Swimming with Whales: Analysis of Power Imbalances in Stake-Weighted Governance

We consider a problem arising in proof-of-stake blockchain environments, where agents called nominators select validators - entities responsible for maintaining the blockchain's physical infrastructure. The selection process is inherently subjective and multi-criterial and combines with the fact that nominators commonly operate through multiple accounts. This gives rise to a portfolio selection problem, where agents seek to distribute their nominations across accounts to diversify risk. We propose a decision support framework to optimize this selection by simultaneously maximizing two objectives: the expected utility of the validators likely to be allocated, representing portfolio quality and profitability, and the expected entropy of the allocation, representing diversification and risk mitigation across stashes. Validator utilities are derived using an original active preference learning procedure based on multi-attribute value theory, with emphasis on top-ranked validators. The resulting bi-objective optimization problem is solved with a multi-objective evolutionary algorithm and, to support the final choice, we introduce an interactive binary search navigation procedure that guides the nominator through the front and identifies a satisfactory trade-off with only a few questions. Numerical experiments examine the optimization strategies, while an expert assessment involving five experienced nominators confirms the approach's practical relevance and usefulness.

Multi-stakeholder tasks require one output to satisfy users with conflicting preferences. Holistic LLM judges conflate utility estimation and utility aggregation, yielding unstable implicit weights. We show empirically and theoretically that this aggregation-specific \emph{weighting noise} can create large score shifts when stakeholder satisfaction is dispersed; in our experiments, these weight-induced shifts also increase with stakeholder count. We propose \textsc{DecompR}: counterfactual-calibrated weights are fixed from query structure before candidate scoring, while per-role utilities are estimated independently, removing candidate-dependent weight drift and reducing estimation noise.

Laws and institutions shape individual outcomes through complex interactions with citizens' diverse circumstances, yet how different voting methods navigate this coupled landscape remains poorly understood. We model collective governance as optimization on NK fitness landscapes, where shared bits (laws) are updated by voting while individual bits (personal traits) remain fixed. A cross-dependency parameter $α$ controls how legislation's effects depend on individual circumstances. We compare eight standard voting methods and a generalized scoring family across landscape ruggedness $K \in \{1,\ldots,20\}$ and $α\in [0,1]$ with 1000 runs per configuration. Under direct democracy, the optimal voting method undergoes sharp phase transitions as a function of landscape complexity: cardinal score voting dominates on smooth landscapes, ordinal scoring with $p=0.35$ at low-to-moderate ruggedness, Borda count across a wide middle range, and STAR voting at the highest complexity. A two-parameter empirical formula reduces the $(K, α)$ plane to a single complexity axis for visualization. Borda count achieves the highest mean fitness and lowest variance across most of the parameter space. We further introduce a representative democracy model parameterized by identity weight $β$ and candidate self-interest $p_{\mathrm{self}}$. Representation reshapes the complexity-dependent structure even under favorable conditions: cardinal score voting dominates across most regimes, with plurality emerging as the top method at high $β$ and low-to-moderate $p_{\mathrm{self}}$.