First thought is major holders, things like investment funds would have overwhelming voting power, if a few wall st. funds got together they could probably have anything from veto power to total control. However, that's not really any different to MN collateral, if a small number of entities can hold a big enough chunk of the Dash total supply they can take over governance regardless of whether it's from running MNs or simply holding coins.
When Dash Boost was active there was a clear problem that I though may be relevant to this. Dash Boost worked by allowing coin holders to vote but it worked out small votes weren't worth anything, MN collateral votes overwhelmed them to the point of irrelevance. Imo the obvious solution was to disallow votes from MN collateral and I'd thought maybe the same may apply to the above but it really seems to be the other way around.
MNs tend to hold the collateral for a very long time, the possibility of large holders taking over governance by holding the majority of MNs is held in check by MN owners that won't sell at any price, neither high nor low. Would those MN owners be more willing to sell if they could still vote simply by holding coins? Imo they'd be more willing but I've absolutely no idea how much more. Maybe if staking was offering greater returns (highly suspicious imo) while still allowing votes it would be an issue, we could see a large reduction in the MN count and "new money" having a greater influence on governance.
I'd humbly suggest an in-depth look at Dash Boost with the benefit of hindsight, where it was innovative, where it screwed up, how it could have been improved etc. A second governance system seems like the ideal imho, MN governance is proving simple, effective, resilient, something really solid that should only be changed when the proposed change is a total no-brainer. I'm not sure that kind of proposed improvement can come fully formed, "do this and it will be better" but I do think something like that can evolve from the kind of experimentation that would be to risky for core governance.
@stan.distortion Understood and I contemplated this for quite a while but ultimately I concluded that deep pockets (Binance etc) would ultimately spin up masternodes to gain votes and that would be no different to where we are now. AFAIK, Binance is running 120+ masternodes using customer money and they haven't used them to vote yet.
This proposal has a few safeguards that I think is better than the current system:
1. With the current system, voting can be done within hours of setting up a masternode. Under this proposal, voting must be registered in an earlier voting cycle.
2. Votes are cast against dash usernames, which comes at a cost. If someone wanted to place large blocks of votes, they would have to registered hundreds of usernames to try and hide the fact. Perfectly plausable, of course, but I'm thinking this process might give us a better insight to voting activity.
The incentives for running a masternode would remain pretty much as they are now. Maintaining a masternode produces a financial reward and the 1000+ dash collateral would give similar voting power. Perhaps more so because under this scheme, if an MNO is accumulating dash - not spending all their rewards - then they would have more voting power, which is exactly the incentive you want, people with a long term vision.
I also agree that the weight of masternode votes at 1000+ dash is likely to eclipse smaller holders, but I see this as a positive because I didn't want a proposal that is so radical that it's uncharted territory..The stats from CrowdNode seem to support this.
By opening up voting, we can help our users feel they are a part of a process, not some ivory tower of rich kids. This also simplifies future development of masternode shares. And on top of that, it's a great way to showcase Dash Platform.