We understand this are two linked but separate discussions,
It is actually true one must be cautious and prudent when setting an appropriate incentive program for delegates, but we also understand that both a delegate framework, and a potential future delegate incentive program (Conditioned to the condition that delegate participation proves being successful and having a positive impact) are necessary not just for Paraswap but for any other DAO.
Examples such as Arbitrum, Sky, Optimism, Uniswap, Lido, Hop and many others can demonstrate this as they help increase both the quantity and quality of the participation, the variety of voices and allowance of token holders who cannot or do not wish to participate actively in governance and prefer to delegate their VP to aligned members. Additionally, these incentives ensure professionalism, commitment, high-quality participation and sufficient dedication from the delegates.
The SEEDGov delegation team has been working for more than six months on an incentive system to professionalise Arbitrum delegates. The proposal has had a very successful initial phase that was extended for two months due to its economic efficiency and an improved version with significant changes is now being voted on. For more information, you can read the reports submitted to ArbitrumDAO here and here.
In addition, we were recently invited to lead one of the two Working Groups on the recently approved proposal to enable ARB token staking. The Working Group is tasked with defining what an ‘active delegate’ is so that delegators maximise their rewards by delegating to active governance participants. If necessary, the SEEDGov ParaSwap delegation team can ask the Arbitrum delegation team to share their experience.
We know that each DAO is a world of its own, with its own characteristics and complexities that make it unique, and that it’s not just a matter of copying and pasting formulas that worked for another DAO. For that reason, we have opened the debate to collaboratively develop what would be the appropriate model for ParaSwapDAO.
Now, the issue you propose, we understand, is not in opposition but rather, for it to be successful, it can and should be complementary to an adequate delegates program, since it is important to keep in mind that, according to the results of the report we have presented, the DAO currently faces two very serious and delicate problems that must be addressed, which pose a significant challenge: low participation and concentrated voting power. This makes it potentially risky to undertake a grants program or fund growth, marketing, or other initiatives with DAO funds in this context. With current participation being low and voting power concentrated, these proposed votes could lead to an undesired outcome for the DAO’s treasury
We understand that given the current situation the DAO is facing, it is crucial to take actions aimed at increase tokenholders participation, whether directly or via delegates. Encouraging debate and engagement will strengthen ParaswapDAO, making it more resilient to potential proposals that, due to bad faith, negligence, or incompetence, may lead to unnecessary expenditures without producing the expected positive impact in the areas of growth and marketing.
Finally, when participation conditions are adequate to avoid the unintended consequences, as we stated previously on this post, we find your idea very interesting and on spot on. We also believe that ParaSwapDAO should have a growth and marketing program funded by the DAO itself.