Count unclaimed INDEX tokens in Snapshot votes

Governance
1

Summary:
Include unclaimed INDEX rewards in a user’s vote weight in snapshot governance. This allows small holders who cannot claim often due to gas costs to have the voting power they deserve.

Abstract:
Index Coop’s current Snapshot vote-counting strategy simply weights your votes based on how many INDEX tokens an address owns. Many users have unclaimed tokens from the UNI LP farming program, which are not eligible to vote on governance proposals. As of now, it seems that there will continue to be an INDEX farming program in some form for the foreseeable future, meaning this problem will continue to persist. This problem disproportionately reduces the voting power of smaller holders, who have to claim infrequently due to gas costs. The solution to this that I propose is to count users’ unclaimed tokens in Snapshot votes.

Motivation:
As of now, unclaimed rewards not being counted in the vote is a very minor problem, but as the emission rate of INDEX rewards slows, it becomes more apparent. For example, if in the future, farming programs may produce a more modest 10% APY. A user staking just $500 worth of DPI would make $50 in INDEX rewards each year. At the time of writing this, claiming your rewards costs ~$5. This would make it highly inefficient to claim more than once or twice per year, significantly diluting the voting power of this user between claims.

Specification:
Snapshot allows organizations to select from a range of different “strategies” to count an address’s voting power. I have written up a prototype strategy that would include an address’s unclaimed rewards in their vote weight. You can take a look at the code here: https://github.com/ncitron/snapshot.js/blob/master/src/strategies/erc20-balance-of-with-unclaimed/index.ts. The rest of the implementation would simply require us to edit Index’s Snapshot config file to change out the strategy. As future INDEX farming programs are created, slight modifications may need to be made to the Snapshot strategy to account for a new RewardsDistributor.

For:

  • Gives small holders their fair vote
  • Shows that the Index Coop cares about the needs of small players.

Against:

  • Adds additional complexity to our Snapshot governance
  • Only affects a small proportion of DPI/INDEX holders

Poll:

Should unclaimed INDEX be included in an address’s vote weight?
  • Yes
  • No

0 voters

4 Likes
2

I agree here. Would also be interested to see if we can support voting with INDEX that is currently providing liquidity elsewhere. Namely the INDEX/ETH and INDEX/USDC pairs in Uniswap

3 Likes
3

That’s a great idea. The awesome thing about Snapshot is that changing the voting strategy is simple, and since it is all off-chain, the risks are relatively low.

3 Likes
4

Snapshot has a strategy for uniswap already, you just need to plug in the LP address

5 Likes
5

That’s awesome. We should definitely consider making INDEX-ETH LPs be able to vote.

6

I’m taking a look at this today for future votes.

1 Like