Voting Mechanics

TREE will facilitate the decentralized on-chain governance of Treehouse DAO. Specifically, our voting structure is designed to uphold the core principles of transparency and inclusivity, reflecting our commitment to ensuring that the protocol’s future is shaped collectively and fairly by TREE token holders.

Currently, there are four ways to acquire voting power within the Treehouse DAO:

1. Hold TREE in wallet

2. Hold NFT in wallet (1 NFT = 10,000 TREE in voting power calculations)

3. Deposit TREE in Pre-Deposit Vaults

4. Hold TREE in the airdrop vested program (for the amount that has been vested)

All voting power, represented by veTREE, is calculated using a square-root mechanism: the square root of the token-equivalent amount determines the final voting weight of that component.

$$veTREE = \sqrt{Wallet} + \sqrt{NFT \times 10000} + \sqrt{Vault} + \sqrt{Vested}$$

This means that the marginal increase of voting power gradually diminishes as the participants’ TREE token holdings increase, ensuring that while large holders have a more significant voice, their influence does not overwhelm the voices of smaller holders.

Once a proposal is created, your voting power (veTREE) is fixed based on what you held at that snapshot. If you buy or deposit additional TREE, NFTs, or vested tokens after the proposal’s creation, those new assets won’t count toward your veTREE for that vote.

To illustrate, an example of voting calculations can be seen below:

In a traditional 1-for-1 voting mechanism, smaller TREE holders might collectively wield just 4.93% of the voting power. However, with the implementation of square root voting rules, this scenario could shift significantly. In the example above, smaller TREE holders now command a substantial 17.47% of the voting power, representing a more than 3.5x increase.