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  1. Technology

Voting Process

PreviousUtilsNextFor Startups

Last updated 2 years ago

I: Voting weight

Voting weight = n% = ( investment currency of VC / total received currency of pool )* 100%

In order for a milestone to be successful, two conditions are required to be met:

Voting weight is different in different pools / projects based on investor's investment.

  1. If more than half of the investors are participating in voting, this condition is validated.

  2. If more than 51% of votes (in terms of voting power) are in favor, this condition is validated

Meeting both conditions results in the vote being validated.

II: The process of the vote

The second condition's results are calculated as:

  1. The process of the vote will be illustrated in the below diagram

2. Description for calculating.

However, if even one of the conditions isn't validated, the proposal is failed and voting is conducted again after 7 days to proceed with a refund proposal. In the refund proposal, the first condition remains constant, that at least more than half of the investors in that pool are participating in voting, and among them, at least 67% of the votes (based on the voting power) should be in favor of a refund.

For a refund to be successful, again two conditions are required to be met:

  1. If more than half of the investors are participating in voting, this condition is validated.

  2. If more than 67% of votes (in terms of voting power) are in favor of refund, this condition is validated

If the refund conditions aren't successful, the funds are still escrowed in the smart contract until the next milestone.

After a Pool sale is successfully completed, each investor will be notified of his or her vote weight for each pool based on the amount invested in the pool. Only investors who invested can vote for that pool.

At the first milestone, the system will automatically generate a Fund disbursement proposal. Investors will vote for this proposal. Voting time is 7 days.

If the disbursement proposal is not met, after 3 days, the system will create a Refund proposal for investors to vote.

Within the same milestone, a maximum of only 2 proposals can be made: Disbursement proposal, and Refund proposal. In case both requirements are not met, the system will wait for the next milestone to issue a proposal.

Whether a disbursement vote or a refund vote, two criteria must be met:

  1. Criterion one: The number of people participating in the vote needs to be more than half.

  • If the number of participants to vote / total investors of the pool >= 51% => the vote is valid, continue to check the voting rate

  • If the number of participants to vote / total investors of the pool <51% => invalid vote, the system holds the currency and waits for the next vote

The requirement of voting participants is more than half to ensure that the decision on the outcome of the vote is made on the opinion of the majority of investors.

2. Criterion 2: Voting weight

Each vote has 3 options: Agree, Disagree, Neutral

Smartcontract executes the contract only when Criterion No. 1 is met, and the majority votes Yes.

  • For Disbursement proposal: Smartcontract will execute the contract when 51% of the votes agree

  • For Refund proposal: Smartcontract will execute the contract when 67% of the votes are Yes

Note:

  • For Disbursement proposal: the regulation of 51% of the Yes vote has shown the majority opinion in agreeing to disburse capital for the startup. This ratio will support startup in project development.

  • For Refund proposal: the regulation of 67% of the Yes vote shows that investors need to be more careful in choosing Refund. Selecting Refund would be an undesirable outcome for the project, as well as represent a failed investment.

Example:

One pool raised $1M and had a total of 5 investors.

Investor 1: Invest 150K - voting weight: 15%

Investor 2: Invest 200K - voting weight: 20%

Investor 3: Invest 400K - voting weight: 40%

Investor 4: Invest 50K - voting weight: 5%

Investor 5: Invest 200K - voting weight: 20%

=> This Proposal is OK to executed. Smartcontract will start send fund to startup, send token to Vesting smartcontract.

=> This Proposal will NOT be executed. No any transaction. System will hold to next Vote.

Voting process