We’d like to propose a new process for Meta Governance Proposals (MGPs), that is separate from the IIP process.
We expect more requests to use some of the underlyings in the DPI to come in from a variety of stakeholders, and having a structured process in place that defines how to treat these requests is key for the Index Coop’s meta governance responsibility.
With Index Coop’s products growing at a stunning rate, so does the potential influence the Coop has on the protocols for which meta governance is active. We are already seeing this regularly in our current votes. For example, in the recent Aave votes, IC was in top 4 or even the top 3 in terms of voting power. On Compound votes IC is usually among the top 12, and in the most recent Yearn vote, the over 250 YFI in DPI led to IC being the biggest voter.
This strong influence does not remain unnoticed and naturally, people start to think of IC when the need for voting power arises. One recent example was IIP-67, where crypto analytics firm Flipside reached out to IC with the request to delegate 1.5M UNI tokens within the DPI contract to Flipside, in a one time delegation act. Flipside needed enough UNI in order for them to create a proposal (minimum UNI required to create a proposal is 2.5M UNI). This use case of the UNI token within DPI has led to some discussions and the vote was contested with only 64.3% voting FOR.
However, we do expect more of these requests coming in and in order for future proposals to have a clear path and to provide some orientation, we’d like to establish a dedicated Meta-Governance Proposal (MGP) track.
In order for us to have a common understanding, we first want to define the main points of what differentiates an MGP from an IIP. There are four points that define an MGP:
- Tokens under IndexCoop control - An MGP is a proposal that targets the use of the governance powers of tokens that are under the control of the IndexCoop.
- External requestor - An MGP is a request that comes to the IndexCoop from a source that is not the relevant underlying protocol. With the intent to use the Index Coop’s meta governance powers in any way other than voting for an existing proposal. (e.g. use AAVE to create a proposal for adding a token onto the Aave market).
- Use the tokens to create a proposal - An MGP is different from a normal meta-governance vote, in that it aims to use the underlying tokens to create a proposal, not to vote on a proposal (as that’s done by $INDEX holders).
- One-time delegation - An MGC is the request for a one-time delegation of tokens for a short period of time to the requestor’s target, in order for them to create a proposal.
- A forum post is created outlining the Meta Governance Proposal [MGP] to the Index Community. In addition to the full details of the proposal, the proposing party should explain the benefits to the IndexCoop and the underlying protocol.
- Should within 30 days, 1% of the circulating supply indicate support of the MGP via publicly verified messages, the MGP will receive a number [MGP-XX] and proceed, otherwise, it shall be canceled. A wallet can only signal support for one (1) proposal for each protocol at a given time. [Example: if there are 2 Compound proposals, a wallet can only signal support for 1 at a given time]
- Once the 1% threshold is reached, similar to our product assessment, 3 different IC groups: the Meta Governance Committee, the BDWG and the relevant protocol ambassador, will work together to produce a “governance assessment” 4 days after the threshold is reached.
- 7 days after the 1% threshold has been reached, the proposer can conduct a community call, and then call for a Snapshot vote which will go live for 72 hours.
For an MGP to pass, it needs to fulfill the following quorum requirements:
- 10% of all $INDEX in circulating supply must have participated in the vote
- 66% (2/3) of the participating votes must be FOR the MGP
If the MGP passes, the MGC and EWG will work with the proposer to ensure the proper steps are taken to execute the MGP.
Due to the various gas costs and engineering effort that is expended in executing an MGP, a proposer will be required to pay the IndexCoop 2 ETH (payable to the Index Coop Operating Account). The MGC has the discretion to waive this fee. Such a waiver and the reasons for granting it will be outlined in the “governance assessment”.
- Establish a new class of governance proposals, Meta Governance Proposals (MGP), that are exclusively used for proposals that use the IndexCoop’s meta governance power in any way outside of voting on existing proposals.
- MGPs will require 1% of the circulating supply to signal support within 30 days of them being posted on the IndexCoop governance forum, otherwise, it will be canceled.
- After 1% is reached, the proposer will wait at least 7 days, before having a community call and then calling a snapshot vote. A community call must be held prior to a snapshot vote.
- The snapshot vote will be live for 72 hours, a quorum of 10% of circulating supply must be reached, and 66% (2/3) of votes must be FOR in order for the MGP to pass.
- The proposer will pay 2 ETH to the Index Coop Operating Account (or other address specified by the Treasury Working Group) prior to execution, unless otherwise waived by the Meta Governance Committee.
- Adopt the Meta Governance Proposal framework as described above.
- Do not adopt the Meta Governance Proposal framework as described above.
This proposal introduces a large change to our governance structure and therefore the authors are requesting an elevated quorum of 10% circulating supply, with 60% voting FOR in order to pass this IIP. These thresholds are in line with the DG2 requirements, which is the most major decision we presently make via governance.
Current IndexCoop Token Holdings & Proposal Thresholds
|Protocol||Tokens required (/delegated) to create a proposal||# of tokens IC has||% of threshold requirements||Governance Tool||Comment|
|Aave||80k (0.5%)||102k||100%||Aave Governance V2 (short time lock)||Controls Aave V1 and V2, risk parameters, token distribution, fees, etc.|
|320k (2%)||102k||31.8%||Aave Governance V2 (long time lock)||Controls changes to the AAVE and stkAAVE token and updates to governance parameters|
|Compound||65k||42.8k||65.8%||Governor Bravo||DPI holdings only|
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