The problem of “Nothing at stake”

Abstract

This article describes a problem of decision that may significantly hurt or even destroy a system that utilizes a decision making mechanism that is prone to this problem. This must be taken into account when designing a decision making (governance) system.

Definition

The problem of “Nothing at stake” occurs when some party that is not affected by the consequences of a particular decision is allowed to participate in a decision making process. This allows a malicious party to disrupt the decision making process by pushing any inadequate decisions and not getting penalized in case the system is hurt by these decisions.

Example

Stakeholder: why aren’t we solving the problem of 51%-attacks?

Decision maker: because this is against the principles of the netwrok

Stakeholder: why are we following such principles of the network that result in millions of dollars being lost and all the ecosystem taking losses?

Decision maker: because I’m only interested in the ideology and I will be pushing it against all odds even if it will destroy the network at the end. I simply enjoy the process. I’m not here for profit. I don’t even hold this token.

Preventing the problem of “Nothing at stake”

In order to prevent this problem it is necessary to make sure that parties involved in the decision making process are affected by the consequences of their decisions.

It is reasonable to assume that the more a party is affected the more it is interested to make “good” decisions or vote for “productive” solutions. As the result this party may have higher vote weight than the party that will not be affected that much.

--

--

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store