RFC: Delegate Optimisations in Governance: 1

[eIP] Euler Improvement Proposals RFC
1
  • Title: Delegate Optimisations in Governance 1
  • Author(s): river0x
  • Related Discussions: N/A
  • Submission Date: 23 Nov 2022

Simple Summary

I propose, with the approval of the DAO, to automatically segregate delegates based on participation. This will increase participation in governance by rewarding the most active delegates and mean greater representation in decisions reached.

Abstract

Disclaimer: I am a senior researcher at Euler Labs. However, the following comments and views are my own and do not represent the positions of any affiliated organisations.

Euler’s governance is a credit to the protocol. Contentious issues get worked out and agreeable proposals are quickly approved. We should be proud of the ecosystem that has flourished.

Nevertheless, there is a growing problem among some delegates. Many have a sizable EUL delegation, and yet contribute very little, if anything, to the governance of the protocol. By my estimates (taken from app.euler.finance/delegates), some 30K EUL is currently delegated to delegates that do not vote / contribute.

Motivation

This is problematic because contentious votes like EIP24 do not have the full weight of the community behind them: voices remain unheard. So long as delegations continue to inactive delegates, some voting power remains unused.

I propose the splitting of delegates into two groups: Active Delegates and Public Delegates. This is the first step in my DOG (Delegate Optimization in Governance) plan, which ultimately aims to codify the lifecycle of a proposal, though more on this later.

Specification

My proposed solution is to classify delegates into two tiers (for now):

  • Public delegates (no change required)
  • Active delegates (details mostly worked out, implementation is purely on the front end)

Public delegates will remain as they are. They will remain on the front end for EUL holders to potentially delegate to them under app.euler.finance/delegates.

Active delegates are delegates that meet the following criteria (provisional, please give your thoughts):

  • The delegate votes on at least 50% of Snapshot votes in any given month
  • The delegate must give a comment on Snapshot as to why they have voted this way. See the following image for context.
  • The delegates must have no fewer than 500 EUL delegated to them. This is to prevent people with 1 EUL spamming the status. This number I have selected is very much a suggestion and would love to hear the DAO’s thoughts.

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These criteria are provisional and I’d love to hear your thoughts on them. In return for these two checks being met, Active Delegates will be placed on the front end above Public Delegates alongside receiving a checkmark (like Twitter). In addition, key DAO contributors would be engaged to interview any Active Delegate who’d like to be interviewed to codify their background and philosophy with relation to Euler’s governance which is then hosted on the Euler Finance website, in cooperation with The Euler Foundation.

See the following for a mockup as to how this might look. Please note the proposed delegate profiles are merely suggestions and not representative of the end result.

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As for enforcement, it can be verified automatically by scraping on-chain data. There are no changes required to the existing governance system: this proposition is merely cosmetic.

The aim is to incentivise delegates to increase participation and explain decision making. Active delegates will be rewarded with priority on the front end, and may receive greater EUL delegations by being closer to the top of the page. In addition, their profile as a contributor to Euler will grow, alongside the prestige that this entails.

Points to consider

Implementation might take a short while. I suggest we wait 1 month from the point of the vote passing in order to provide everyone an equal chance to become an Active Delegate.

The 500 EUL threshold could be too high, and I’d like to hear your thoughts on this number.

A pardon system could be implemented for Active Delegates who are temporarily AFK but do wish to remain an Active Delegate. My suggestion is an Active Delegate can be placed into this “Pardon Zone” for the number of months they’ve been active as a delegate but in weeks (e.g. 6 months = 6 weeks) to a maximum of 8 weeks.

Voting

It would be a simple Yes / No to implement this idea, based on the following agreements we make as a DAO. This would only be put to a vote once a consensus is reached on how this proposal might look.

2 Likes
2

Hey this looks cool. Do you reckon active delegates should special powers, for a proposal to be considered, an active delegate must approve it?

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3

This is a great proposal. We think creating a distinction between active and public delegates makes a lot of sense.

We’re committed to continuing to be an active delegate and growing our presence on Euler’s governance with a special focus on risk related issues. Incentivizing active delegates with more visibility is a great idea to increase participation and transparency. We’ll vote in favour of this.

1 Like
4

Hey! A very interesting idea indeed! As for the criteria I would add also the following:

  1. I would set a minimum amount of autodelegated tokens at 1000. On the one hand, it will guarantee that an active delegate is able to create proposals on Snapshot and meaningfully participate in the voting even if other users for some reasons stop delegating him/her. On the other, it will show a skin in the game of an active delegate being responsible not only for someones interests but for his/her own assets.
  2. Imo, an Active Delegate should have at least one meaningful RFC posted.

Since we have had a discussion here and in Discord regarding the proposal threshold, I suppose that Active Delegates could be those who carry out a temperature check and create voting on Snapshot. It could help to avoid voting gamification.

And lastly just a question, you mentioned some 30K EUL is currently delegated to delegates that do not vote / contribute. At the same time there are lots of EUL not even delegated, especially it concerns investors assets. Maybe you had a discussion with early investors whether they are interested in delegating their EUL to some active delegates?

All in all, I fully support this proposal!

2 Likes
5

thank you for this! I am open to the suggestion of 1000 EUL. Thank you Raslambek. Also, given the difficulty of identifying “meaningful”, perhaps (2) could just be met with one passed vote? I.e. to become an active delegate you’d need:

  1. To vote & comment on at least 50% of proposals
  2. Have 1000 EUL delegated to you
  3. Have at least one successful proposal in the past
2 Likes
6

Thanks for putting this together. I see it as an important first step toward a healthier governance system.
I agree with what @Raslambek is saying above.

1 Like
7

In favour of increasing the EUL threshold to 1000 EUL and having at least one successful proposal in the past for active delegates. This will definitely reduce gamification.

1 Like
8

I think one successful proposal may limit the pool too much

9

I agree with @BlockEnthusiast . Maybe we can introduce this at a later stage.

2 Likes
10

I wonder, would it be worthwhile to suggest users delegate/redelegate on the frontend if:

  • EUL is delegated to an inactive delegate
  • EUL is undelegated + do not vote
11

In my eyes, an inactive delegate is someone who hasn’t voted in two weeks? Does that feel like a reasonable number for all of us?

@BlockEnthusiast

Or is it someone who simply doesn’t fit the active delegate description? I’m not sure if I support the creation of this tier that feels like penalising delegates who aren’t super active. It might disincentivise otherwise promising contributors.

12

Thank you for this proposal. We at StableLab agree that it is very important for delegates to be active in voting, providing rationales, and commenting on the forums.

Minimum Voting Participation Rate:

We agree that delegates should be required to vote and provide rationales in order to be considered active delegates. However, 50% is still quite low. We believe it is reasonable that to be considered active, delegates must vote and provide a rationale for at least 75% of votes as this will ensure that they are committed to staying up to date with Euler.

At StableNode, we expect to maintain a 100% voting rate but we do not expect others to maintain a 100% voting rate, since we have a governance team, and it is unrealistic to expect the same level of responsibility from someone who acts as a delegate outside of their job. However, if active delegates are to be rewarded then we should increase the minimum voting participation rate to around 75%. It seems like the middle ground.

Proposal requirement:

We agree with @BlockEnthusiast and @carebbear that requiring a successful proposal might limit the active delegate pool and lead to delegates proposing unnecessary RFCs to try to be considered active delegates. However, we believe this is worth revisiting as a requirement at a later date once more delegates have the chance to naturally propose RFCs.

Active vs public delegate threshold:

Finally, we believe 1000 Eul is too high of a threshold as it makes it difficult for new delegates to gain delegation. If they do not appear on the active delegation page until 1000 Eul it may be impossible for new members to ever reach this as those who wish to delegate will not see them as an option on the delegate page.

1000 Eul is about $5000 which might be too steep of a buy-in price for some and leaves the delegate pool not very diversified. We think the initial suggestion of 500 Eul is more appropriate as it is still a substantial amount but is not too high a barrier that it would limit worthy members from achieving active delegate status.

4 Likes
13

As part of DAOStewards, I think this proposal steers the protocol in an overall positive direction.

We agree with @Matt_StableLab that a voting threshold of 50% might be too low and 75% make more sense in this context. Further I would like to suggest that each delegate profile should show the % activity for each delegate and all delegates should be default sorted by % activity on the new proposed UI.

The proposed 500 or 1000 EUL threshold for ADs is a bit high and prevents potential delegates with merit but no funds, from participating. I suggest having a poll to decide this threshold with the max option of 500 EUL

Delegations: individuals or groups need down time, but this should not affect the ability of the delegation to loose context of what is happening in the DAO. A pardon of max. 8 weeks makes sense.

14

Thanks for these! FYI given that these comments are still rolling in I’m going to suggest we keep the discussion open for now and not move to a vote - there’s more to this topic.

I see your concern about the barrier to entry 500 EUL presents but we need some sort of anti-sybil measure that doesn’t centralise power into one authority - do you have a better suggestion? It’s contentious to entrust an individual to decide who is and isn’t active. It’s too normative.

Perhaps let’s start with 60% voting participation and move from there? It can always be updated later. I think sorting by % activity could potentially lead to people participating without contributing meaningfully simply to get a higher spot on the leaderboard. This doesn’t seem ideal to me, but I’m open to hear your thoughts on why you think it should be implemented - it’s a little unclear at the moment. Thank you though - these points are all very useful.

Generally speaking I want this to be an inclusive system to begin with and then the barrier can get raised as time moves on. Governance is a very delicate thing and to act too swiftly could dissuade good contributors from coming to the DAO. Start small!

In the spirit of compromise perhaps we should settle for 600 EUL and 60% activity? What do we all think of this?

15

Do you have any thoughts about integrating gitcoin passport as an anti sybil mechanism?

This can work if there is general consensus

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I like 600 EUL & 60% activity. It’s clear there’s a lot of interest in this proposal so it would be good to get to implemented (which may take some time). Re: gitcoin passport, it’s good but I fear it’s a bit focused on the gitcoin ecosystem which at this point doesn’t seem to have too great a crossover with Euler. I’m very open to revisiting it. I also think it’s important that ADs have some sort of voting power behind them and with 600 EUL delegated this is ensured.

I’ll redraft it as a final prop and move to a vote shortly.

2 Likes