Quorum for metagovernance voting will be reduced linearly from 5% down to 1% as support increases (on a per-proposal basis) to inspire greater decentralization and allow for greater participation in Index Coop metagovernance by the community. At present, the 5% quorum is a holistic blocker to participation given it is rarely achieved. This change allows for overwhelming support of a proposal to be executed directly; both reducing the workload on the MGC when a majority opinion is clear and creating a more decentralized decision framework for metagovernance voting.
This proposal changes the quorum calculation for metagoveranance voting from a flat 5% (with quorum failures going to the 5-member MGC to decide) to a linearly reduced quorum number as the percentage of votes cast FOR or AGAINST deviates from 50%.
At present quorum is rarely achieved during metagoveranance voting. At issue, non-whale interest is not sufficient to pass metagovernance votes despite regular INDEX voting. The fallback mechanism of the MGC will remain in place for contentious votes with low participation; however, the lack of ability to influence metagovernance by a majority of INDEX holders with no clear path to influence is suppressing the price of INDEX by creating a non-competitive metagovernance environment, currently advantageous only to large token holders and MGC members.
Quorum is a hurdle-rate that is in place to ensure that there is sufficient contextual input into a vote (using voting token amount as a proxy for interest+context). Quorum being too low means not enough context from the voting body has been aggregated, too high means that even well-considered voting by many won’t effect the desired outcome without MGC assistance.
A dynamic quorum essentially calls for greater participation depending on the binary diversity of opinions on that proposal. With the benefit of a fallback mechanism (the MGC) we can maintain the necessary forcing function (IC can’t re-run another protocol’s proposal due to insufficient quorum) so that a considered decision is registered in every case.
For example: At full support, quorum drops to 1%; meaning fewer voters can influence the vote. Quorum increases up to a maximum of 5%, should diversity in the cast-votes develop. In this way, contentious votes require greater participation and therefore context to pass without the MGC stepping in.
The drawback here is that achieving quorum on a typical proposal has finality (beyond a static quorum, the indeterminant result is considered executable prior to the end of the voting period). Dynamic quorum means that achievement of quorum cannot be determined until the end of the vote. The MGC would need to be prepared to render a decision should the calculated quorum not be achieved once IC voting has ended.
The calculation for Quorum on binary votes will be:
Q = -0.1*S + 0.1; Q >= 0.01 S = the greater of: |FOR| or |AGAINST| (as a percentage value of all votes cast)
Dynamic quorum examples:
|Quorum %||% FOR or AGAINST|
On votes with greater than two choices, quorum will remain at a static 5%.
Add the following text to posted metagovernance votes:
This metagovernance proposal is subject to a dynamic quorum requirement. Quorum for the INDEX community voting on this metagovernance proposal will increase from 1% to a maximum of 5% as support for the majority result decreases from 100%. Should quorum not be achieved voting here will be rendered void and the MGC will decide on this proposal as outlined here. More on dynamic quorum calculation can be found here.
- Rev 1: 09 May 2022 Changed minimum quorum from 0% to 1% and updated proposal body accordingly.
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