Kyber is an on-chain liquidity protocol that aggregates liquidity from a wide range of reserves, powering instant and secure token exchange in any decentralized application.
The Kyber Network has tested an Aragon DAO and is currently trialling DAOstack. This is a rare example of a project which started without any formal governance but has recognized a need for decentralized governance and is now going through a community consultation and experimentation process to find a DAO type solution.
In the first experiment, an Aragon DAO was created in which KNC tokens (Kyber Network’s native asset) could vote. The first proposal asked whether a Community Grant should be set up to be governed by the KyberDAO, 95% of voting power approved this decision but only 0.56% of circulating KNC tokens were represented, across 60 unique addresses, so a maximum of 60 people participated.
The Kyber DAO Exp#2 using DAOstack launched in Jun 2019, awarding Rep to KNC holders and people who had traded on Kyber in the previous 3 months, according to a scale determined by their holdings/activity. Participation in the DAO proposal votes was low, with a maximum participation of less than 1% of Rep. Most of the proposals failed because there was insufficient voting turnout and they failed to achieve majority support. Writing in Oct 2019, the DAO still has $500 of KNC to spend, but proposals and votes have become scarce.
Kyber’s efforts illustrate a problem with adding formal governance based on token voting to projects which did not have that as part of their foundation. It is difficult for these votes to establish legitimacy with low turnout, and without established legitimacy many holders will not take the trouble to vote. Ethereum carbon votes are another good example of this. Although they can achieve reasonable turnout for controversial issues, people who have more at stake will be more incentivized to participate, and so the low overall representation means the results tend to be swayed by those who would be directly affected.