With Tao Voting, proposal creators must lock a set amount of funds as the collateral required to create a proposal. This amount of funds is the parameter “Proposal Deposit” and is set during the design phase. These funds are returned to the proposal creator when the proposal passes or fails.
A higher Proposal Deposit creates more friction for proposal creators, therefore increasing the likelihood of more “serious” proposals, but making proposal creation less accessible. A lower Proposal Deposit makes proposal creation more accessible, therefore likely increasing the number of proposals submitted but potentially congesting the voting process and/or creating more overhead for the DAO.
If an individual believes that a certain proposal is malicious, contains an error, or is not in alignment with the Community Covenant, they can challenge the proposal by staking (and locking) a set amount of funds. This amount of funds is the parameter “Challenge Deposit” and is set during the design phase.
A higher Challenge Deposit decreases the likelihood of many proposals being challenged on minor or profit-seeking grounds. A lower Challenge Deposit makes proposal challenging more accessible, increasing the potential for community control over veto-ing proposals but potentially leading to voting process congestion or “griefing”* of proposals.
*The Griefing Attack in this case would look like somebody choosing to consistently challenge someone else’s proposals to harass them.