IIP-148: Delegate Aave to Governance House EOA Address

[Matthew_Graham]

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IIP: 148
Title: Delegate Aave to Governance House EOA Address
Status: Draft
Author: @Matthew_Graham, @Uhom, @ncitron , @DefiJesus and @oneski22
Gov Review: @sixtykeys
Created: 5th April 2022

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Simple Summary

This proposal is to delegate all of Index Coop’s Aave proposal and voting rights to an External Owned Account (EOA) managed by Governance House, [1]. This includes AAVE, stkAAVE and any other token that has proposal and/or voting rights in the Aave ecosystem.

Governance House will use the proposal and voting rights for the purpose of submitting and voting on AIPs and participating in Snapshot votes.

Aave Delegate Address: 0xE8e98fBbE83428aa087b29E003858F69855B50AE

Abstract

By delegating to an EOA address, developers like @ncitron, @DefiJesus and others within Governance House will have the ability to submit AIPs. This is critical as submission of a proposal must be performed from an EOA address and can not be performed from a multisig address.

This proposal enables Governance House to actively participate in the Aave governance process without the need to continually submit IIPs requesting access to the proposal and voting influence.

Motivation

Even more important than the ability to vote, is the ability to put forward proposals on Aave. Proposals can only be put forward by an EOA address. Thus the need for the Aave proposal power to be delegated to an EOA address.

In order to submit an AIP, a minimum number of votes is needed to meet the proposal power requirement for creating and sustaining a proposal, [2]. For example to have DPI listed on the Aave mainnet Arc market, we need 80,000 votes to meet the proposal power requirement, [3].

As of block 14520930 (Apr-04-2022 05:44:35 PM +UTC), the DPI holds $20.9M worth of AAVE or 91,086.336396 votes.

To provide a flavour for some of the more immediate intended uses:

• Add DPI to Aave mainnet Arc market, [3].
• Add DAI to Aave mainnet Arc market, [4].
• Change risk parameters on Aave mainnet Arc market, [5].
• Introduce Liquidity Mining to Aave mainnet Arc market, [6].
• Change AVAX risk parameters on Aave Avalanche V2/V3 market (AVAX2x-FLI), [7].
• Add stMATIC to Aave Polygon V3 market (icMATIC), [8].

The examples above are only the first of many governance activities that Governance House aims to provide. These kinds of proposal submissions benefit Index Coop’s products (e.g. via listings), as well as benefiting the underlying tokens which is great for relationship building. For instance by expanding the product offering, improving resiliency, decreasing risk, improving LM expenses and much more. Thus again benefiting products like DPI indirectly, as the strength of the underlyings protocols increases.

Specification

Index Coop delegates all (DPI plus other holdings as they emerge) Aave proposal and voting power to the ethereum address: 0xE8e98fBbE83428aa087b29E003858F69855B50AE which is then to be used by Governance House.

All AIPs submitted by Governance House will automatically use the AAVE voting rights to cast a FOR vote.

Do note, Tribe DAO and others also delegates AAVE/stkAAVE to the stated address, [9].

As a condition to receiving this proposition delegation, Governance House is required to abide by Index Coop’s Governance and the MGC when executing votes on Aave Snapshot and Aave Governance. The metagovernance bot will continue to publish AIPs on Index Coop’s Snapshot page in line with the current process with no change in how Snapshot is currently functioning. The MGC will continue to function as is outside of the Governance House proposals.

References

[1] Governance House
[2] Governance - Governance
[3] ARC - Add DPI as Collateral on the Aave Arc Market - Governance - Aave
[4] ARC: Adding Multi-Collateral DAI to the Aave ARC Market - New Asset - Aave
[5] ARC - Update Risk Parameters Mainnet Arc Market - General - Aave
[6] ARC - Continue Liquidity Mining Program on Aave V2 Ethereum market and Introduce Liquidity Mining on Aave ARC market - General - Aave
[7] ARC: Avalanche Market - AVAX Risk Parameters Update - General - Aave
[8] Proposal: Add Support for stMATIC (Lido) - New Asset - Aave
[9] FIP-78c: Meta-governance - stkAAVE (Aave) - Proposals - Tribe

Vote

FOR

• Delegate Aave proposal and voting power to 0xE8e98fBbE83428aa087b29E003858F69855B50AE.

AGAINST

• Do not delegate Aave proposal and voting power to 0xE8e98fBbE83428aa087b29E003858F69855B50AE.

Copyright

Copyright and related rights waived via CC0.

[mel.eth]

gm @Matthew_Graham -

Given this removes execution ability from the mgc, perhaps indefinitely the way it reads, please outline the execution specs for the various listings, who is in the multisigs that will execute, and at what point in time and process the delegation will be returned to Index Coop. I was under the impression Govhouse would be established as a subdao prior to being utilized; this seems rushed and maybe even a way to get half pregnant before saying our vows. Maybe you can speak to that order of operations here as well. Thanks.

[Matthew_Graham]

Hi @mel.eth,

The AIPs are to be submitted from an EOA in the same manner as we have done in the past. Please note, the MGC consists of @Matthew_Graham, @Lavi, @ncitron, @yuan-han-li and @oneski22 and of these five people, currently four are in Governance House. We hope @yuan-han-li joins in time Governance House is already in operation, the payloads for an AIP has already been written and reviewed by Aave. There are several more currently being worked on.

I’m not sure what execution specs you are referring to. I see this as the same as prior AIP submissions whereby the voting rights were delegated to an EOA. The point of difference is there is no appetite to submit an IIP for each time Governance House is to use the voting rights. This is a single IIP that enables Governance House to work with the Aave team to submit AIP as and when required.

[mel.eth]

@Matthew_Graham

The AIPs are to be submitted from an EOA in the same manner as we have done in the past. Please note, the MGC consists of @Matthew_Graham, @Lavi, @ncitron, @yuan-han-li and @oneski22 and of these five people, currently four are in Governance House. We hope @yuan-han-li joins in time Governance House is already in operation, the payloads for an AIP has already been written and reviewed by Aave. There are several more currently being worked on.

I’m not sure what execution specs you are referring to. I see this as the same as prior AIP submissions whereby the voting rights were delegated to an EOA. The point of difference is there is no appetite to submit an IIP for each time Governance House is to use the voting rights. This is a single IIP that enables Governance House to work with the Aave team to submit AIP as and when required.

It appears that in your short time on the MGC you have managed to capture it; impressive work but strongly AGAINST, probably forever. Your tone here given the gravity of what is being proposed is unacceptable to the extreme imo. I certainly do not support transferring this much hard power to an entity that refuses to even outline an operational spec or detail executors on the multisig. AGAINST AGAINST AGAINST until you can tell this DAO what is actually being proposed here; your cavalier response has only served to weaken my confidence in this new GH entity you’ve proposed and appear to already be utilizing, despite the messaging that it would be a subDAO to IC (I don’t see how that’s true at all except that you need access to IC’s voting power to monetize it for the ‘subDAO’ contributors specifically with no clear path to DAO revenue).

@Matthew_Graham

The MGC will continue to function as is outside of the Governance House proposals.

The MGC will continue to function as is, period. There is nothing that will change that outside of an IIP and this bit of pork in a delegation IIP is not it. Please refrain from referencing GH until it exists in the eyes of this DAO as you’re way out over your skis here in procedural terms.

[shawn16400]

Hey Matthew, thanks for the clear conversation in the MoneyTalks session earlier this week in relation to GovHouse. I feel better about the proposal. I get the market-shifting power of metagovernance and unchecked, it scares me. This is not hyperbole. Mishandled, today it has the power to undo /bury the Index Coop, and in time, it will have the power to damage defi.

This said, I do think IC has been underserving metagovernance, and in the absence of progress, GovHouse might be the right solution.

But the subDAO has not yet been established by IC.

I am seeking to understand, but I think in FIP-78, I think you are already asking FEI to change the stkAAVE address from the Index MGC to the GovHouse (multi sig?):

In the “AAVE ARC - Adding Multi-Collateral DAI to the Aave ARC Market” you are also suggesting GovHouse is already a part of Index:

There are a couple other examples where GovHouse is eluded to as kind of a done deal. I think the time and advocacy you have put into standing up GovHouse is exactly what is needed to turn the power of Metagovernance into reality. I applaud you for that and directionally you are making all the right moves to harness this power. However, I do think we need to come to a decision on if / how to move forward with GovHouse before we start shifting addresses.

damn. these take forever to write.

[marshmellow]

I agree with @mel.eth and @shawn16400 — the Index Coop community has not approved the formation of Governance House as a subDAO. So to put forth an IIP to delegate voting power to an entity that, as far as IC is concerned, does not exist, feels premature, to say the least.

[funkmasterflex]

Considering we’ve already delegated Aave tokens previously, I am struggling to understand the pushback. IIP-124 - Delegate Aave to EOA Address for Cross DAO Polygon Aave Market Changes

We need to move faster as we attempt to partner with the ecosystem. It is shocking to me that proposals that attempt to take action to launch more products and strengthen current offerings are dismissed due to process.

While there are some steps to solidify Gov House within IC these actions have already taken place in the past with MGC. I’d also add that Gov House has already begun voting in elections with delegated tokens.

I plead that operational inefficiency does not continue to plague growth initiatives. To say “bit of pork” to a proposal that grows Index Coop is ridiculous. This would be a concrete action that helps Product and Growth. This is the type of initiative that Governance Nest should support rather than continuning to be an operational burden.

[mel.eth]

To be clear Governance Nest is not acting as a blocker and I personally am supportive of the outcomes outlined by the means previously used, which are effectively the same actors.

“The pork” is utilizing an entity that has never been used for this purpose relative to IC, lacks any clear DRIs to IC, has no operational oversight (or even transparency) by IC, and appears to be accumulating INDEX governance power by calling itself a subDAO without actually having to formalize that arrangement prior to use.

The gist @funkmasterflex is that the proposer could effect this outcome without the use of GH and so drawing it in by inference is read here, by me, as attempting to backdoor GH into IC without running it through the governance forum in a transparent way. While I agree that as you call it, “operational inefficiency plagues growth initiatives”; this is a function of the “growth operators” using their hard power (the ability to propose on Aave) which they derive from IC to extract fees to a poorly defined group of contributors and non-contributors in a subDAO that doesn’t appear very ‘sub’ in it’s current ideation.

I don’t disagree that this proposal should happen with GH stripped from the text (until it’s an IC subDAO), and that the GH proposal should get a fair shake - but this proposal is suboptimal of both outcomes. Metagovernance power provides the only external value-proposition that the INDEX token has and there are aspects of the GH proposal that are concerning, including a lack of clarity around fee generation and use. In my opinion there is extreme risk to acknowledging and dedicating voting power to an entity prior to fully scoping that entity.

[JosephKnecht]

Hi @mel.eth

What are the steps to make a subDAO?

[bradwmorris]

Appreciate this has moved rather quickly and subDAO is new territory, but I think there’s a very small window in which this could go wrong?

If I’m understanding the original Governance House Proposal correctly, there is no incentive for Governance house to abuse its power. The more tokens delegated, the higher the responsibility and pressure to ensure delegated votes are used ethically. If they screw up, delegated votes are removed, reputation is tarnished and GH collapses.

I might be missing something here? If not, I say we should move forward with the subDAO as efficiently as possible. This seems like a perfect use case.

Would love to see existing MetaGov and GovHouse come to some sort of beneficial/collaborative outcome.

[mel.eth]

good call-out @JosephKnecht, discussion here

[Matthew_Graham]

Hi @sixtykeys,

I believe if we follow the process, we can assign an IIP number and we can proceed to schedule a vote for Monday 11th 2022.

Thank you in advance.

[JosephKnecht]

Hey @Matthew_Graham

I think part of the confusion is that the definition of a “subDAO” can range from being very lightweight to very heavyweight. For example, it could be simply moral support and co-branding all the way to token swaps, joint governance, and revenue share.

In the absence of a process, if GH is seeking some kind of formal recognition as a subDAO I’d recommend putting a brief definition in the IIP.

Cheers,
JK

[shawn16400]

@bradwmorris

there is no incentive for Governance house to abuse its power

Hey Brad, assuming someone is caught. GovHouse and the (five - or six?) unnamed delegates have the potential to peddle tremendous influence, and with that comes the risk of nefarious activity. How much does a vote or advocacy for my protocol cost? $10K? $25K? In pre-listed tokens? That seems like quite some incentive.

The better question is, what visibility is going to be provided so we don’t have to trust the delegates?

Who are the delegates? How are they selected to be a delegate? How many of them are there? What principles do they uphold? How long is their term? Can they be removed?

The red flags I am starting to see include:

• Relying on organizational reputation to drive good individual behavior
• The missing operational depth to the proposal (Delegates: who, how, when, how long?)
• The gaps in delegate voting transparency (who voted for what, was there dissent, was there a meeting, etc. etc. )
• Asking FEI to change delegation addresses from IC to GovHouse before IC has made a decision
• It is not ambitious enough - it lacks purpose

These are not insurmountable issues and they can be addressed. But in its current form, the proposal is less decentralized, less transparent, and less democratic than the existing (and imperfect) MGC.

I think this initiative has all the right focus. I think Matthew has done more to focus the power of metagovernance in the past three months than anyone else in the history of DeFi (including the GovNest). What is missing is to fill out the proposal with regards to transparency and the path to decentralization. And I argue those should not be an afterthought. And it needs purpose.

For the Index Coop today, metagovernance is not part of our core mission; and it’s an ancillary benefit linked to the nature of indexes. And Index Coop has been treating it as such.

Could metagovernance support the mission of Index Coop? Yes, absolutely. If we were serious about “unlocking prosperity for everyone” the purpose for our metagovernance could be to advocate for proposals that bring defi to underdeveloped economies, bank the unbanked, and get defi jobs into the hands of underrepresented populations. Would it be easy? nope. Would happen quickly? I doubt it. Would we generate positive coverage for such stances? Absolutely. Would it draw conscientious buyers to our products? Hell yeah. Would it help recruit and retain higher quality contributors at a lower cost? For sure. Would it change the world? I think it could have a shot…

Is this just a bunch of pollyannish feel-good goblity-gook? Might be, but I don’t contribute to IC for the money.

[GovNest]

Hey @Matthew_Graham , please remember to tag the @GovNest account next time, as per the guidelines outlined here.

An IIP number (148) has been assigned and the 48 hour discussion and review period has begun. A GovRep (@sixtykeys) has been assigned to carry out the IIP Process. And this vote will be queued to begin on Monday 11th April 2022 as per the authors request.
An overview of the IIP Process can be found here.

[Matthew_Graham]

Hi @sixtykeys,

Please put this proposal on hold. I believe further discussion may be needed.

We will proceed to explore other means of attaining proposal power to progress the DPI listing and other initiatives.

[sixtykeys]

Hey @Matthew_Graham this proposal is now on hold, and will be moved back to the draft state. It will remain in the draft state and the IIP No. will remain assigned until you wish to proceed.
Please note that the 48 hour discussion period will be required if you wish to change this proposal to ‘proposed’ again. Once you are ready to schedule the vote again, please re-request here by tagging myself and the @GovNest account.
And if you decide you no longer wish to move forward with this proposal, please state on that intention on this post, and it will be considered cancelled.