Introducing Slashing Mechanics in WavesDAO

Dear WavesDAO Members,

As observed in the on-chain analysis available at WavesOnChain, a large number of wallets committed PWR tokens remain inactive in voting processes. Despite their inactivity, these wallets are still being counted toward the voting quorum. This undermines the efficiency of our DAO and weakens the decision-making process.

To address this issue and ensure a more effective governance structure, I propose the introduction of slashing mechanics with the following key parameters:

1. Participation Quorum:
   Wallets must actively participate in at least 30% of the proposals created within an epoch.

2. Slashing Penalty:
   Wallets failing to meet this minimum participation threshold will incur a 20% slash on their PWR commited.

Supporting Research

The WavesOnChain team, in collaboration with WavesFunnyNode, conducted a thorough analysis of DAO proposals over the past year (from November 2023 to November 15, 2024). The study examined wallets that voted “Yes” or “No” on at least one proposal and evaluated the impact of applying a 20% slashing penalty for non-participation.

The research highlights a significant number of inactive wallets and is accessible here:
WavesDAO Slashing Research

Proposed Implementation

To enhance the effectiveness and fairness of WavesDAO governance, I propose conducting the first test implementation of slashing mechanics for wallets that do not actively participate in voting.

Initial Test Phase Rules:

1. Activity Check:
   Analyze the active wallets within the current epoch and evaluate their participation in DAO proposals over the last year.

2. Participation Requirement:
   Each wallet must vote in at least 30% of proposals created during the analyzed period to meet the minimum participation threshold.

3. Slashing Penalty:
   Wallets failing to meet this requirement will incur a 20% slash on their PWR holdings.

Examples

Scenario 1:

• Total Proposals in the Last Year: 77
• Wallet 1 Participation: 5 Proposals
• Required Participation:
  ( 77 \times 30% = 23.1 ) (rounded to 23 proposals)
• Outcome: Wallet 1 falls short of the required threshold and incurs a 20% slash.

Scenario 2:

• Total Proposals in the Last Year: 77
• Wallet 2 Participation: 24 Proposals
• Required Participation:
  ( 77 \times 30% = 23.1 ) (rounded to 23 proposals)
• Outcome: Wallet 2 meets the required threshold and avoids penalties.

The WavesOnChain team and WavesFunnyNode will conduct an analysis of wallet participation within the current epoch, identifying inactive wallets and applying the proposed slashing mechanics accordingly.

All data and mechanics will be shared on this GitHub page:
WavesDAO Slashing Repository