Title: IIP-64 - Methodologist Smart Contract Permissioning
Created: July 30, 2021
Following conversations with both methodologists and the community, we have aligned on the types of permissioning we want to give external methodologists over Index Coop products at the Smart Contract level.
This IIP will provide external methodologists security that the negotiated fee, fee split amount, and fee recipient address cannot be changed without their on-chain approval.
Upgrade previous Manager Contracts to provide security that the negotiated fee, fee split amount, and fee recipient address cannot be changed without their on-chain approval. Additionally, have this as an option for all future methodologists.
Every Index Coop product has what is called a “Manager Contract” [purposefully omitting details for clarity]. The Manager Contract generally defines key aspects of the product such as the methodologist address, fee, fee splits, and product specification/implementation [i.e. rebalancing logic, intrinsic productivity, metagov, etc].
Currently, for DPI, there is a 2/2 multisig control for changes that can be made on the manager contract. This means that any edit Set/Index Coop wants to make to how the DPI product works, requires the methodologist’s signature.
With the assumption that methodologists want less operational exposure, and to enable rapid technical improvements to our products, the FLI suite of products has removed that multisig requirement, and given Index Coop full control over product specifications. This means that the Coop can unilaterally control all the aspects mentioned above without needing a multisig transaction with another party.
DFP recently learned about this as Set wanted to upgrade DPI’s manager contract to the same one FLI uses. In our view, as a methodologist, they were naturally concerned about the changing permissions as it lets Index Coop arbitrarily change core aspects of the product, like fees, which makes it much harder for them to build a sustainable business.
While Set certainly understands their perspective on wanting increased permissioning, Set feels uncomfortable making the decision on what permissions a methodologist should or should not have without first consulting the community. We recognize that the initial set of permissions set on the DPI were not made with community input and want to make sure the community is involved as a key stakeholder in setting the standard going forward.
This conversation was opened up to the community and @BigSky7 and @verto0912 were chosen as Index Coop representatives to reach a resolution here. Both DeFi Pulse and Titans of Data have expressed their desire to have permissioning ensuring security around fee amounts and fee splits such that it can not be unilaterally changed by either the Methodologist or the Index Coop. Upon internal discussion, we decided we were happy to meet our external Methodologists here.
Change the existing Manager Contracts to remove the ability for Index Coop to change the fee, fee split, and fee recipient amounts without approval from the methodologist.
Update it such that both the Index Coop and any external methodologist need to approve any changes related to those previous 3 parameters.
- Update the Manager Contracts such that the Index Coop and the External Methodologist both need to approve possible changes to fee, fee split, and fee recipient”
- Do not update the Manager Contracts – the Index Coop remains in total control of the* fee, fee split, and fee recipient amounts without approval from the methodologist.