Breaking down voting - Don't vote for happyshares / "pay back delegates"

[mf-tzo]

The freerider problem: Delegates can use the money for everybody (dividends, marketing, build the ecosystem) or they can pay it back to the voters. Shareholders can maximize their gains if they voted for the latter and everyone else would vote for the first.

Can you further elaborate on this? It might be obvious and it is very late and I am going to sleep but I think this discussion is important in order to avoid what you have described.

[santaclause102]

Profit margins will eventually squeeze out this kind of behavior (unless delegates are paid more than transaction fees)

If somebody wanted to attack the network this would still be the cheapest option and the little loss through tx fees wouldnt matter. And the freerider problem exists anyway.

The freerider problem: Delegates can use the money for everybody (dividends, marketing, build the ecosystem) or they can pay it back to the voters. Shareholders can maximize their gains if they voted for the latter and everyone else would vote for the first. Also true: The gains are tiny compared to the losses / potential damage if everyone would vote this way. Let's hope people are aware of this enough.

Analogy to POW: A pool operator offering zero or even negative fees to bitcoin miners (paying bitcoin miners to mine with his pool) might gain 51% this way. The equivalent would be a pay back to voters "pool" that offers to pay back the whole reward (~ghash) respectively a tx fees + x for your vote delegate.

I think we should make it clear that "pay for votes" delegates have the potential to lead to centralization. Also everyone should be aware of the fact that the gains through tx fees are a fraction of the potential loss in share value due to a potential centralization.

If shareholders would all be short term shareholders and would have no social / idealistic motive this would be a problem.

[bytemaster]

Give back to the voters requires the delegates to actually produce blocks.

There is a large contingent of honest shareholders that will not approve of that kind of behavior. 

Profit margins will eventually squeeze out this kind of behavior (unless delegates are paid more than transaction fees)

[santaclause102]

More detailed explanation why we souldn't give "pay back delegates" a perspective right from the start is here https://bitsharestalk.org/index.php?topic=5868.msg78966#msg78966

Goals (arranged acc. to subjective importance, most important first):
(1) Minimizing the influence of (obviously) bad actors.
(2) Prevent centralization. Source for centralization https://bitsharestalk.org/index.php?topic=5775.0 There might be a free rider (group trap) problem depending on how high the tx fees are that you get back for voting for the giving back delegate. I think it is likely that people can not estimate how much they can loose (together with everyone else) in relation to what they gain and simply take the additional gain because it is the most obvious benefit. Then the free rider problem is there no matter what the estimate is approximately in reality. (2) is interrelated to (1) as a bad actor could use the pay bcak to voters scheme as a means to gain control. But decentralization also has benefits of it's own so it is an own own point.
(3) Maximum representation (= percentage of shares equals percentage of approved delegates).

Instruments / suggestions:
(a) delegation of votes (= your voting power is distributed among those you vote for)
(b) approval voting (= you can give as many delegates as you want (variant: only a limited amount of delegates) your approval, each approval vote has the same weight.
(c) negative votes (= vote against a delegates in style (a) or in style (b)). Variant (d): Negatives votes could be weighted more than the positive votes (e.g. 1 negative vote + 2 positive votes = 0). Variant (e): limit the amounts of negative votes in case negative votes are style (b) / via disapproval voting. 

Effects/propositions:
- (a) and (b) equally lead to (2) if people perception is that they gain more from voting for the delegates that pays out the most tx fees to his voters compared to his competing delegates and/or if the actually gain/looses estimate is in favor of such behavior.
- approval voting is better to minimize the influence of a potentially bad actor.
- In the end negative votes is the same as positive votes. Just the procedure is different. Right? (didn't think long about this)   

I don't know if "the give back to voters" attack can be prevented without a "social ban". I don't know a solution. Ask a game theory specialist...