Metagovernance (and governance in general) faces enormous lack of participation.
- The quorum is usually not met.
- Token holders don’t read through the governance proposals nor discussions.
- Marginalization of the role of governance in the protocols’ functionality.
In my opinion, metagovernance is primed to become one of the biggest narratives in the future (decentralized infrastructures also have to be governed somehow). Curve Wars have shown us how impactful governance is, and how lucrative having voting rights may be. Index is primed to be one of the top protocols amongst these governance oriented ones. The FEI<>AAVE<>INDEX event (which I think was the coolest metagovernance event so far) has shown how important “crypto investment stewardship” might be in the coming years.
I’m proposing to try to make metagovernance as simple as possible. I’m proposing to have all proposals (even the more technical ones) explained and summarized so an average token holder who isn’t a DeFi expert can understand what it is about, and what consequences a particular proposal can bring.
I’m willing to contribute in that matter if the members of MGC would agree. I’ve been through the “Leadership & Governance” subforum and it would be an honour to cooperate with such minds with such backgrounds! Metagovernance, investment stewardship, dGov, DAO infrastructures are an area of my deep interest. I’ve been in crypto since 2015. Since 2020 I’ve been here full-time. This year I decided to start building and engaging instead of being just a passive investor.
Some brief example of the summary & explanation:
[Compound-107] - Risk Parameter Updates for 5 Collateral Assets
Explanation & Summary:
To increase collateral factor for 5 assets (USDC, DAI, MKR, LINK, YFI) by, on average, 2.6%.
- With increased collateral factor one can borrow more by, on average, 2.6%.
- With increased collateral factor one is less likely to be liquidated, ergo rekt.
GM @ELI5ofTLDR -
We’re of one mind on this and would love to have you join the discussion! GovNest in conjunction with the ICC is developing something like a template to provide reliable contextual information on metagov votes. Please attend the GovNest touchpoint or contact me directly to discuss; really appreciate the initiative and feedback here!
GovNest Meeting: IC | Gov Nest bi Weekly
Thursday, June 2 · 11:00 – 12:00 EDT (bi-weekly)
Google Meet joining info
Video call link: https://meet.google.com/syp-ipaz-dhk
Or dial: (US) +1 617-675-4444 PIN: 146 027 535 7834#
More phone numbers: https://tel.meet/syp-ipaz-dhk?pin=1460275357834
A summary of Metagovernance proposals is a great idea!
Absolutely agree with your takes on the importance of governance and the lack of participation which can become a real risk for projects - especially with on-chain voting and adjustable parameters. Small improvements such as a simple summary, explanation & context or translations could already have a large impact!
Besides that, we believe lack of governance participation comes down to a number of reasons for individuals:
Lack of immediate financial incentive
Too many (non-important) votes and voter fatigue
Too much is happening in the industry and attention is scarce (+ disadvantage for boring DeFi/governance)
Consequently, we believe projects should make it more clear what core teams decide, what governance voters can influence & decide on and reduce the overhead of countless, meaningless votes.
For a metagovernance project such as Index Cooperative, there will always be overhead and there are likely only a few individuals and specifically dedicated orgs - whether that is blockchain communities, investors or companies - that can provide meaningful governance input to a large number of underlying projects.
That said, I have been personally participating in governance across DeFi (incl. IndexCoop) with my personal accounts next to building and investing in the past years. For me, governance should ultimately be minimized for lower protocols, but at this early stage it offers lots of room for improvements and calls for immediate action.
That’s exactly why I started a new company which fully focuses on governance of top Web3 projects and supporting them with ecosystem building (See → scaleweb3). I’m looking forward to connecting with you guys regularly, to becoming very active in Index governance and I appreciate all delegated votes to scaleweb3.eth.
Great idea and thanks for the example. I think there’s a strong need for this.
Brief summaries & consequences as you outlined should help foster participation and discussion from members that typically may not get involved in metagovernance due to limited time & complexity of technical proposals.
Imo there’re different angles of this topic.
From INDEX’ holder perspective:
- I don’t see the reason to take part in metagovernance: too many proposals + limited time + no metagovernance tokens (AAVE, COMP etc) in my bags = from little to no interest in participating in metagovernance;
- hence making metagovernance simpler doesn’t change anything: I still don’t have interest in reading and thinking about other protocols’ proposals no matter how well they’re explained;
- I don’t mind if someone will make metagovernance decisions for me (metagov committee/metagov house) though I’d want to have the opportunity to influence these decisions (eg say “no” or bring a veto).
From metagovernance-will-be-next-big-thing perspective:
- what is the Index Coop’s value proposition for all these metagovernance games? I thought that main value is “levered metagovernance” aka “buy 100-AAVE-voting-power by buying $50k INDEX instead of buying $100k AAVE” - average INDEX holders’ activity will not show benefits of Index Coop’s metagovernance approach or benefit Index Coop in other ways;
- if we really want to represent Index Coop as metagovernance-field-player we first need to formulate the value proposition Index Coop can bring to the market;
- in other words: (1) if we want Index Coop will be metagovernance hub let’s discuss how could this feature/product be deployed and what Index Coop can propose to other protocols (besides the pointing that one year old AAVE-INDEX-FEI example), (2) if we want INDEX’ holders to be more active in metagovernance let’s decide if it’s really what Index Coop’ community should be focused on and what’s the point of motivating this kind of activity.
Since there’s no harm to Index Coop in general or INDEX token from this proposal I don’t mind if all metagov proposals will be explained and summarized. In the same time since this “contribution” will not have any positive effects on Index Coop products and will not bring any benefits I don’t think the “contribution” should be payed/compensated with INDEX tokens.
As of now, metagovernance seems to be an additional feature of Index Coop, so I fully understand your concerns about participation in this kind of activity.
But to just bring one example of metagovernance that has direct influence on you, as a token holder:
@Matthew_Graham proposed listing DPI on Aave V2 Markets. Expanding to other ecosystems and chains (Mathew’s activity also led to the creation of the MATIC2x-FLI and iMATIC-FLI) is undoubtedly bullish for Index Coop as a protocol and its users/token holders.
To mention a non-technical aspect of such an event: raising awareness of IC amongst other communities brings opportunities to potentially onboard new users/contributors.
Synergical metagovernance activity can bring IC a lot of great chances (liquidity, marketing, connections).
I didn’t mention any compensation for these summaries and simplifications; I even highlighted that it is more a semi-proposal that I’m willing to take care of (voluntary) along with MGC members, if they would be keen to.
We are having MGC elections happening at the moment. I’m one of the candidates, and one of my fundamental motivations is formulate Index Coop as a protocol that is primed to become first serious crypto investment stewardship.
If you have any other concerns or questions, I’m more than happy to discuss it!
I think your proposal and be listed as candidate for MGC is welcomed, although I am just an shrimp in vast ocean.
I think metagovernance is important excercise that Index coop should try before we will get more presence in crypto world.
Index products is good to gather investments from people with less-DeFi-enthusiatic. But less enthusiatic means they are tend to have vote apathy, like we face in election in real world, but governance token expects holders to participate by nature.
That is, index products has nature that tend to create people with voting apathy. More and more index products are getting bigger, this contradiction will be shown to many participants of DAO within products.
Yes it should be allowed holders to be apart from vote, as it is also right assigned to them, so getting people contextualized is one of key point to raise participation ratio.
Thats why I hope your actions are well accepted in community.
Good points, ser.
Spectrum of people who invest in indices usually consists of those who don’t have time (and probably proper resources) for research/analysis of particular financial instruments, but yet have sufficient fundamentals that make them keen to be exposed to them.
IC through its base- functionality acquires a lot of various assets; including those with significant governance value.
It would be a shame not to transform this “side effect” of being an investment-focused organization into a more significant aspect of the protocol’s activity that might benefit token holders & attract new investors.
Vanguard and BlackRock are the best examples of powerful investment stewardships.
But in their cases shareholders don’t decide what decisions these companies vote for.
With Index Coop we could create new paradigms of investment stewardship model (or rather metagovernance) where there aren’t any directors who have influence on the final external governance outcomes— it’s token holders who decide how the future of DeFi should be shaped like.
Sure, not everyone might be keen to use this privilege to participate in governance, hence the delegation model and MGC. But just the fact that a token holder is able to express its vision is undoubtedly revolutionary.
Afaik there isn’t yet any significant organization that focuses on solving meta-governance issues— there are some “contenders” that aim at it but we don’t have a DeFi equivalent of Vanguard or BlackRock. Yet.
That’s something to discuss, brainstorm, and formulate. I’m happy to help in that matter.