DAO Voting: How Decentralized Governance Really Works

When you hear DAO voting, a system where token holders vote on decisions for a decentralized organization without a CEO or board. Also known as on-chain voting, it’s the backbone of true blockchain democracy—no middlemen, no corporate offices, just code and collective choice. This isn’t theory. It’s how projects like Gitcoin, Uniswap, and Aave actually decide their future—what features to build, how to spend their treasury, even who gets paid.

But DAO voting isn’t magic. It needs token-based voting, a system where your voting power matches the number of tokens you hold. If you own 1% of the tokens, you get 1% of the votes. Simple. Fair. Except when it’s not. Big holders—often called whales—can swing votes, leaving small holders with little say. That’s why some DAOs now use quadratic voting, where buying 100 votes costs way more than 10, to balance power. And then there’s decentralized autonomous organization, a legal and technical structure that runs on smart contracts and community votes. It sounds clean, but real-world DAOs face messy problems: low turnout, bot-driven votes, proposals written in jargon, or worse—no one even shows up to vote.

What you’ll find in these posts isn’t just theory. It’s real cases. Like how North Korea’s Lazarus Group tries to exploit weak governance to steal funds. Or how Costa Ricans use crypto tools—some with DAO-like structures—because governments aren’t stepping in. You’ll see how fake tokens like VALIMARKET pretend to be something they’re not, and how real projects like MyShell actually let users vote on AI agent upgrades. Some DAOs fail because no one cares. Others fail because the rules are broken before they’re even tested. This collection cuts through the noise. It shows you what works, what’s a scam, and how to spot the difference before you stake your tokens.

Voting Mechanisms in Governance Token Systems: How DAOs Make Decisions 24 Sep
by Danya Henninger - 14 Comments

Voting Mechanisms in Governance Token Systems: How DAOs Make Decisions

Governance tokens let holders vote on blockchain protocol decisions, but voting systems vary widely-from simple token-weighted votes to complex quadratic and liquid models. Learn how they work, why participation is low, and what’s changing in 2025.