Enable Full-Time Contributors to Vote with Vesting Tokens

IIP: [xx]
Title: Enable Full-Time Contributors to Vote with Vesting Tokens
Status: DRAFT
Author(s): @gregdocter, @darkforestcapital, @ncitron
Discussions-to: [xx]
Created: August 10, 2021
Requires (optional): [n/a]


Simple Summary

‌Enable current and future Index Coop full-time contributors hired by the Index Coop via IIP to vote with the tokens held in their vesting contracts.

On day 1, this will allow a total of 75,000 INDEX (15,000 INDEX * 5 current IIP-hired contributors) to be used for Snapshot IIP voting.

Abstract

Add the full-time contributor vesting contracts to IndexPowah contract by calling the addVesting function from the IC ops multi-sig controlled by @gregdocter, @puniaviision, and @dylan.

Motivation

Protocol governance is a critical pillar of the Index Coop’s long-term success.

This proposed change puts more governance power in the hands of individual Index Coop community leaders who were hired by the Coop.

Each of these contributors has reason to wield their voting power in a way that is aligned with the long-term interests of the Index Coop, based on:

  • Community Reputation & Knowledge
    • Leaders in the community
    • Engagement in the community
    • Community confirmed via IIP (vesting portion of compensation packages)
  • Skin in the game
    • Stands to lose economic upside
    • Stands to lose reputational upside

We granted this power to our investors via IIP-41. It is time we do the same for full-time contributors.

Last but not least, this can be considered an early step on the path to addressing the voting power issues first raised early in 2021. More is needed.

Specification

Overview

To enable current and future full-time contributors to vote with their vesting tokens, we will utilize the IndexPowah contract. This contract creates a mock ERC20 token that only has a balanceOf function. This allows for us to encode new rules for determining one’s voting power. The contract already allows us to add vesting contracts to it which will have their votes counted towards the intended recipient of the tokens.

Additionally, this contract counts votes in accordance with the rules specified in IIP-9, IIP-38, and IIP-41.

Rationale

Snapshot limits each space to a maximum of five strategies. In order to track as many vote sources as possible, we will need a total of eight strategies. This method reduces our space to just two strategies (erc20-balance-of and delegation). This idea was inspired by Sushiswap’s SUSHIPOWAH contract which serves the same purpose for the Sushiswap community.

Technical Specification

  • Estimated Eng. hours to implement: 1 hour
  • Engineer(s): @ncitron

The IndexPowah smart contract was written to implement IIP-41, so we will not need to complete any additional smart contract work to implement this IIP. We will however need to add the full time contributor vesting contracts to IndexPowah contract by calling the addVesting function from the IC ops multi-sig controlled by Greg, Punia, and Dylan.

The source code and tests for the IndexPowah contract can be found on GitHub:

The current deployment of the IndexPowah contract can be found on etherscan:

Copyright

Copyright and related rights waived via CC0.

8 Likes

While I support the general idea, I want to push back on the immediate “vesting” of governance powers.

I would push for something more like a linear vest. I don’t necessarily thing someone that is immediately hired by the coop should have their full 15000 voting power vested on day one.

For investors who bought their tokens, and individual holders who also either bought or earned their tokens governance unlocks make sense. However in this case there should be some time function with the governance vesting.

8 Likes

Signaling that I agree with this sentiment, to the extent that I planned to say something along these lines before seeing that @oneski22 already had. This is significantly different from allowing investors who purchased vested tokens to vote with them. There is a clawback clause in place for those contributor vesting schedules and a scenario of a contributor wielding not-yet-earned governance power is not ideal.

Vesting in the contribution sense is essentially IC stating that the work and dedication to date is valued, and should further work and dedication ensue there is a defined reward. Vesting is not, however, a credit card for governance.

If there is a strong desire to have greater contributor influence in the governance process, I recommend that more be done to get INDEX into the hands of contributors.

7 Likes

I just want to push back a bit on the concerns by @oneski22 and @mel.eth

We continue to say that the community has no governance power. Yet, this pushback is directly limiting community governance power.

Further, I find it hard to understand why we don’t trust FT contributors to vote with their vesting tokens? What kind of message does that send? Aren’t FT contributors the people we want to have more governance power when it comes to voting? I acknowledge that we want more leaders in the community to have that governance power, not just FT contributors, but that’s a different conversation. Also, with the clawback cause, I would argue that FT contributors have significant capital at stake and can be punished for malicious voting.

I also have a problem with saying that investors earn the right to governance just because they put money in but FT haven’t earned that right even though they have been working and building the protocol for a better part of the year.

I do see your arguments when it pertains to bringing someone in FT who wasn’t previously part of the community. Maybe a solution to that is individual snapshot votes for each FT contributor to vote with vesting tokens as opposed to a blanket approval.

6 Likes

Hi @verto0912 -

While I’m in full agreement that more voting power should be in the hands of contributors relative to a) what is now and b) other stakeholders in a community-lead and -governed organization, I don’t believe that unlocking the governance power via the scheduled reward for yet-to-be-performed work is the answer. I’m not pushing back against the concept of giving more voting power to the community, I’m pushing back against this method of doing it. Contributor retention is more akin to an unlock than a vest, and unlocking the full utility on day 1 has a deleterious effect on the motivational aspect of that 2-year unlock. I would support a linear vest as raised by @oneski22.

Further to your point regarding a lack of governance power held by the community: there are ways to unlock significantly more community/contributor voting power than proposed and more equitably put it in the hands of a greater number of aligned contributing community members. Perhaps we unlock the governance power of the IC community treasury by a schedule proportionate to the metal owl rankings; perhaps the Autonomy Group additionally works out a deal with Set and/or DFP to utilize their untapped governance power in a way that’s delegated to the contributor community when they aren’t using it. There are unexplored options with significantly greater impact.

What you’ve read from me is not in any way to be construed as a judgement on the ability of FT contributors to responsibly wield governance power, but rather a criticism of the narrow concept of unlocking governance, in-full, ahead of the contribution that it is intended to reward. While I appreciate @gregdocter’s comparison of this proposal to IIP-41 unlocking investor governance, and your appeal to fairness in that regard, the difference is that those investors have put their full capital at risk, while FT contributors have not, they can walk away at any time, keep what they’ve earned, and put their capital (in this case their time and focus) to work elsewhere.

In short, I’m more grateful to yourself and the other FT contributors than can be expressed here in a few words, from the bottom of this Owl’s heart - Thank You; however, this proposal does more to concentrate voting power within the contributing community than it does to empower that community overall. I challenge yourself, the other FT contributors, and the authors of this proposal to do better on behalf of this community in this regard. We do need more control of our fate as an organization of aligned contributors; I’m inspired to see that FT contributors are tackling this challenge and regardless of the result here I sincerely hope that continues.

4 Likes

This makes a lot of sense to me, but there should be a balance that can be found whereby active contributors are able to control more of the vote - without waiting the entire vesting period. Maybe a 6 month period at most.

Realistically, much of the discussion about autonomy is just window-dressing until we start to empower the people who are here every day serving our community, and that have the most context about what is going on.

I think there is value here in putting the abstract to one side and thinking about the individuals we are actually talking about.

Does anyone actually disagree with the prospect of @verto0912 @DarkForestCapital @BigSky7 @LemonadeAlpha @jdcook having more influence over the direction of the Coop, and why?

These are some of the people in the Coop that I respect most (I know I am not alone here), and who clearly do some of the heaviest lifting in keeping this DAO moving forward. We talk constantly about the need to empower our community. If it does not look like trusting these people to act in our interests, then what does it look like?

7 Likes

Fantastic post @mel.eth. I could not have said it better myself.

I am 100% aligned with this thinking and 100% in support of what @mel.eth has outlined in his post.

3 Likes

Wanted to clarify my thoughts and propose a potential change to this IIP.

Firstly, I wanted to make it clear that I have full faith in the current full-time members of the Coop.
@verto0912 @DarkForestCapital @BigSky7 @LemonadeAlpha @jdcook (and soon to be @ncitron) have been invaluable to the growth and success of this DAO.

I strongly agree that we need to continue giving the community more power in DAO decisions, we constantly talk about IC being a 3 legged stool with Set, Pulse, and the IC community, and at times it feels as if IC Community has the least voting voice.

My concerns primarily are a departure from industry standards and the lack of cliffs. Additionally, while I understand the logic behind @verto0912’s suggestion for voting on gov unlock for each FT, I am a strong believer in having a single consistent documented process.

As I stated earlier I am a big believer in cliffs. We talk a lot about the need to build trust and confidence with the community especially as you rise through the ranks. While generally an optimistic person, giving someone 15,000 INDEX voting rights immediately is not aligned with how we operate, especially if we ever hire outside of the community. We have cliffs on the equity vesting contracts, to ensure that the hire is a good fit for the team. We should have a cliff on the governance vesting to ensure that the hire is a good fit for the community.

I would propose a few different governance power vesting schedules and would love to hear community feedback:

1: Simple 6-month cliff, after 6 months full 15,000 INDEX is eligible for voting.
2: At 6-months (cliff), 5,000 INDEX is eligible for voting, with the next two 5,000 INDEX blocks unlocking at 9 months and 1 year of hire date respectively.

4 Likes

There has been a lot of great discussion on the pros and cons of this IIP, but I’d like to address a few points.

First, IC governance is about to get a lot more whale heavy. I have already been reached out on multiple occasions to help get large investors set up for voting. Additionally, protocols like FEI are in the process of acquiring 100k INDEX. This will only diminish community voices. While there are other ways to increase community voting power, I believe this one is the best.

I also wanted to address @mel.eth’s point that our sale investors have more on the line. I believe this to be false. For many of our investors, their INDEX stake makes up just a tiny percentage of their overall portfolio. For the full time contributors, their vesting INDEX stake is likely a significant proportion of their net worth.

I do like the direction that @oneski22 is going in though. I believe the first option he outlined to be better as it is technically easier to execute (no new smart contracts required). Additionally, it gets more governance in the hands of full timers more quickly. I would however like to propose an amendment of sorts to his idea. Instead of the cliff starting six months after their vesting contract start date, we can start it six months after the contributor first joined the IC. This has the benefit of keeping governance out of the hands of external hires for some time, but still gets vote quickly into the hands of internal hires who already have had at least six months within the IC to gain context. Of course, I am biased as the addition of this clause would grant me the full voting power immediately, rather than just the four earliest contributors.

6 Likes

Simple 6-month cliff, after 6 months full 15,000 INDEX is eligible for voting.

@ncitron is that ^ what you are pointing to amending with something like

2 Likes

Yes! Thanks for clarifying.

1 Like

We are already seeing this

I’m with you @afromac in the sense that I trust the contributors subject to this proposal to generally vote in alignment with organizational sustainability; they are trusted by the community, and this incrementally would move us toward a more contributor-governed org. I’ll ask some questions here, however, that may help highlight the points I made above:

  • Why just these 5 contributors when there are others that have long-term standing, demonstrated commitment, and context? The first example that comes to mind is @overanalyser. Why stop short of engaging more contributors in the process, thus reducing the potential for misalignment with the broader community?
  • Why not set up a delegation process for the community treasury if the desire is to have informed and provably-committed Owls more active and powerful in governance? Why not let the contributors in question do a simple majority vote among themselves and then use all vested INDEX as a voting block?
  • Do the Owls in question actively participate in governance now and to what extent? Is there a demonstrable likelihood of this increasing community participation in governance?
  • Why not directly incentivize contributor participation in governance?
  • How would you and the subject Owls respond to the assertion that they are being granted voting power that rightfully resides in the community treasury, and not their wallet?

I feel that salaried contributors via this proposal are demonstrating a cavalier stance toward governance power and signaling little motivation for distributing that power to the broader and largely speculative contributor community. These are governance tokens, the very means we use to organize toward productive ends, and we’re very much putting the cart way out ahead of the horse if we start moving that power around without people having earned it yet. Just because I trust a person doesn’t mean I want to set up an entire process that relies on trust. Those fortunate enough to pull a salary here have earned the right to 15,000 votes over the specified timeframe and accelerating that sets a dangerous precedent.

That said, I’m about 2 hours into drafting thoughtful responses here, not getting compensated for it, while those that would benefit are, and are attempting to gain as-of-yet unearned voting power on top of what they have . . . this goes against the core tenet of rewarding based on impact and creates two voting classes. There are way better solutions to the challenge presented - I’m asking that they be explored, as this is just one option and in my opinion one that is somewhat tone-deaf to the broader contributor community’s desire to have more say in our collective fate.

3 Likes

Had a quick chat with Noah earlier hoping to find a simple compromise that could be baked into the contracts, but it doesn’t exist without completely rewriting the IndexPowah contract which isn’t worthwhile just for this.

The next best step seemed to me to be a 6 month cliff unlock so I agree with your suggestion here David, and hope that represents a good middle ground.

To be honest given the noise made about autonomy it’s baffling to me there is so much pushback against this idea. It implies that a malicious actor who buys on the market is fine, but someone who has worked into a FT position might somehow represent a danger to the governance process. As AG pointed out there is a direct clawback in the vesting contracts which means any deliberately malicious actions would stand to lose any contributor a great deal from day 1.

5 Likes

I think this is a step towards that. This is progressive decentralization in action, in my eyes. It doesn’t end with these contributors; it starts with them.

To the rest of your questions, @mel.eth , I would respond that you are making the point - quite well - that the social norms around this kind of action are unclear at best. We are trying to achieve decentralization, with the best of intentions, but people have concerns about the seemingly ad hoc nature of the agreement and the implications for other people in the Coop.

The idea that I keep coming to, is that if we are going to be some kind of a democracy, we are going to need some kind of a constitution. It won’t be perfect, but it should go some way towards creating a framework that we can have these discussions within.

2 Likes

Thanks @afromac; reading your response, your voice in my head, has got me thinking about this a bit more constructively, so thank you.

I’d like to leave it at this: I hate defending an idea I hold on philosophical grounds that is at odds with a strongly desired outcome. I’d like to see this proposal presented as part of a larger initiative that:

  • Includes analysis of relative voting strength broken down by Owl, Stakeholders, Set, and DFP;
  • Brings together the various aspects of governance needed to meaningfully shift governance power to the contributor community;
  • Puts a linear or cascading unlock of voting power in place for vested tokens of FT Owls;
  • Involves general disclosures where appropriate, and specific ones should they arise for a given vote, as this will hopefully remain regarded as a privilege requiring trust from the contributor community; and,
  • Involves a statement from the Owls in question regarding their commitment to use the vested tokens to vote in-line with IC sustainability, along with stated consequences should those commitments be broken.

Essentially, this seems to be part of a larger plan, so I’d like to know that plan in more detail; and if it makes sense then, you’ll have my support. Implementing the part that potentially benefits those in a position to best drive meaningful change first, however, doesn’t give me sufficient confidence that the remainder of the plan will be a priority.

Dear FT Owls: I implore you to give some serious thought to the plight of the dozens of Owls that work day in and out here with no promise compensation, just the hope that some of you will find the work we do valuable and reward it. I have no doubt we’re all acting with empathy, but please be aware that defending a proposal for an instant 5-figure-INDEX governance unlock on the grounds of expediency and autonomy while essentially saying ‘just trust us’ when most Owls don’t crack the 3-figure-INDEX mark in a given month is likely to spur some strong reactions. If you want everyone that contributes meaningfully here to have a voice, it needs to be reflected in our governance process, and as it stands my already small governance voice within this community will be decimated if the proposal you are putting forth is put through without some meaningful increase in the governance power of the remaining contributor community. None of us would be here without you, but if you want to inspire continued buy-in, the deck shouldn’t feel quite so stacked. Thanks for reading this and I’m happy to chat more offline about any of this.

2 Likes

For me, I look at this with a real simple logic. Do we pay forward governance voting power for services not yet rendered based on trust or do we not.

If we do it for one type of contributor, then we shall treat all contributors equal. We do not want to encourage a tier ranking within the community.

Full Timers doing the same number of hours as a gold owl, arguably gets remunerated many multiple’s more. This was overwhelming clear when one full time hours gold owl transitioned to a full time contract. No material change in output, impact or hours of service and arguably no change in level of commitment either. But overnight, there was a material change in rewards. This is a design feature in the current structure.

Whilst there is two remuneration systems in place. I don’t not support adding benefits to a subset within the coop. We are a community of equals. I don’t agree with the renumeration divide. I do not agree with a governance benefits divide.

On the topic of Community ownership, this will only change if we review the genesis contract allocation. Only then will “Community Ownership” be of a comparable magnitude to other stakeholders. 0.15% x 100 = 1.5% This is tiny in the context of value add. Set Labs receives 28% which is oversized for the relative value add of the 60+ contributors in the community. Contributor ownership can only grow to be relevant with a genesis contract redistribution from Set Labs to Community.

Full Time benefits relative to Owls are growing further apart with proposals like this one.

5 Likes

A big fan of disclosures and hope more Owls choose to do them, especially if they are in a leadership or decision-making position. They should be more common in crypto and a great place for our DAO to take the lead.

4 Likes

I am against this proposal. @Matthew_Graham and @mel.eth have perfectly echoed my own thoughts in the comments below.

This comment from @fallow8 when the Autonomy Group was being formed feels highly relevant here as well.

2 Likes

So while we shoot ourselves down here, another 100k in voting power goes to outside parties / DFP / Matthew Graham.

Seems like this is an easy FOR. More community governance power unlocks to come, but this should be a standard.

4 Likes