Deposit and Challenge Deposit

Proposal Deposit

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.

Design Considerations

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.

Challenge Deposit

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.

Design Considerations

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.

Original Post by @laurenluz can be found here