RFC: Delegate Optimisations in Governance: 2 - Recognised Delegates

[eIP] Euler Improvement Proposals RFC
1

Author(s): @SuperPat

Related Discussions: RFC: Delegate Optimisations in Governance: 1

Submission Date: 14 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 >75% of voting participation overall
  • 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. New Recognised Delegates submit applications
  2. Existing Recognised Delegates** review the application to gatekeep & filter the low-quality applications
  3. 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.

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: Previous discussion related to delegates structure change – RFC: Delegate Optimisations in Governance: 1

  • Yes, in favour of the proposal
  • No, against the proposal
  • Modify the proposal

0 voters

2 Likes
2

I like this further iteration upon what’s going on. I’d like to hear the community’s thoughts on a higher voting participation rate given that this position will potentially be compensated - it seems like that there is room for a higher rate of voting here (but I’d love to hear your thoughts on this).

3

Hi! Thanks @SuperPat for this proposal that will definitely contribute to the perfection of the governance system.
Just would like to make some comments:

  1. Quarterly community Snapshot vote for the top 10 members to be the Recognised Delegates of the next quarter. I would change it to up to 10 . The reason behind it is that given compensation mechanism is going to be introduced, it could attract a huge number of drophunters and abusers of other kind. So let’s assume there are no 10+ really distinguished people to chose from. In this case the DAO will be obliged to vote for those who are not 100% suit the post. So up to , imo should protect the DAO from the unnecessary commitments.
  2. Agree with @river0x that the proposed compensation rate should require a higher voting rate. I would suggest 80-85%.

And one question, how the voting is going to be organised? Is it going to be one proposal for a set of 10 people or each candidate will be subject to a separate vote?

4

Thanks @SuperPat, I would be honored to be a part of this.

I think this is a great progression on @river0x’s initial proposal.

A higher voting rate should be a must going forward as these are compensated roles. And I do agree with @Raslambek in that 10 positions may be too much to start. There is always room for expansion as things develop. I’m a fan of an iterative approach with little changes as the DAO evolves.

1 Like
5

Generally supportive.

As others have noted, I’d like to see participation rate be modified, but not to a higher fixed threshold. I think we should implement something similar to Maker, where to even qualify for compensation you must be above a certain threshold. From there, your compensation is decided based on how close you were to 100% (eg., 75% or 80% to qualify, then compensated proportionally based on your activity delta between 75-100). This will incentivize delegates to vote at 100% to maximize their potential earnings.

Damn, I need to become a recognized delegate :wink:

1 Like
6

Thanks @river0x @Raslambek @knightsemplar and @defioperator.eth for your support and feedback.

  1. Regarding the 75% baseline participation rate:

In the last three months we have had 20 proposals in total (counted using the voting end dates):

  • 6 Snapshot votes between 15 September and 15 October
  • 7 Snapshot votes between 15 October to 15 November
  • 7 Snapshot votes between 15 November to 15 December

A 75% overall participation rate allows you to miss voting on 5 proposals over a 3 months period. An 80% overall participation rate allows you to miss voting on 4 proposals over a 3 months period.

Since there isn’t that much of a significant difference, I will leave it to the community to signal adequate changes. Although I want to point out that as our governance gets busier, 5% extra in participation requirements can make a big difference in governance overhead.

  • Increase voting participation requirements to 80%
  • Keep the current voting participation requirements (75%)

0 voters

  1. Regarding the number of Recognised Delegates to start with

I suggested 10 Recognised Delegates as we have many more community members that would fit into the criteria to be a Recognised Delegate, 10 is a number that doesn’t make Recognised Delegates super exclusive or ornamental.

As to @Raslambek’s suggestion that the DAO can have a flexible range of how many recognised delegates, I strongly suggest otherwise. It is logistically difficult for the DAO to “vote out” unqualified members who will be the majority of applicants, and I argue that it is easier for the DAO to “vote in” qualified members to a limited number of posts. The assumption here is:

Number of qualified & willing applicants > Number of Recognised Delegates Posts

Thus creating competitions among the applicants to be “voted in” to become Recognised Delegates.

However, If the community believes it’s better to start with a lower number of posts and increase it after we see enough interest among community members, I suggest we lower it to 6 posts:

  • Lower the number of Recognised Delegates’ positions from 10 to 6
  • Keep the proposed number of positions (10 positions)

0 voters

7

Thanks @defioperator.eth great suggestion, we are looking into implementing performance-based formulas to calculate a Recognised Delegate’s compensation, but due to the complexity & extra problems, they involve we decided not to introduce it at the launch. However, it is definitely something we are interested in implementing and receiving community feedback on.

1 Like
8

one worry i have in focusing on rate of vote participation too closely is thoughtless voting. i think the suggested vote rate is sufficient, and if we want to set a higher bar, maybe requiring short descriptions of why a delegate gave a specific vote.

2 Likes
9

Hey @SuperPat , thanks for so fast and detailed follow up. Maybe I was misunderstood, the idea consisted in that the DAO would have some flexibility in terms of number of DD posts. Let’s assume that Number of qualified & willing applicants < Number of Recognised Delegates Posts, for example there are 9 really qualified candidates, but having committed to chose 10, the DAO would be obliged to nominate 1 that has not been shortlisted by the Committee.
At the same time, taking into account your explanation as regard to possible pitfalls that flexibility parameter could create, I would agree to start with 10 positions and probably come back to this issue at a later stage.

1 Like
10

I didn’t mention this because I thought it was covered in the first iteration of optimizations but I fully agree that communication % should be a req as well.

1 Like
11

I would like to add a few suggestions to the proposed process:

  1. Existing Recognised Delegates** review the application to gatekeep & filter the low-quality applications

Reasons as to why an application was filtered out should be accessible and a candidate should be able to challenge the fact that he was filtered out. This mitigates the risk of recognised delegates colluding against a qualified delegate, who was sorted out due to a “low quality application”. I suggest adding:

  • “The reasons for filtered out a application must be transparent and allowed to be challenged”
  1. Criteria of a Recognised Delegate

Every recognised Delegate should give a sufficient explanation of why he voted for a given option on snapshot. Make it mandatory for these explanations to include the data the decision was based on. The intention is for this to challenge every delegate to do proper research. With this criteria achieving >75% vorting participation gets filtered for the rsik @connormartin raised. I suggest adding:

  • “Every recognised Delegate should give a sufficient explanation of why he voted for a given option on snapshot which includes the data, the decision is based on”

Awareness about the community
There are only 4 chances a year for a candidate to become a Delegate. Putting in the work to become a recognised candidate takes due time and can result in significant sunk cost. In order to allow potential candidates to better prepare for the community vote, I suggest adding:

  • “Every candidate who is looking to become a recognised Delegate in the next quarter
    should register his intent 4 weeks, before the official community votes start”

This will allow every candidate to prepare his approach the best way possible.

Looking for your feedback.

Patrooney

12

Can i ask how the given selection of recognized delegates was chosen? Seems like there should be quite a few more to start out. For example - I think I’m the #2 delegate filtered by number of delegated votes. Curious why i, or lets just say the top 10 current voters, would not be included?

13

Thanks @connormartin @patrooney and @Raslambek for your feedback!

  1. On requiring RDs to attach explanations to their votes
    Really good feedback! I fully support this. Currently, it is already possible for anyone to attach an explanation to their votes in Snapshot, this suggestion will be included in the proposal eIP iteration.

Nevertheless, I disagree with @patrooney here that RDs should by default provide explanations of their votes in length. This would create heavy operation overhead for RDs, especially considering it’s the first iteration. Although RDs should explain their votes in sufficient detail if their votes are being challenged by community members, especially those that delegated to them, I do not think it is a feasible idea at current stage to make it a default requirement for every vote for RDs.

  1. Transparency of RD filtering process
    I fully agree with @patrooney here that the process of RD filtering should be made accessible to the community with explanations attached. The process should be aimed at filtering out the lowest-quality applications only to avoid wasting the community’s time & attention, all applications will be made public accepting challenges, and ultimately it’s the governance vote that will decide who will become RDs.

  2. Open RD registration in advance
    I agree with @patrooney that RDs should be able to register in advance, though I disagree that supposedly it will make RD application process easier. The registration will take place in advance to ensure enough time to conduct filtering & governance votes before a smooth transition. Applicants interested in becoming an RD should not only become active in the community 4 weeks before the vote, but from the moment they decide they want to run in the next RD selection. Applicants should not feel discouraged to participate in the community after failing one round either as long-term sustained community engagement is key to being an RD.

14

We can do a trial month where no rewards are given and see how it runs. This can be an iterative process, rewards can be vested (via Llamapay pls!). We can figure it out as we do.

In my experience, any community activity, cannot escape development momentum - new feature / product launches will generate lots of interest, otherwise its pretty dead. So it would take at least 2-3 months to see results.

15

Hey, @SuperPat, thank you for this excellent proposal! Having a compensation mechanism will increase delegate participation and produce quality engagement.

Here are my thoughts on this proposal

  1. this proposal details who the Recognised Delegates are and how to pick them, but I’m afraid this proposal doesn’t discuss their duties other than working closely with the team. I love to see a detailed work description of these Recognised delegates to ensure accountability.

A couple of clarification questions,

  1. Should the recognised delegates have the voting power of 600 EUL as introduced in eIP32, or can anyone who meets the criteria apply as a delegate?
  2. instead of making existing recognised delegates choose the next, what do you think of a trustless system like the one of Element financess’ GSE ?
  3. will the 80% voting participation be calculated from the insertion on the DAO or will it reset each term, and will it only start calculating after this program is implemented?
16

View on the current format

We favor compensating those members who add value to the ecosystem, especially as it outlines a pathway for community members to get more involved in the DAO. Even with the active delegate proposal, it can be difficult for those who want to delegate to filter through all the candidates. Still, in combination with a recognized delegate program, it can create a workflow for “rising delegates” to get more publicity.

However, voting members based on candidates selected by the core team could lead to centralization issues. This would not be a permissionless system and would make it harder for new members to become recognized delegates. Voters are often quite apathetic when voting people into power; recognized delegates will likely have large voting power and will be more easily able to keep themselves in power.

Additionally, this incentivizes people to simply be likable and not voice dissenting opinions out of fear that they will be removed from their position, not because they weren’t doing good work but because they didn’t agree with those in power.

Moving Forward

We believe the recognized delegates should be a permissionless program role where anyone is able to become a recognized delegate and receive compensation if they follow the outlined path and adhere to responsibilities.

Recognized delegates will differ from active delegates in the following ways:

Recognized Delegates Active Delegate
Opt-in System Does not have to Opt-in
Eligible for compensation Ineligible for compensation
Minimum Voting Participation - 80% Minimum Voting Participation - 60%
Communicate with the community Only provide rationale on Snapshot

Example:

Using the MakerDAO model.

Delegate A: Has over 600 EUL, votes on 100% of proposals, and is highly communicative then they are compensated at the full 200 EUL.

Delegate B: Less than 600 EUL have a voting turnout between 99% and 80% or are only somewhat active in communicating their votes, and their compensation is decreased according to a decided formula.

This way, everything is trustless, and the positions cannot be centralized or gate-kept.

Final thoughts

We are very excited about this proposal as we believe it will encourage more community members to be active participants and help Euler DAO mature and grow. However, we think it is important to implement this safely and permissionless to prevent centralization in the Euler.

By Matt & Bobby @ StableLab

17

Thanks @uhhhh @0xBaer @Matt_StableLab for your valuable feedback!

  1. Trial month of the Recognised delegates programme proposed by @uhhhh

Could you please elaborate on vesting first month of rewards? What do you see as the expected outcome? I agree we will see a lot of new areas we can improve once the programme starts, though I envisioned it as a iterate-as-we-go process rather than a trial month.

  1. Duties & accountablities of Recognised Delegates proposed by @0xBaer

RDs have main responsibilities: 1) Actively participate in governance (75%/80% voting participation threshold as the community decides), if you fell below that, you are disqualified from the compensation; 2) give reason to each of your vote as per community request in the earlier discussions; 3) Expectations of being community representatives: after becoming an RD, there is expectation of you to communicate diligently with the community & give feedbacks to the team on product development. Though 3) is a somewhat subjective criteria, we believe the community is in the best position to judge it & indicate that in the next round of RD election vote.

  1. Minimum delegation criteria for RD applicants by @0xBaer

eIP 32 proposed minimum 600 EUL delegation in order to prevent spammers gainning Active delegates status by gaming the data fetching system. Since there will be a initial filtering process for RDs and it is a permissioned role by the community, I don’t think RD applicants need to meet the same criteria. However, a minimum threshold does help with new RDs’ legitimacy, thus I would open it up to the community to give feedback on this

  • Require Recognised Delegate applicants to have minimum 600 EUL delegated (same as Active Delegates)
  • Do not require Recognised Delegate applicants to have a minimum EUL delegation criteria
0 voters
  1. Permissionless & vote-less Recognised Delegates application process by @0xBaer & @Matt_StableLab

The DAO is still in its infancy, whether in terms of amount of token holders or governance activities. Directed yet decentralised process is key to achieve gradual decentralisation. It’s worth pointing out that the initial filtering committee set up specifically for kicking off the first round of RDs includes 2/5 active community participants @Raslambek and @knightsemplar, who kindly agreed to help out with the process. Though the initial filtering is only aimed at filtering out the lowest quality applicants, as @patrooney suggested earlier, the initial filtering process will be made transparent to all community members & will accept challenges to the results. Most importantly, it is the community vote that will ultimately decide who will be elected as an RD, which is very different from a centralised system. The elected RDs should align their interest with the community as they plan for standing in the next round of election.

That being said, I do envision the DAO to transition towards an even more decentralised and trustless system in the future, and I will be very glad to discuss how such system can be designed & applied to Euler DAO.

  1. How will the 80% voting participation rate be calculated by @0xBaer

Very good question! We definitely should define this ahead of the programme. I propose setting >80% voting participation rate in the past 3 months prior to RD application among the minimum requirements to apply, and disqualifying RDs to receive compensation if their voting participation fell below 80% in any of the months during their 3-month term.

  • Yes
  • No
  • Modify (please propose)
0 voters
18

Vesting is referring to all eul payments, intent is to automate the process, reduce admin friction.

I’m advertising Llamapay in case thats not clear lol

19

Great proposal, it paves DAO further decentralisation rails.

@Matt_StableLab noticed that we need to pay attention to a permissionless program which I also support.
We should take advantage of the lessons of other DAOs, thus we can make our system more advanced than it may be.

What do you think about shuffling recognised delegates with others? Being on the top of the page gives them substantial advantage and therefore centralisation of governance power.

20

@uhhhh Thanks for your suggestion of Llamapay! I will look into it, and we can definitely iterate the process with additional tools.

@nikita Good point, the main reason for pinning the Recognised Delegates’ profile on the top is to help community members select the most active, most value-added delegates to delegate to, so in some ways yes delegations will be more or less favoured towards Recognised Delegates > Active Delegates > Public Delegates. However, is that really a problem if Recognised Delegates are elected by the DAO & serve fixed terms with specified duties? In my opinion that only becomes a problem if the delegations are extremely skewed towards recognised delegates and do not rebalance after each election, and the DAO can elect mitigating methods in that case.