- Our intention with this post is to illuminate the current technical considerations that govern methodologist permissioning over underlying smart contracts.
- Our goal is to open up the discussion with the broader community and move away from closed-door discussions.
- Our goal is to find a path forward with Index Coop and Methodologists that ensures a sustainable future for everybody.
- Our intention is to have all stakeholders heard and aligned so that we can work together.
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.
The diagram above describes the new technical architecture going forward for IC products built on top of Set Protocol.
As you can see the BaseManager contract lives on top of the SetToken and controls the different interactions the SetToken has with Modules. We can provide permissioning at each level of this stack.
We can very easily implement multi-sig permissioning on the StreamingFeeExtension for methodologists, but doing so may not be accepted as the Base Manager can remove and add extensions at will. Providing permissioning at the BaseManager level means that the Methodologist needs to approve any extension being added, which may impair our ability to move quickly and significantly hamper IC’s autonomy over its own products.
It is worth noting that we can provide specific exceptions to the general rule described above. For example, we can provide an exception on BaseManager’s ability to add or remove extensions that prevent it from being able to do so with the StreamingFeeExtension specifically.
Whatever boundaries are drawn here likely impact the future relationships between Index Coop and external methodologists.
What type of Smart Contract level permissioning is the Index Coop willing to offer to external methodologists?
- We will use this forum post to source questions, answers, and general thoughts from the community.
- We will hold a community call with key FT people and WG leads [transparently formed with the DAO] to align on an answer.
- We will hold a community + DFP call to finalize the arrangement and answer any outstanding questions.