Title:Effects of Vote Delegation in Blockchains: Who Wins?

Abstract:This paper investigates which alternative benefits from vote delegation in binary collective decisions within blockchains. We begin by examining two extreme cases of voting weight distributions: Equal-Weight (EW), where each voter has equal voting weight, and Dominant-Weight (DW), where a single voter holds a majority of the voting weights before any delegation occurs. We show that vote delegation tends to benefit the ex-ante minority under EW, i.e., the alternative with a lower initial probability of winning. The converse holds under DW distribution. Through numerical simulations, we extend our findings to arbitrary voting weight distributions, showing that vote delegation benefits the ex-ante majority when it leads to a more balanced distribution of voting weights. Finally, in large communities where all agents have equal voting weight, vote delegation has a negligible impact on the outcome. These insights provide practical guidance for governance decisions in blockchains.