Measuring Voting Power in MakerDAO with the Banzhaf Power Index

Introduction

This article explores the application of the Banzhaf Power Index (BPI) to quantify voting power distribution within MakerDAO, focusing on absolute participation scenarios. The BPI measures the probability of a voter influencing an outcome in weighted voting systems, making it a valuable tool for analyzing decentralized governance structures like DAOs.

Key Concepts

• Banzhaf Power Index (BPI): A metric calculating a voter’s ability to swing a decision based on their voting weight.
• Absolute Participation: Assumes 100% voter turnout for robust power distribution analysis.

Methodology

Data Collection

Data was sourced from MakerDAO’s governance records via Boardroom’s Governance API (May 15–20, 2024), including:

1. Voters: Addresses and their voting power (rounded to two decimals).
2. Delegations: Token holder delegations (self-delegations and proxy-delegates).

Filtered Dataset:

• Included only voters with ≥1.00 voting power (n = 846).

Analytical Approach

• BPI Calculation: Used the powerindex Python library for absolute participation scenarios (quota = 51% majority).
• Visualization: Generated distributions with plotly for voting power and BPI.

Results

Voting Power Distribution

All Voters

• Quota: 563,565 (51% of total voting power).
• Key Insight: Extreme concentration among few addresses.

Proxy-Delegates (n = 24)

• Quota: 59,051.
• Trend: Higher BPI variance vs. all voters.

Self-Delegates

• Quota: 504,514.
• Observation: 96.11% of voters had BPI < 1.00.

Banzhaf Power Index Findings

1. All Voters:

   • Highest BPI: 0x74971F1b... (4.58).
   • Dummies: Two addresses with 0 BPI (no influence).
   • 96.69% of BPIs ranged 0–1.

2. Proxy-Delegates:

   • Highest BPI: Same address (87.80).
   • No dummies; 14 addresses had BPI ≥1.

3. Self-Delegates:

   • Highest BPI: Two addresses tied (4.10).
   • Same dummies as all-voters scenario.

Future Research Directions

1. Historical BPI Analysis: Apply BPI to past MakerDAO proposals.
2. Relative Participation: Model average voter turnout scenarios.
3. Governance Documentation Review: Clarify quotas for polls/executive votes.
4. API Discrepancy Checks: Compare Boardroom vs. MakerDAO data.
5. Alternative Indices: Test Shapley-Shubik or other power metrics.

FAQs

What is the Banzhaf Power Index?

The BPI calculates a voter’s likelihood of being pivotal in a decision, accounting for unequal voting weights.

Why focus on MakerDAO?

MakerDAO’s transparent governance data makes it ideal for quantitative DAO analysis.

How does delegation affect BPI?

Proxy-delegates often consolidate power, resulting in higher BPIs than self-delegates.

👉 Explore decentralized governance tools

What defines a "dummy" voter?

A dummy has 0 BPI—no scenario where their vote changes the outcome.

Can BPI predict governance centralization?

Yes—high BPI disparities indicate power concentration, risking decentralization.

👉 Learn about DAO voting mechanisms

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