[Discussion] Centralization in Index Coop Governance

[Metfanmike]

This is (unsurprisingly) another superb analysis out of the Analytics WG. Great job. The conclusions match what many in the community have suspected regarding participation and the sensitivity of single whale voters to the ultimate outcome.

With respect to the two proposed recommendations, though, there are live initiatives in both cases, so I was personally left wondering what actual actionable next steps there would be after reading this.

@jackiepoo

Move decision making power out of the IIP process and delegate it to formal bodies of contributors. This is already happening - for example the Metagovernance Committee was formed precisely to allow Index Coop to exploit its metagovernance power when the proposal does not reach quorum. We also recently formed a Wise Owls committee that was selected entirely by the contributors, and thus we formed an alternative body that can create mandates without needing the input of token holders. Index 2.0 was conceptualized precisely to advance this objective.

As you’ve said, this is already happening. Index Council and the Metagovernance Council are each a response to the governance issues you’ve observed in your analysis.

@jackiepoo

My proposal is to create something like a board of directors, with whom we can have dialogues with, and represent directly the views of token holders who dominate the IIP process regardless.

This is also happening. There has been an active investor relations effort run by @bax86 where he coordinates calls with these entities: 1kx, Sequoia, Galaxy, etc. Community members have had an open invitation to join these public calls since late summer. Typically, only 2-5 community members end up attending from what I’ve observed. A takeaway here could simply be to remind the community that these calls have been happening regularly, are open to community members, and to connect with Luke if you’re interested to learn more.

@jackiepoo

Furthermore, for crucial proposals such as a compensation proposal, we could be explicit about gathering feedback and buy-in from the board.

Joe and I presented the evolving proposal on those recurring investor calls over the last two months and made reference to gathering that investor feedback in the recent compensation post and on weekly Leadership Forum calls. This was part of a broad effort to gather feedback on the proposal from across the entire Index Coop community - not just from the participants from the Treasury diversification - but the VCs were a key consideration in part because they are such active voters.

@jackiepoo

If the question is, “should we pay contributors more to incentivize more high quality labor,” the answer is a resounding yes.

However, “paying contributors more” is emphatically not a solution to concentrated voting power in a 1t1v system. I would go so far as to say that plutocratic vote concentration in a 1t1v system is capitalistically inevitable.

A bit of a strawman here. “Should we pay contributors more?” wasn’t the question we posed. Rather, we asked:

• How do we attract and retain top talent? and
• How do we put more ownership in the hands of the community, particularly those that are the highest value contributors?

The latest Community Ownership & Compensation post lays out an aim to distribute a total of 22.5% of the overall Index token supply over a multi-year period, using the combined airdrop and dynamic staking model as the tools to do so. The dynamic staking model is purposefully structured to reward continued ownership to disincentivize selling. The proposed construct will admittedly (but also purposefully, for sustainability reasons) take years to achieve its 22.5% target. While it may still not singularly solve the governance problems you’ve laid out, community ownership is a primary motivation, and (I’d argue) it moves us meaningfully in the right direction.