BIP11: Introduction of a penalty for failed on-chain votes

In order to combat the problem of on-chain spam with governance, I propose to add a penalty mechanism to disincentivize rouge ballots. Currently, anybody can push a vote on-chain which leads to a situation where the governance mechanisms can be hijacked by self-interested parties.

We have already seen this twice, where a certain individual has created multiple spam proposals on-chain for dBadger and Rook, forcing an on-chain vote before any discussion.
Keep in mind that failed votes cost community members money - whenever spam is introduced, it requires gas to vote it down.

The way governance is currently structured creates an attack vector. There is a clear incentive for spam ballots. An attacker (or colluding group) can simply propose as many ballots as they like, hoping that they can eventually pass an asymmetric incentive - for example - a LM financial incentive for an illiquid pool that would only benefit them. This diverts discussion from important development issues. Instead, discussion becomes centered on trying to get the spam ballot to fail.

These spam on-chain votes have made a negative impact on the image of the protocol. If a spam vote passes, it calls into question the ability of the DAO to self govern. Instead of people focusing on the innovation the protocol brings to market, they are focused on trying to decide whether the governance mechanism is capable of protecting the protocol.

Concretely: I propose to introduce a 5% penalty on staked vBNT, charged against the proposer, for all failed on-chain vote proposals. This vBNT is to be burned.

Additionally, I propose a freeze on all on-chain proposals until this matter has been decided. starting at the current block (11942146). All ballots pushed on-chain AFTER this block and BEFORE a decision on BIP 11 will be considered null and void.

I think the idea of this proposal has merits but disagree in the method of accomplishing it. I think roughly 25K vBNT is required to submit proposals and someone can easily fund a wallet with this amount so that their main account (with a higher amount of vBNT) does not get penalized for proposals that fail to pass. A better idea would be to increase the quorum% which I think right now is 20% for any BIP that aren’t whitelisting proposals (these require 40% quorum). I think a higher amount makes sense here given that we will have free voting via signaling soon according to what the team has mentioned.

As to what the quorum percentage should be:

  1. 20% is too low as we can easily achieve this quorum based on previous proposals
  2. 40% is low as well as we have had numerous proposals that have achieve this quorum percentage
  3. 55% was achieved on the API3 proposals, 52% was achieved on increasing insurance limits on eth/link pool, 64% was reached on the adhoc liquidity mining proposal, 65% was reached on the liquidity mining extension

Given the above, I think somewhere in the range of 55%-60% makes sense given previous participation for the quorum threshold.

I hear your arguments, however I am not fan of this idea. We should re-think the entire governance process, to be honest. This includes gasless voting (proposed in BIP 12) but also other measures that we could propose. For example, other projects require a forum vote (which is just an indication) with certain quorum (for example 100 votes with clear trend) before moving to formal vote (currently on-chain, hopefully snapshot soon). It is not perfect, but it is a start that could be tested and improved in the future, and would address the issue you are explaining. Announce BIPs on social media (telegram, discord, etc) so people can come, discuss and signal if that BIP should be moved to formal vote.

Also, if gasless voting is implemented, there are some other mechanisms that could improve participation that could be tried as well.