What is Vote Delegation?:
Vote delegation lets token holders transfer their voting power to another user, without giving up control of the underlying asset. Vote delegation can be withdrawn at any time, which helps ensure that protocol advocates remain aligned with their supporters.
Why Delegate Votes?:
Vote delegation lowers the cost of participating in governance. By delegating to another user, token holders can avoid the time involved in reviewing each individual proposal as well as the transaction fee required to submit their vote on chain.
Delegation also allows smaller token holders to aggregate their stakes to gain a bigger voice in governance discussions. As an example, many protocols have minimum vote requirements to submit and pass proposals; vote delegation gives ordinary users the opportunity to meet these thresholds despite limited personal resources.
Protocols that Support Vote Delegation:
- Compound style governance systems
- Yam Finance
- Many others
- Aave style governance systems
- MakerDAO (will add support in forthcoming system upgrade)
- Compound Governance Announcement: https://medium.com/compound-finance/compound-governance-5531f524cf68
- KyberDAO Voting Overview: https://blog.kyber.network/kyberdao-staking-and-voting-overview-70be71ee58f0
- MakerDAO Governance Upgrade Specification: https://forum.makerdao.com/t/mip26-dssgov-governance-contract-redesign/4589