eIP 38 Delegate Optimisations in Governance: 2 - Recognised Delegates

Author(s): @SuperPat

Related Discussions: eIP 32: Delegate Optimisations in Governance

RFC discussion: RFC: Delegate Optimisations in Governance: 2 - Recognised Delegates

Submission Date: 22 December, 2022

  1. Simple Summary:

The proposal aims at gaining community support for launching the Recognised Delegates Programme as an addition to the existing DAO delegates structure. The Recognised Delegates Programme will introduce a reputation system to the delegates system, giving outstanding DAO participants recognition thus motivating them and other community members to promptly participate in the governance of the protocol.

  1. Abstract:

Disclosure: I am the Ecosystem & Community Lead at Euler Labs. However, the following comments and views are my own and do not represent the positions of any affiliated organisations.

DAOs as a new form of social organisation are heavily reliant on reputation, Recognised Delegates Programme represents recognition to those who added the most value to the DAO with elevated status/title, special discord roles, and front-end changes prioritising recognised delegates.

  1. Motivation:

Euler governance has seen continuous growing participation among community members, though we have to recognise that the delegate system hasn’t fully released its potential. The delegation system has walked towards a better structure with the recently passed Active Delegates Programme which gives active DAO participants more exposure and recognition, this proposal would like to further improve the system by giving more acknowledgement based on value-added.

  1. Specification/Body Text:

The Status Quo – Attempts to Establish Structure in the DAO

Currently, there are only two tiers of delegates: Public Delegates and Active Delegates. Anyone who submits the application can have a public profile on the delegates page to decentralise the process. Any public delegate that has passed a minimum level of voting participation automatically becomes an Active Delegate (see: eIP 32: Delegate Optimisations in Governance ). There are no assessments or rewards for the active community members that have made extra contributions to the DAO, it is difficult for community members looking to delegate their votes to have an insight into the members that added the most value to the community and delegate their voting power accordingly.

What is a Recognised Delegate

A recognised delegate is an elected, paid post of reputable, diligent and qualified Euler DAO members who will work closely with the team and contribute to the protocol. They are respected members of the DAO and recommended public delegates.

Criteria of a Recognised Delegate

Reputable

  • You have a good reputation in the space & good relationship with the community

Active

  • You have to maintain >80% of overall voting participation in the 3-month period prior to Recognised Delegates Application
  • You attach short explanations to all of your votes in Snapshot
  • You actively contribute to the DAO and participate in community discussions

Qualified

  • You are qualified in your preferred area of contribution, for example, if it involves technical know-how and risk management

How to Become a Recognised Delegate

A quarterly community vote will be conducted to decide the remaining/leaving/election of Recognised Delegates

Process:

  1. Community members & existing Recognised Delegates submit applications
  • Only applicants with >80% overall voting participation rates in the prior 3-month period will be qualified
  • Only applicants with >600 EUL token delegated will be qualified
  1. Existing Recognised Delegates** review the application to gatekeep & filter the low-quality applications, all applications & decisions will be made public for maximum transparency
  2. Existing Delegate prepares for the quarterly community vote with:
  • Activity statistics for the existing Recognised Delegates in the past 3 months
  • Applications of the Recognised Delegates Programme
  1. Quarterly community Snapshot vote for the top 10 members to be the Recognised Delegates of the next quarter:
  • For an existing Recognised Delegate to remain in the post (by voting for them)
  • For an existing Recognised Delegate to leave the post (by NOT voting for them)
  • For a delegate to become a Recognised Delegate (by voting for them)

Implementation Set up:

  1. ** Recommend setting up a recognised delegates committee consisting of @SuperPat, @Matija, @river0x, @Raslambek, @knightsemplar to conduct filtering of the first batch of incoming applications and post the first quarterly community proposal
  2. Changes on the front-end
  • Pin the Recognised Delegates application at the top of the Delegates page, before Active Delegates
  • Grant check-marks next to their delegate profile name
  1. Coordinape set-up without a budget to assess the contribution of each recognised delegate on a monthly basis, published and made visible to community members
  2. Recommend a distribution of governance tokens of 200 EUL per recognised delegates per month. Recognised Delegates whose voting participation rate fell below 80%/fail to attach explanations to their votes in any of the months during term period will be disqualified from receiving governance token of that month.

Pros:

  1. It recognises and rewards community members who add a lot of value to the DAO.
  2. It establishes examples for other community members and motivates them to actively participate and contribute
  3. It gives the community visibility of top contributors’ contributions and allocates their votes accordingly.

Cons:

  1. It could entrench and centralise governance around existing participants.
  2. The criteria for being a recognised delegate may be too harsh which can effectively decrease their motivation

5. Next steps

  1. The community should discuss the idea of the Recognised Delegates Programme and assess its value to the DAO
  2. The community should discuss the proposed criteria and other implementation details to see if they are effective to achieve the goals

Relevant Links:

Snapshot

https://snapshot.org/#/eulerdao.eth/proposal/0xb4b98f7966ae35fe9bb1df6a8e277b0eb1cc0ede0b09fd9c57d7309a5f63f23d

4 Likes

Areas of change from RFC proposal:

  1. Increasing applicants’ & Recognised Delegates’ voting participation threshold to 80%
  2. Add >600 EUL delegated to Recognised Delegates’ application requirements
  3. Add attaching short explanations to each vote as a requirement during Recognised Delegates’ term time
  4. Add clarifications that all initial filtering processes will be made transparent to the community
  5. Add >80% voting participation rate in any of the months during the term & attaching explanations to votes as a requirement for Recognised Delegates to receive compensation
5 Likes

re: 2

can i delegate to myself?

@uhhhh Yes you will be able to!

1 Like

Proposal looks good and I like that the plan is to use coordinape to track activity of each recognized delegate. Who will be managing the coordinape circle and giving out points (or gives) ?

I think 200 EUL /month might make sense to start with, but during months with a high frequency of proposals and a lot of governance activity, the compensation may be on the lower end. Just something to consider for the future.

Over all I think the eIP is very well thought out and detailed. Thanks @SuperPat !

2 Likes

Great proposal @SuperPat. We’ll apply to become a recognized delegate as we want to continue to actively contribute to the DAO on risk related issues.

We’ll vote in favour of this proposal.

1 Like

Im glad to see that u have included almost all the feedback from the community.Thanks @SuperPat ! I will vote in favour of this proposal.

2 Likes

Thanks @Millie for your feedback! We do intend to incorporate Coordinape in the next iteration of the programme and the details are yet to be fleshed out, definitely something to start thinking about as a community! The salary will also be a starting point subject to future iterations.

1 Like

I think it’s good to see Euler experiment with incentivization of quality governance activity. A potential con that didn’t make the list is the possibility of extractive governance mining, i.e. new delegates engineering governance activity to meet the minimum requirements without meaningfully contributing to DAO decision-making or processes.

The 600 EUL minimum and 3-month qualification period should both help dampen such activity and are sufficient protective measures, in my view, for this eIP. That said, if this proposal moves forward, it’s possible that we see a few dozen / few hundred new delegates spin up to meet the criteria, and it may not be so simple to differentiate honest new delegates from governance mining activity. For future quarters, it might make sense to consider a cap on the total quarterly EUL emissions dedicated to this initiative, such that if we have more qualifying delegates than some limit, recognised delegates’ distributions are reduced proportionally to satisfy the cap.

let vote, lets vote on this

That’s actually a good point, one way to go about preventing that sort of thing is to distribute EUL based on how much delegated weight a particular delegate has. HOP governance is experimenting with this approach atm RFC - Hop Delegate Incentivization Trial - 🗳Meta-Governance - Hop

Thank you for the suggestion.

Including coordinape in the mix is a good idea, maybe the budget can have a fixed EUL amount with a multiplier for the number of proposals that month?

Eg: ‘y’ EUL x ‘n’ snapshot proposals + ‘z’ EUL x ‘m’ forum RFCs

Tbh, I’m not sure about connecting weight of a delegate with his/her compensation that was described in the @Millie comment. Opting for this approach the DAO will compensate holders rather than truly active delegates. Moreover, I see a risk of RD borrowing EUL before the vote to increase their weight and selling immediately after voting thus potentially opening a door for the gamification of the system.
As for the idea on increasing the number of RD while introducing a certain cap for the activity, Im slightly concerned with more people coming the compensation amount for a particular delegate could get so low, that it won’t be an incentive for really qualified delegates. It is not going to happen during the 1-2 waves of the RD programmes (since there is a 3 month prior period), but in the future it could be a risk for the DAO. So, I would prefer to have a fixed number of RD.
Imho, the 600 EUL (probably could be modified with the DAO getting more mature) entrance rate and is a good way that provides a certain level of the “skin in the game” while putting involvement over total amount held.

It is the interesting experiment, which absolute will bring Euler DAO further insights into how to evolve.
Although I don’t support all the details, I see more pros than cons.
I will vote for (because there’s no abstain :D)

1 Like

I think a fantastic proposal and a great idea. I’m just not keen on the minimum number of EUL. I would like to know the workings behind getting number of 600 EUL, is it based on fraction of token supply, is it based on current distribution numbers etc.? I feel that we want to invite as much meaningful participation as possible and the other criteria are great filters for that. :slight_smile:

Hi @JohnWinstonL thanks for your comment! The 600 EUL minimum delegation criteria for a Recognised Delegate applicant follows that of Active Delegates to ensure all applicants have skin in the game (in case of self-delegation) or have received a decent amount of community backing (in case of delegation).

1 Like

Due to the conflict of interest (I’ve been suggested as a recognised delegate), I shall not vote on this eIP.

Furthermore, I have created a new RFC along with @Raslambek to push for an “abstain” option in future votes.

1 Like

@lemniscap Hello guys! I just saw u voting against the eIP 38.


Due to the Snapshot limits there are just 2 reasons visible. However it seems that there is at least a third one (maybe even more), could u please share them here?

I see :slight_smile: . Yes, I understand the intent, especially of having skin in the game - this cannot be understated. My only query is that, skin in the game is a relative to each individual. 600 EUL at approximately ~$4/token → $2,400 USD is not a small barrier to entry alongside the time commitment and approval required. Just briefly looking at the public delegates page https://app.euler.finance/delegates there are 16/86, i.e. less than ~20% of public delegates meet the 600 EUL delegated criteria at the current time, let alone the the 80% vote rate w/ comment and getting past the gate keepers. I fear that this proportionality already creates a “cartel” to paraphrase another DAO member without a monthly stipend being issued.

Once again, this is just a concern I am raising regarding the criteria. Please do understand though, I very much support this proposal and I think it is a great idea. Voter apathy is a plague that infects defi to its core, hopefully through discussions we can work out the best framework to recognise active participants and therefore encourage others to take part in the governance of one of the best non-custodial lending protocols around since christendom. :smile:

1 Like

i oppose the proposal.

It is overly complicating governance process and discourage any new governance participant.

Governance participation is already low enough across the industry, i believe the focus of this industry is to create incentive model that will push more participation from non voter instead of amplifying the current active voter.

This model also unnecessarily add politic aspect into governance where there’s lot of subjectivity already.