@mbr I have updated the proposal with your suggestions. I completely agree with them, and since others have expressed the same, it’s reasonable to do so. Thank you for the thorough proposal discussion points, they have also been added to the post as they offer crucial background on the thought-process behind each suggestion.
More transparency
With this proposal, we’re inevitably aiming to increase the complexity of the quorum and supermajority rules. Hence, I want to suggest a change to increase transparency that is in my opinion, essential to avoid voter confusion:
When put up for voting, a proposal shall include the quorum and supermajority requirements for it to pass.
The whitelisting, LM rewards activation/extension and co-investment proposal templates shall include a paragraph with the quorum and supermajority requirements for all types of proposal to streamline the proposal drafting process.
What about LM rewards?
I would like to express my support for @glenn’s idea as well.
Although I believe whitelisting and co-investment increases pose a higher immediate security liability to the protocol, LM rewards - even if given over time - very quickly drive liquidity to a pool, hence quickly putting a high amount of BNT at risk. An example of this is the UNIBNT pool, with rewards activated on the 1st of March, below. Notice the immediate jump in liquidity.
Could someone else provide their opinion? I’m in favour of including it in the proposal.
Addressing inactive voters
As far as removing inactive voters, I believe I may have been lax in the terms used. I am mostly in favour of a dynamic quorum system that does not require contract update. All the information is already present on-chain.
Nevertheless, a solution using a voter decay tactic as debated in the last community call (24th of May) tackles exactly the kind of issues that I’m trying to expose:
Wallets can become inaccessible by the holders, be it from losing their keys, passing away without leaving such an information, etc.
I don’t agree that a decision to reduce inactive voters’ voting power will raise eyebrows - ultimately the crypto space is in exponential growth and any decision that the DAO makes has an impact on the long term success of Bancor. Therefore, such decisions should be taken by members which are more engaged and thus more likely to be informed about the current state of Bancor. To summarise, inactive members pose a weight on the quorum, are more likely less informed and as mentioned before, might also be eternally inactive. For these reasons, I believe that a well managed DAO should address the issue of inactive voters.
Lastly and perhaps most importantly - not removing or changing the voting power of inactive voters opens up a soft attack vector on the DAO governance. If a large enough vBNT wallet stakes in governance with the goal to never vote, it might be able to lower quorums such that no proposal is passed. I’ll give an example. There are currently 13,324,751 vBNT staked in governance. If the wallet with the most vBNT right now (6,156,412.16 vBNT) were to stake and purposely NOT vote, quorum would be reduced by 31.6%. Average total vote participation would be reduced to 13% instead of the current 19%. Finally, to permanently reduce the maximum quorum to 30%, one would have to stake 44,415,836 vBNT and not vote. At $1.56, that’s $69,288,704 if you could directly purchase all the vBNT. 2,346,645 vBNT is currently in the vortex, and as the pool gets bigger and more vBNT is in circulation, the potential for a whale to buy enough vBNT to render governance useless poses a mild but unnecessary risk. How long would it even take for us realise it and adjust governance rules accordingly?
I can always submit this as a separate proposal as well if we want to move forward with the current rules as they are. My thought process for having a higher quorum and super majority for LM proposals is that they are no different than what we are considering for co-investments at the lower level (in fact, the amount that we emit is higher):
The LM rewards for mid cap pools (UNI,GRT,AAVE,SNX, etc…) mint 120K-240K over the course of 12 weeks which is real inflationary pressure on BNT and should therefore have higher requirements.
This proposal aims to lower quorum for whitelisting proposals - due to sometimes lack of interest from voters - and to increase Coinvestment quorum, as well as supermajority rules for both. BIPs are unnafected.
The proposal changes all the quorum and super majorities - may as well include a full plan of what we think is best - potentially increasing normal BIPs quorum too.
To be honest, I’m really not sure. I’m also not sure I’m anti increasing the vortex burn - tho the way it was posted is a bit…well…un conventional?
How do we feel about this proposal in light of recent events?
I’ve updated the proposal to add a paragraph about updating the templates for whitelisting, co-investment increases and LM rewards activation/extension.
I still think this proposal should be passed but adjusting the supermajority to 70%, could be better. theres a lot of vBNT being staked this week so we should see more diversity of thought.
I remain in support of this proposal, and will vote FOR if it appears on Snapshot next week.
@tenzent are you referring to 70% supermajorities for “increases up to an including 100k BNT,” “increases over 100k BNT,” or both? I still like the idea to have a high hurdle for the first co-investment increase.
Thinking about it again now, 80% should be fine. proposal is good as is. In the future I would like us to add clauses to reduce the supermajority as quorum climbs.
For example
30% Quorum, 80% Super-Majority
40% Quorum, 70% Super-Majority
50% Quorum, 60% Super-Majority
60% Quorum, 50% Super-Majority
Isn’t it wise, in light of recent events, to postpone this proposal by at least a week? Can debate more after the next round of votes.
Main reasons being:
The community is focused on the LM rewards extension and we probably shouldn’t divert attention to this proposal for now.
The voter demographics have changed significantly which means that the analysis made is not up to date.
Nevertheless, the rules only affect WL and coinvestments, and should be robust enough that they would stand their ground after analysing the next round of votes. All the more reason to wait.
Too many changes happening at the same time might drive LPs/voters/users to interpret them as signs of instability, which is not the case.
Had a thought. Using a % is going to lead to us always having to lower and heighten quorum as voters become in-active or the amount of vBNT staked in gov contract changes. so why don’t we simply use a flat amount for whitelistings.
For example Proposals Quorum is instead met when a minimum of 7.5M BNT Vote. Either way we should try to get this or a % adjustment through for the next vote.
At 7.5M There are no wallets capable from unilaterally reaching quorum (Not even close)
Given that the last round of votes saw a large amount of vBNT staked in governance, I’ve made the same analysis than the one in this post for the 3 last rounds.
Figure 1 compares the voting demographics before the 23rd of May and for the last 3 rounds of voting.
Figure 2 - Average voting % after first participation per wallet staked in governance.
Some comments:
The sample of voters from the 23rd of May is significantly larger than before that date. Most wallets had staked recently and were most likely to vote.
vBNT that has never voted on snapshot didn’t change too much, but its share of the quorum dropped to less than half of before.
Some inactive whales voted on the last rounds. I believe this indicates that expanding the reach of the BancorDAO on different social media is definitely important to increase the voter participation.
The average active vote participation increased by 73%, due to the vBNT that was recently staked, from 30% to 52%.
The total vote participation (counting inactive wallets) increased by 89%, to 36%.
Wallets’ vBNT that voted more than 60% and 70% has increased by more than 6x.
The list of addresses with vBNT staked in governance was taken from Dune Analytics on the 6th of June 2021. Some addresses might have staked before the last round of proposals started and were therefore considered inactive incorrectly.
It’s definitely refreshing to see such an increase in voter participation. However, one should remain cautious and understand that it most likely will stabilise at lower values. Therefore, I believe that the average total participation of 36% still justifies a 30% quorum for whitelisting, coinvestment increases proposals as well as BIPs. A compromise to change it to 35% can be considered however.
Finally, increasing the supermajority requirements for those proposals should be debated. Do consider that most of the non-controversial proposals pass with a resounding FOR ratio.
Good question. I believe we can put them up anyways:
With more proposals to vote on, we can paint a better picture of the voter demographics on the next round of voting starting Monday.
Don’t think there’s any need to stop other proposals from being put up for vote just because of this one. Even if they fail, we can put them up again if need be, and test how this proposal affects the voting.
@mbr@ccc@tfns@glenn - Given the last two weeks, I must admit, I have basically done a 180 here on my thoughts. I wanted white listing to be difficult, but I’m starting to re-think now that we have so many white listed pools (risk diversification).
While I was pro the LM for the big pools, it does seem reasonable that we tone it down a bit.
What if we said:
White listing proposals 30% quorum and 80% super majority
Any proposal that suggests a co-investment of over 1,000,000 BNT, 40% Quorum and 66.67% super majority
LM 40% Quorum and 66.67 super majority.
Seems like LM at 20%, white it once made tons of sense, might no longer be appropriate given the growth we already experienced from this.
Please let me know if you guys agree that we need to make LM harder and WL easier.
Pool fees: No quorum requirements, simple majority.
Governance and protocol changes: 35% quorum, 66.7% supermajority.
I am convinced we should probably make the pool fee governance as easy as possible. All evidence to date suggests we can be pretty liberal in trying out whatever we want, and the impact to the health of the protocol overall is pretty minor. I have started the bidding super low - happy to see what others think about it.
