5 ♠ · Strategy · Draft
Delegation
Token holders lend their voting power to someone they trust, who then votes on their behalf.
How it works
A token holder picks a delegate: another address that will vote for them. They register the choice in the governance contract, and their tokens stay in their own wallet. The delegate's voting weight rises by that amount on every proposal. Some systems allow a different delegate per topic, such as treasury or technical upgrades. The holder can change or cancel the delegation at any time. Delegates often publish their voting record so holders can judge them.
Use it when
- You have many passive token holders and proposals struggle to reach quorum.
- Let members with time and expertise vote for those who lack both.
Watch out for
- Power pools in a few large delegates, who may vote for their own interests.
- Delegates go quiet, and delegated tokens sit idle while holders assume they are represented.
Example
Compound. Compound's governance contract, launched in 2020, requires COMP holders to delegate (even to themselves) before their tokens can vote on proposals.