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How to Read a Governance Report

A Practical Guide for DAO Decision-Makers

You've received a governance report. But what do all these numbers actually mean? This guide shows you what really matters.

The 5 Core Questions Every Report Should Answer

1

Who is voting?

A few whales or a broad community?

2

How concentrated is power?

Do 10 wallets control 90% of votes?

3

Is there real participation?

Or is it "governance theater"?

4

What's the trend?

Getting better or worse?

5

What should we change?

Concrete recommendations

If any of these answers are missing, the report is incomplete.

1. Voter Participation Rate

Formula: Unique Voters / Total Token Holders × 100
>30%Excellent — active, engaged community
10-30%Normal — typical for DAOs
5-10%Low — apathy or information gap
<5%Critical — "governance theater" risk

Beware: A high rate isn't automatically good if only whales are voting!

2. Voting Power Concentration

Typical format: "Top 10 wallets control X% of voting power"

Metric
Healthy
Critical
Top 1 Wallet
<10%
>25%
Top 10 Wallets
<40%
>60%
Top 100 Wallets
<70%
>90%

Critical distinction:

  • • Whale Concentration = Large token holders
  • • Delegate Concentration = Trusted with others' votes

A delegate with 20% voting power is different from a whale with 20% — the delegate was chosen by the community!

3. Gini Coefficient

Scale: 0 to 1

0 = Perfectly equal distribution | 1 = One person owns everything

<0.5Highly decentralized — unusually good
0.5-0.7Decentralized — good distribution
0.7-0.85Concentrated — typical for DAOs
>0.85Highly concentrated — oligarchy risk

Context matters: A Gini of 0.8 can be acceptable if top holders are active delegates who operate transparently.

4. Unique Voters vs. Voting Power

Example:

• 1,000 unique voters ✓

• Top 5 voters hold 80% of voting power ⚠️

Many people are voting (good!), but few are deciding (problematic).

Ideal: Broad participation AND broad power distribution

5. Proposal Success Rate

>95%Too high — are all proposals rubber-stamped?
70-90%Healthy — filter works but isn't blocking
50-70%Contested — active debate
<50%Problematic — governance is gridlocked

Important: A 100% success rate is not good news — it means either nobody disagrees, or controversial proposals aren't being submitted.

5
Steps to Understanding Any Report

1

OVERVIEW

Check time period, scope, data sources

2

PARTICIPATION

How many vote? What's the trend?

3

POWER

How concentrated? Whales vs. delegates?

4

HEALTH

Proposal success rate, activity level

5

ACTION

What does it mean? What do we do?

Ready for Your Own Report?

Get a professional governance analysis for your DAO. We distinguish between whales and delegates — because context matters.

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