Meta-Governance Vision and Goals

Title: Meta-Governance Vision and Goals
Contributors: @cedrick @Lavi (thanks to @Matthew_Graham for reviewing and providing suggestions)
Date: April 24, 2021

Vision Statement

We, as Index Coop, want to be a trusted and reliable partner to those protocols underlying our current and future indices, taking our unique responsibility within the DeFi and crypto ecosystem seriously. We do this by establishing a strong meta-governance framework, by providing a great experience for voters, and by being an informed and well-connected entity.

This post sets forth the meta-governance efforts beginning today and our goals for the next quarter and beyond.

Day 1 Meta-Governance Efforts
Things being done today

1. Operations

Set Protocol currently manages all meta-governance operations at Index Coop. We have begun moving forward in bringing certain meta-governance operations in-house from Set, starting by downloading some of @gregdocter’s knowledge and starting to take responsibility for certain community-side meta-governance functions with upcoming meta-governance votes. Over time, we plan to continue to bring such functions in-house.

2. Governance Principles

We need a structured framework for analyzing meta-governance proposals. After a number of Compound votes, we’ve just had our first few Aave meta-governance votes, and more meta-governance votes will come online soon. What this means is that we need to (i) build out our meta-governance structure as the quantity of votes increases and (ii) analyze meta-governance proposals in a structured way.

We believe the Index Coop community should adopt a detailed set of governance principles through which future meta-governance votes should be analyzed. We will propose a draft of such governance principles in a separate forum post for discussion and refinement by the community. Obviously, all $INDEX holders will remain to be able to vote in any way they see fit. But we think this is a productive way to guide voters and build trust, and would serve as a symbolic move to guide future action, similar to the overarching principles that guide Index Coop.

3. Protocol Ambassador Program

As Index Coop continues to immerse itself financially within the DeFi ecosystem, we need to also further immerse ourselves socially. Having strong relationships with each of the protocols underlying $DPI and any future indices creates an unforkable moat and provides us with an advantage in terms of supporting $DPI.

As a key example, efforts are underway to get $DPI listed on Aave as collateral (led by @LemonadeAlpha and @Matthew_Graham). This is valuable because it makes holding $DPI more productive for users. To get $DPI listed, we need 80,000 Aave votes in support of this proposal. $DPI holds ~65,000 Aave, so we’re ~15,000 votes short. In order to bridge this gap, @Matthew_Graham – who has a strong pre-existing relationship with the Aave community – is proposing to create a multi-sig to which $DPI holders can delegate their votes to in support of this proposal.

We have many big-picture, long term goals of this ambassador program outlined in the Q2 Goals section below, but we think this serves as a great first, experimental step in building out an (informal, for now) ambassador program for Index Coop. This will serve as a useful learning opportunity for discovering the kinds of benefits possible by having a strong understanding of the protocols underlying our indices, and can be used as a roadmap for getting $DPI listed elsewhere, developing a formal ambassador program and building a proxy system to delegate votes.

Q2 Meta-Governance Goals
Things we hope to build out over the course of the next quarter (and beyond)

1. Enable Snapshot meta-governance on remaining protocols within DPI

  • We currently support meta-governance proposals on Compound, Aave and Uniswap (but largely have only seen Compound votes)
  • Current proposal to allow Snapshot meta-governance on YFI and Balancer
  • We should allow Snapshot meta-governance on remaining tokens within DPI as soon as practicable

2. Build out ambassador program:

  • Expand Index Coop’s insight into protocol sentiment, upcoming proposals, other news - in other words, serving as a “reporter” for all relevant things happening that might prove valuable for us (i.e., each ambassador would be expected to keep current with their protocol’s Discord / forum)
  • Allows us to build future partnerships as an entryway point for other BD efforts
  • Entryway point to assist in listing DPI as collateral on other protocols
  • Potentially serve as delegates to (i) pool support for initiatives at the underlying protocol that bring value to DPI / Index Coop (e.g., @Matthew_Graham’s work with Aave) and/or (ii) a future proxy system

3. More experiments to improve meta-governance

  • Improve system for announcing new votes (e.g., EPNS)
  • Delegating votes / proxy system
  • Governance mining (see @DarkForestCapital’s original post and the latest thoughts on the topic from the Treasury WG)
  • We are calling these “experiments” because we will need to test what is effective and balance that against second order consequences

4. Build out organizational structure for meta-governance within Index Coop

  • Ultimately, this may be proposed as a new working group within Index Coop, but to begin, we think it’s important to start organizing and experimenting more informally - certain meta-governance related ideas have been proposed by various individuals and working groups over the past few months, and we will need to organize and coordinate these efforts
  • A “hub” to contain all current meta-governance projects, upcoming plans, and oversee Coop-wide meta-governance strategy

Why Does This Matter?

This initial meta-governance strategy is designed to:

  • grow Index Coop’s engagement in meta-governance proposals
  • improve our analysis of proposals
  • build continued trust with protocols underlying our indices
  • import operations in house

Conclusion

The number of governance and meta-governance votes currently live on Snapshot (and the low engagement certain votes receive) proves that we need to think intentionally about our efforts in driving engagement. By leveraging the full value of our meta-governance capabilities, we will be able to better support Index Coop initiatives and build trust and credibility within the DeFi community.

See also

9 Likes

I see this as central to our competitive moat. The more deeply we can integrate with other protocols the better. While aspects of this function can be siloed within working groups - every community member should also strive to learn about and participate in other DeFi communities. I encourage all community members who are curious about other communities to go and interact with those communities - decentralized diplomacy allows us to grow and attract more community members from across DeFi.

The immense voting power controlled by Index Coop means that we have a profound responsibility to engage and understand other communities. Some of this is partnerships and ambassador programs. And some of this is individual community members
developing a deep understand and deep relationships with other communities.

My question for the community is this - What does winning look like?

We understand that meta-governance is important and a huge competitive driver for us - what do we want Metagovernance to look like in 6-months, 1-year, 5-years?

4 Likes

I completely agree. I really like the term “decentralized diplomacy”.

I’d love to here what others think, but here’s my vision of a winning meta-gov strategy (some of these may also apply to general Index Coop governance):

  • we have unlocked meta-governance capabilities on all protocols underlying all indices.
  • we have a formal ambassador program for each underlying protocol, where one or more Index Coop members keeps abreast of all protocol news, events, sentiment and future plans and updates Index Coop accordingly so that Index Coop can move quickly to (1) support existing products, (2) support the protocol, which is key to our indices’ success, or (3) create new products, as applicable.
  • our voting power and relationship with each underlying protocol is so strong that when protocols are considering new proposals, they come to us to get our perspective and support.
  • we implement a combination of governance mining and a delegate/proxy system that meaningfully drives voter engagement. This system needs to account for votes where voters may prefer to vote “no” but are abstaining for social reasons, so that we are no longer struggling to hit quorum on votes.
  • we publish quick, informative, objective reports on new proposals to keep our voters and the community informed. Other sources address current governance proposals well (e.g., withTally, etc.), but doing this in-house allows us to get this directly to the Index Coop community and furthers establishes us as a source of trust and information in the community.
  • our voting power, relationships with top DeFi protocols, engagement, innovation, research and brand help craft our moat so that other crypto indices cannot compete with us.

We don’t yet have solutions to put all of these goals in practice (e.g., designing a governance mining program that doesn’t have negative second order consequences is challenging), but I think some dedicated thinking and experimenting in this space will be fruitful and I’m confident we can achieve everything I listed above.

2 Likes

Love the way that you are thinking. Spend some time thinking about how the Analytics team can support y’all and hmu if anything sparks. We are currently working on analyzing our DG2 votes (I know that is strictly Index governance), and would be happy to branch out to analytics projects to support the development and decision making around meta-governance!

1 Like

Thanks, @jdcook! Appreciate that. I think there is likely a great opportunity to show off our impact in the meta-gov space to the protocols underlying DPI, especially as we continue to grow. Let me think more concretely as to how we might best utilize our data for this (or otherwise) and I’ll reach out.

1 Like

Super exciting work @Cedrick & @Lavi :fire:

Adding notes that popped into mind as I read through it:

  • “We, as Index Coop, want to be a trusted and reliable partner to those protocols underlying our current and future indices” I believe trust is one of the most valuable resources in the Coop, no matter who or what it is between. Focusing meta-gov on being a trusted governance participant makes total sense.
  • Governance principles – I’d personally love principles to guide my thinking before I vote. Can’t wait to see the first iteration of these.
  • Protocol Ambassador program – When i read “ambassador” my brain went to, “Index Coop community member who understand what it takes to run a proposal through a different community, and has sufficient social capital within a given community to get plausible proposals executed.”
  • +1 for the experimental mentality
  • “decentralized diplomacy” has a great ring to it

Questions – do not need answering now, just sharing as they popped into my brain

  • “We should allow Snapshot meta-governance on remaining tokens within DPI as soon as practicable” – In this world, $INDEX holders may have 4+ meta gov votes a week & multiple IIP votes. In terms of voting intelligently (being trustworthy partner), executing votes, and avoiding voter apathy, how do we make this work? You
  • Ambassador program: Which piece of this provides the highest leverage to the Index Coop today? What “reporting”, if any, would be valuable to INDEX holders right this moment?
2 Likes

Super cool! Want to add that as protocols approach us as methodologists, using insights ambassadors have may help us create really powerful, targeted products.

3 Likes

Hey Cedrick, @verto0912 and I would love to work with you on an MVI related goal here too.

We are currently working with projects within MVI that use snapshot to get delegated voting turned on, allowing us to vote with MVI. At that point we could implement the same snapshot meta-governance implementation that was built for DPI. Currently the status is:

  • DG has delegated voting switched on
  • We are working with NFTX and RARI to have them implement it
  • There are a number of other projects planning to move to snapshot in future, we will follow the same process as these move forward

We would also expect to act as the ambassadors for these projects as we naturally form links to each community as part of the methodologist role.

3 Likes

Thanks @gregdocter, these are great questions. The first question is particular is going to be challenging to address properly. I think the number 1 thing that will be useful in avoiding voter fatigue (while keeping participation high) will be the ability to delegate votes. I think it’s worth seeking to overcome this fatigue issue to make sure that we are engaging with meta-gov as much as we can.

With respect to your second question, at this moment in time, the highest leverage function of an ambassador may be assisting in identifying how we best bring value to our products, like getting DPI listed as collateral on Aave or INDEX on CREAM. I would expect that the actual use case will change over time depending on the needs of Index Coop, but it will always be useful to have at least one of our community members on the “inside”.

This is a great insight, @puniaviision - I think this is a really proactive potential use case for this program.

This is great, thanks @DarkForestCapital. Please let me know if I can help in any way. It would be exciting to see meta-gov votes for DG as a starting point, and hopefully we will have sorted out a delegate system / gov mining system that can counteract the high number of meta-gov votes that we’ll have by the time the others come online. I think you and @verto0912 would make for natural ambassadors given how close you are keeping with these projects.

4 Likes

UMA has kpi-options that could be used as a reward mechanism. What’s really cool about the kpi-options is that the reward(s) are distributed as specific metrics are met. It incentivizes recipients to directly contribute to the protocol’s goals as they would increase their reward with the success of the protocol. If metrics aren’t met, no reward is realized. It’s like a no-loss solution to reward the community.

1 Like

This is very well laid out, @cedrick. If we’re really going to be “Decentralized Blackrock” (i.e., not just a large asset manager but also an influential voting bloc in the ecosystem), it will be driven in large part by executing against a strong meta-governance framework.

I am really supportive of the protocol ambassador program. It is a smart way to scale your framework by harnessing the growing Coop contributor community. Between MVI and DPI, that’s already 29 separate protocols to keep tabs on. These needs will only grow as the Index Coop product suite evolves. Looking forward to seeing what you learn from these experiments and how meta-governance evolves/strengthens over time.

1 Like

Thanks @Ap0ll0517. Seems like UMA’s KPI-options have some interesting potential applications and I know others are discussing them at Index Coop. I don’t think they completely solve the problem here (the problem being that it is hard to encourage more participation while keeping quality of engagement high), but such reward mechanisms are definitely things being kept in mind as we continue to think about this and experiment.