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 metagovernance 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.
What is a Meta-Governance Proposal (MGP)
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.
Proposal Creation Process
- 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 1% of the circulating supply indicate support of the MGP via publicly verified messages, the MGP will receive a number [MGP-0] and proceed. 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 1% is reached, similar to our product assessment, a group of core IC contributors will assess the proposal and provide their feedback in the forum. We propose that the Meta Governance Committee, the Business Development Working Group, and the relevant protocol ambassador all participate in the assessment and individually add their comments.
- The forum post needs to be up for at least 7 days, and the assessment shall be done within the first 4 days. Engagement from the proposing party is highly encouraged.
- After the 7-day period, the proposer can call for a Snapshot vote, which goes live for 72 hours.
For an MGP to pass, it needs to fulfill the following quorum requirements:
- 7.5% of all $INDEX in circulating supply must have participated in the vote
- 60% of the participating votes must be FOR the MGP
Execution of the Vote
If the MGP passes, delegation occurs either to an Index controlled EOA for direct proposing (dev team does verification of payload and necessary execution) or if the intended act is delegation to an autonomous proposal, delegation to the correct address will be completed by dev team. The resulting metagovernance vote FOR will be issued if applicable, since it is implied by the MGP and since standard quorum-requirements have been reached.
This forum post is intended to spark the discussion on creating a dedicated MGP process. We highly appreciate any feedback and hope to find consensus in order for us to move to an IIP state.
If the community agrees with this approach, we’d like to create an IIP and bring this to a Snapshot vote, voluntarily applying the higher quorum of 7.5%, to ensure that we have support for implementing this.