Author: Maha (Aura contributor)
Summary
Over the past 18 months since the launch of veBAL, there have been a number of turbulent votes within the DAO, accompanied by gradual changes in voter composition. During this time a number of measures have been implemented to maintain balance of votes and voter integrity.
Whilst the reality of voting is quite nuanced, as Aura approaches 50% of the veBAL share it is becoming a concern that the distribution of votes is again becoming imbalanced and that action needs to be taken.
This post seeks to address those concerns, propose a number of potential measures, and open up to the forum to decide the most equitable path forward.
Current state of vote distribution
As seen on DefiWars, current total supply is 7.3m veBAL, with the top 5 voters accounting for almost 90% of that. The quorum on snapshot is 2m veBAL, requiring ~27% voter turnout.
One significant point to note is that over the past year, roughly 3m in veBAL has been gradually unlocking, with an unlock date of last week. This 3m veBAL was minted/staked by Balancer shareholders or similar parties and subsequently delegated to Maxis and other similar stakeholders. This unlocking has linearly reduced the voices there over the past 12 months.
Additionally, as per the peace treaty, another significant amount of votes has been unlocking from Humpy.
In terms of Aura’s token distribution, while it has a lower market cap, the token distribution is relatively more diverse, with the top 5 holders having 40% of the votes, the top holder being a liquid wrapper (jAURA) who does not participate in Snapshot. Balancer DAO Multisig recently became the 6th largest token holder there after claiming and locking 1.4m vlAURA from their vesting stream.
Current state of delegates & active voters
Generally speaking, both DAOs are lacking a diverse set of large, active delegates relative to other DAOs like Aave. Taking a look at recent Balancer snapshot votes (One, Two, Three, Four), shows that Aura and 1-2 Balancer Maxis are the only accounts currently voting with >1k veBAL. Aura votes have a similar distribution (One, Two). Aura’s activity is thus largely critical to maintain activity in the Balancer votes at the minute.
Addressing Aura first, the most active and largest voter is the Aura Delegate Council, comprised of 7 members and with 25% of the voting power delegated to it. This council contains Aura contributors, a karpatkey co-founder, a balancer maxi, and 2 community members and currently votes as a majority based on poll results. Both Aura as a DAO, and more specifically the Delegate Council, have voted on every single Balancer Snapshot vote since their inception.
There are probably a number of reasons for the lack of diversity, one being that the largest voters are too large, making voters feel like they have no voice, another could be the large quantity of votes coming through, and for Balancer, the unlocks mentioned above are another big reason for lack of delegate power.
Aura voting history, alignment and integrity
There have been a few notable periods of controversy in the DAO, with the gauge framework & peace treaty, and then again with a number of SP funding proposals, leading to a period of peace and tranquility that we have experienced on Snapshot for the past 6 months.
As the largest veBAL holder, it is undeniable that Aura is aligned with the long term success of BAL. The value of BAL, the emissions, and fees/revenue generated in Balancer DAO is what Aura’s whole world is built around, and it’s future livelihood. With that being said, given that Aura is an external party and somewhat faceless, it is sensible and rational to consider that they may not be aligned and thus prepare for that scenario.
On that note, I believe that Aura voters have shown integrity and strong alignment with Balancers best interests through this period, by not attempting to abuse their voting power through creating proposals that would explicitly benefit Aura, or attempt to pressure the DAO to do so. Aura also were a major assistance in the creation of the peace treaty. It is possible to consider that this level of alignment will continue for the future lifetime of Aura.
It is worth addressing the notable tension between Aura voters and Balancer employees/community members that came during the period of SP funding in which Orb was wound down and other budgets re-assessed. The process of evaluating and addressing funding requirements is difficult and emotionally charged for both sides, and it was a difficult time, however it now seems like the DAO has reset to be in a much healthier position from an expenses point of view and that those times are behind us all.
The solution(s)
To address Aura’s large size, I believe the most robust solution to be a cap on the maximum voting power of any individual Snapshot voter to be 40-45% (may be extended to include groups of addresses under a single entity). Otherwise, another suggestion could be to return to pass through voting. Even though there is a peace treaty, it would be prudent to have some sort of contingency plan or note from Humpy to accompany this.
For voter diversity:
- Encourage increased voter activity on both DAOs through more structured programs
- On Aura’s side, potentially move Aura Delegate council to vote proportionally to poll results rather than in a block, and optimise the composition
Next steps
Decide on a course of action, propose BIP, put it to a vote 
The initial BIP should probably be quite simple: cap any individual snapshot voter to 40-45% using this custom snapshot strategy. Following that, some BIPs or discussions on how to increase the voter diversity.
