What does delegating mean?

The ERC20Votes contract from OpenZeppelin is a powerful tool for on-chain governance, and understanding its delegation mechanism is key to participating effectively in DAOs. Here's a breakdown of how it works:

1. What is Delegation?

Delegation allows a token holder to grant their voting power to another address without actually transferring their tokens. This is crucial for increasing participation in governance, as it enables those who may lack the time or expertise to actively vote to still have their tokens contribute to decision-making.

2. How ERC20Votes Handles Delegation:

• delegate(address delegatee): This function in the ERC20Votes contract allows a token holder to delegate their voting power to a specified address (delegatee).

• No Token Transfer: Importantly, the tokens themselves remain in the original holder's wallet. Only the voting power associated with those tokens is transferred to the delegatee.

• Self-Delegation: A token holder can even delegate to themselves, effectively signaling their intention to actively participate in governance.

• Changing Delegates: Token holders can change their delegate at any time by calling the delegate function again with a new delegatee address.

3. Voting Power and Snapshots:

• Checkpoint: The ERC20Votes contract uses a "checkpoint" mechanism to track voting power over time. This means that the voting power is calculated based on the token balance at a specific point in time, ensuring that past votes are not influenced by future token transfers.

• getPastVotes(address account, uint256 blockNumber): This function allows you to query the voting power of an account at a specific past block number.

4. Benefits of Delegation:

• Increased Participation: Encourages greater involvement in governance by enabling passive participation.

• Expertise: Allows token holders to delegate to experts or community members they trust to make informed voting decisions.

• Decentralisation: Can help prevent concentration of voting power in a few hands.

In the context of LobbyFi:

LobbyFi leverages this delegation mechanism to aggregate voting power and offer it on a marketplace, further incentivising participation and creating a more dynamic governance ecosystem.

By simplifying the delegation process and offering rewards, LobbyFi makes it easier for token holders to engage in governance and contribute to the decision-making processes of their favourite DAOs.