UPDATE: Please see addendum at the bottom for updates to this proposal.
- We don’t reach quorum on a majority of meta-governance votes. There appears to be voter fatigue around meta-gov related votes, which are increasing in frequency.
- By not engaging in meta-governance for most votes, we are missing an opportunity to further build trust and rapport with the protocols within DPI and build value for Index Coop.
- UDPATE: We propose to continue community MetaGov voting as is, and delegate all DPI-related meta-governance votes to a dedicated, elected committee, in case we do not reach quorum on the regular vote.
- This committee will consist of well-informed governors that cast their votes on behalf of Index Coop. This is a change from the current meta-governance process as detailed here: Meta-Governance
- Members of the committee are voted in for a 3 month period, with a backstop to recall or replace members in case needed.
While the current meta-governance process is not generating major problems, it’s not ideal either. Some issues are highlighted below:
- High manual effort - The current voting process requires a few hours of work from Greg, Cedrick and others, each time a new vote is live or a vote ends. This effort exists, whether we reach quorum or not (which we often don’t). Further, most of the effort is done by the Set team and we see a potential to hand over some tasks to the community.
- We hardly reach quorum - An analysis of the most recent meta-governance votes shows a clear picture:
Finding: Looking at the last 15 votes, we only reached quorum 4 times. That’s only 27%, meaning the Index Coop has not participated in 73% of the most recent meta-gov votes.
Often, even when IIPs and meta-gov votes are added to Snapshot at roughly the same time, the meta-gov vote has dramatically lower engagement.
Why? While we haven’t done a thorough analysis, we can make a few educated guesses.
First of all, the frequency of meta-gov votes has increased quite a bit over the last two months. We can assume that we already witness voter fatigue, as there is a declining voting participation. The voting frequency will only increase more, now that Balancer and Yearn are live and others may come online in the future.
Another reason might be the nature of these votes. Most of them are “house-keeping votes” that are not met with great interest or cause much debate. The only time we saw disagreeing votes was for “Adding renFIL to Aave” and “Add TUSD to COMP”.
Even though most of the votes are “just” housekeeping, it still takes time and brain juice to get properly informed about the Pros and Cons of each vote. Hence, we conclude that meta-governance is becoming less important (or even a burden) for most INDEX holders.
We propose to form a Meta-Governance Committee (MGC) that is given full delegation of all meta-governance votes. The MGC is inspired by the Spartan Council implemented by Synthetix. The MGC will become a subset of a larger Meta-Governance Working Group (to be proposed separately) to house all meta-gov efforts, including the MGC, the Protocol Ambassador Program, voting operations and execution (to the extent not addressed by this proposal), and further designing, expanding and experimenting with meta-governance at Index Coop.
Below is a break-down of how this committee will be structured:
- All meta-gov votes held by INDEX holders are delegated fully to this committee
- Committee members are voted in by the IC for a 3 month period
- It is the MGC’s responsibility to thoroughly review, analyze and execute votes to fulfill Index Coop’s meta-governance duty and privilege
- The committee initially will consist of 5 people
- We want to ensure we reach the right balance of agreement, security and efficiency
- This number should hold, even if more protocols are added, as the MGC will be supported by the advice of the protocol ambassadors
- The number can be adjusted later if needed
- A 3 of 5 majority is required for the MGC to vote on meta-gov proposals
- Votes will then be executed directly by the Set team or by the committee itself via multi-sig [to be discussed with the Set team]
- The committee will adhere to our meta-governance principles
- These are general guidelines for voting that will be published in a separate forum post
- The committee is supported by the protocol ambassadors
- Each ambassador is a “protocol-specialist”, ideally with some experience or social capital within the underlying protocol and who is actively keeping up with each protocol’s latest developments
- Each protocol ambassador will serve as an advisor to the MGC should there be a vote that isn’t getting clear consensus or needs to be better understood
- Each MGC member monitors all new meta-governance votes, each with a focus on a particular protocol(s):
- The MGC members collectively discuss new proposals and analyze them on their merits and against the meta-governance principles
- The MGC connects with the ambassador for that protocol to discuss the vote, if it is non-routine housekeeping or to get a sense of community sentiment
- The MGC executes the vote
- The MGC reports back to Index Coop as to how the MGC has voted, providing an explanation of the decision in case there was a notable reason to do so
- INDEX holders can call for any or all MGC members to be replaced at any time via IIP and Snapshot vote as a backstop in the unlikely case of major MGC / Index Coop disagreement
- The MGC will report all decisions/votes back to Index Coop in a transparent way (e.g., at minimum, announcing each vote to Index Coop and, for any votes which are more controversial or disagree with the majority, providing an explanation for why MGC voted in the way it did.
Motivation - Why a Meta-Gov Committee
- With all meta-gov votes delegated to the MGC, INDEX holders are relieved from having to participate in the growing number of meta-gov votes, freeing time and energy for other tasks, including voting on IIPs
- We believe that this will ensure informed decision-making (which is not solved with lowering quorum or rewarding votes as described above). There are generally no discussion on Discord or the forum regarding live meta-governance votes, so it appears most votes are either (i) cast without much research about the topic, (ii) are obvious, such as with simple housekeeping proposals, or (iii) are not cast, and we don’t reach quorum.
- Technical implementation is very simple and fast, as it only requires turning off Snapshot support for meta-governance and delegating the votes to 5 addresses (one multisig, and 2 EOAs)
- This solution is a first initiative to solve the current problems, and does not exclude any other ideas from being explored or implemented (e.g. governance mining or staked meta-gov Index)
- Consistent, thoughtful and well-informed meta-governance participation is key to building trust with each of the protocols underlying DPI.
- When it becomes clear that Index Coop is going to show up to each meta-gov vote with the millions of dollars of votes of each protocol held by DPI, and there being a specific group in charge of executing those votes, each protocol will be encouraged to reach out and work with us, especially as DPI grows.
- When there are proposals at underlying protocols which bring direct value to Index Coop (e.g., listing of DPI as collateral, etc.), we know that we will be able to adeptly vote DPI’s tokens in support.
- This fits within our greater meta-governance framework and is key to building an unforkable moat around our products and DAO.
Who is the MGC?
We believe that the MGC should consist of dedicated Index Coop community contributors (silver and gold owls, or people from Set and DFP).
First of all, we want to ensure that votes are cast with the best intent for the IC and the DeFi ecosystem in general. And secondly, while we still rely on specialist knowledge, we want to keep a certain neutrality and prevent too much bias towards one single protocol. This is very important as we do have competing protocols among the underlyings.
Below sets forth our proposed initial make up of the MGC:
|IC MGC Member||Background|
|Cedrick||Core contributor to Index Coop meta-governance efforts|
|Lavi||Core contributor to Index Coop meta-governance efforts|
|Greg||Core contributor to Index Coop meta-governance efforts, member of the Set team|
|Kiba||Long-standing Index Coop contributor with strong ties to many protocols underlying DPI|
|Noah (Ncitron)||Long-standing Index Coop contributor who has built and been deeply involved with IC’s technical meta-governance execution|
We believe that MGC members should be compensated for their involvement, and will detail rewards if/when this proposal converts to an IIP based on community feedback.
The MGC is our solution for meta-governance as both Index Coop and meta-governance scale. By having the MGC, Index Coop will be able to participate in every meta-governance vote. As a consistent, thoughtful participant in meta-governance with tens of millions of dollars worth of votes per protocol, we will be able to strengthen our ties with each protocol, expand our influence in the DeFi ecosystem, and support those proposals which are most important to Index Coop.
The delegated meta-governance voting committee proposed here is obviously a departure from how Index Coop currently conducts meta-governance, so please provide any feedback or concerns (and apologies for the long post).
- Yes let’s proceed with this proposal
- No, we want to keep our voting power
UPDATE June 7th 2021
After a great discussion in the weekly planning call on Monday and taking into consideration the forum discussion, we recognize that part of the community is not fully comfortable with the approach we proposed in this post. Main concerns are:
- Meta Governance is part of the value proposition of the $INDEX token
- Some people like to vote and want to participate
- There should be a way to opt-in / -out of delegation to the MGC
While we recognize these valid concerns around HOW we solve this, it seems that everybody is aligned with the goal about WHAT we want to achieve: That is, to vote on every meta-governance vote and doing so in an informed way.
Taking into account the inputs from the community, we would like to iterate on the above approach by proposing a new solution, where delegation of voting power only occurs, if quorum is not reached via the regular community vote. In summary:
If we reach quorum on a MetaGovernance vote, the vote is executed accordingly (as done today)
If quorum is not reached, however, we propose that the MGC has full discretion to decide on the vote, as described above
This iteration will ensure that the community keeps its full voting power. And at the same time, this also ensures that the MGC is able to step in on the votes that the community does not care enough to participate. We think that this should strike the right balance between community voting power and IC participation in meta governance.