.
• PIV being held as vote collateral will be unspendable for a month.
• PIV being held as vote collateral can be counted toward a Master Node and can be Staked and will gain a 20% bonus of masternode/staking rewards over those not being held in vote collateral.
• PIV being held as vote collateral can vote again, but will reset the vote collateral timer.
• The maximum one wallet can hold as vote collateral is 10,000 PIV. (I need more feedback on this one)

There are four forces at play:

1. We want how much effect an individual has to be proportional to how much PIV is held.
2. We want the voices of many to be heard, not just a few whales cooperating with one another.
3. We want the voters to be financially tied to their voting decision to discourage sabotage by competitors.
4. We don’t want to discourage users who are invested in the success of PIVX from voting.

Corner Cases Averted

• One person buying PIV right before vote, creating thousands of 1 PIV wallets, voting to the detriment of PIVX, and then selling PIV.
• One person holding PIV for a long time, creating thousands of 1 PIV wallets, voting to the detriment of PIVX, and then selling PIV.
• Whales voting for the benefit of themselves, but to the detriment of PIVX, reaping the benefits and then dumping PIV
• Many users voting to the benefit of themselves, but to the detriment of PIVX, reaping the benefits and then dumping PIV

Potential Problems

• What do we do if a voter REALLY needs to be liquid in the case of an emergency?
  ** 10% penalty? What if the effect of the vote affects the cost of currency by more than 10%?
  ** Any early exit increases incentive to sabotage.
• Whales can still split up their wealth into wallets of 10000 PIV each. The power of whales are reduced, but they can spend time to increase their power.
• Classes of people under-represented:
  ** People who just use PIV as currency, not as an investment
  ** Whales are under-represented relative to how much PIV they hold
• Though 20% increase in bonus is to make up for no liquidity for a month, it does encourage voting on issues without deep understanding of the implications (bandwagoning on the majority).