Token Based Quorum Voting

DAOs can use a token-based quorum voting mechanism to make decisions. Each member is allocated a certain number of tokens that represent their stake in the organization. When a vote is initiated, members can use their tokens to cast their vote. The total number of tokens used in the vote is called the "quorum," and a specific percentage of the total tokens must be used for a decision to be made. This percentage is known as the "quorum threshold."

If the number of tokens used in the vote meets or exceeds the quorum threshold, the decision is considered valid, and the outcome of the vote determines the final decision. On the other hand, if the quorum threshold is not met, the vote is invalid, and no decision can be made.

Token-based quorum voting helps ensure that decisions are made by a majority of the organization's members, preventing a small group from making decisions that don't benefit the organization. It also enables the members of a decentralized autonomous organization (DAO) to participate in the decision-making process and hold the organization accountable.

Quorum voting is the most basic mechanism for DAOs' decision-making process, requiring a set minimum number of votes for a proposal to pass. However, users may hoard tokens to gain more voting power. Relative quorum voting is a variation designed to address low participation, where a proposal passes if at least 51% of voters favor it.

More about governance and voting mechanisms of DAOs here: Governance and Voting Mechanism Models of DAOs