PIP-58 - ParaSwap Delegate Incentives Program - Cycle 1

Governance Proposals
1

*This proposal is split into two posts due to character limits, the first post includes the TL/DR and antecedents, and the second post, the proposal itself.

Post 1/2

PIP-58 - ParaSwap Delegate Incentives Program - Cycle 1

TL;DR

  • We propose a maximum total budget of USD 180,000 in a six months period in delegate incentives, with a maximum monthly compensation of 2,500 USD worth on $PSP - or in the future new token it may eventually migrate to in accordance with Project Miro - per month per delegate.
  • Maximum number of delegates to be included in the incentive program: 10 as of now, 15 total from the second half of the program.
  • Creating Delegates’ compensation tiers:
    • Tier 3: TP ≥ 75% and < 85%. Compensation range: up to $ 1,500.
    • Tier 2: TP ≥ 85% and < 95%. Compensation range: up to $ 2,000.
    • Tier 1: TP ≥ 95%. Compensation range: up to $ 2,500.
  • Min threshold requirement:
    • ≥ 80% participation rate in votings from the start of the delegate trial program on Thursday, December 5th, 2024 to the present day.
    • Minimum Delegation: 1M PSP tokens or equivalent in USD if migration to the new token takes place as a product of Project Miro.
    • Have a ParaSwap forum account with a minimum age of 3 months.
    • Have created a delegation platform in the Delegation section of the forum with the appropriate template.
    • Apply in the application thread that will be opened if this proposal is approved.
  • Scoring Weight:
    • Participation Rate 90 (PR90) - Weight 30%
    • Snapshot Voting (SV) - Weight 30%
    • Communicating Rationale (CR) - Weight 25%
    • Delegates’ Feedback (DF) - Weight 15%
    • Total Participation (TP):
    • TP = PR% + SV% + CR% + %DF
  • Adding the possibility of cancel or revoking incentive program ban and also creating the incentive program suspension o adjust the parameters regarding the progression of the Program.

Summary

We propose a 6-months incentive program for delegates then work on an improved version that leans towards automation for certain attestations and reputation-based reward allocation.

Abstract

The primary goal is to launch a a Delegate Incentives Program over a 6-month period. This program will gather feedback and insights from the community to design a second cycle more closely aligned with the ParaSwapDAO, should the community decide to proceed. Additionally, the program aims to encourage active participation in ParaSwap governance and professionalize the role of the involved delegates.

To achieve this, appropriate incentives should be established that do not compromise the treasury’s health. This means no disproportionate allocation of funds. Instead, as the program and the DAO evolve, governance will assess the most suitable and sustainable incentives.

Goals & Review - Motivation

Antecedents

After the DAO’s approval in November 2024, a 3-month delegate trial program was launched in December of that year with the aim of address a critical issue identified in ParaSwapDAO, as highlighted in our report, whereby despite ParaSwap ranking among the top 3 DeFi aggregators and demonstrating strong activity metrics, the DAO itself suffers from concerningly low participation levels and a high concentration of voting power.

Thus, the program addressed two primary objectives: to increase both the quantity and quality of participation and enhance diversity of voices. It also allowed token holders who are unable or unwilling to actively participate in governance to delegate their voting power to active delegates aligned with their vision, promoting a more balanced distribution of voting power.

Specifically, the goals were:

As we are nearing the 3-month period, the time has come to evaluate the results and impact of the program for the DAO to assess its renewal, elimination or modification.

Results

We understand that the desired objectives have been far exceeded, as evidenced by the following observations and metrics:

  • Forum Participation: From a simple reading of the forum, very low activity, posts and proposals can be observed, with posts and activity very spaced out and long silences in the forum even for months, until October 2024 when we presented our ‘Driving Protocol Success through Optimized Governance’ post, with activity in the forum increasing significantly especially since November 2024 when the proposal for the delegate trial program was presented, approved, implemented and started to operate with 12 active delegates participating, plus another 3 delegates who presented themselves in the forum after its initiation. There is a lot of good feedback and positive critical comments on each proposal, which has led to the proposals being improved in their content and wording.

  • New members and delegates: Also, reading the forum, we see the incorporation of new members to the DAO, many of them delegates interested in participating in the trial program, but we also see the introduction of service providers interested in offering quality services to the DAO. It happens that one of the service providers approved by the DAO has announced his intention to become a delegate, which we see as very positive because it is very healthy and we will try to repeat the fact that a development company not only shows interest in offering a service, but then wants to actively participate in the governance of the DAO.

  • Active members of the community who deepened their participation: In addition to the incorporation of a total of 15 active delegates, many of them professional delegates active in several protocol governances, we see as a very good indicator of the success of the program that even historical members from the DAO found this program as a vehicle to potentiate their voting weight and to amplify their voices. Other members of the community have also shown interest in participating as delegates and in other roles. The objective of enabling community members to deepen their participation was also achieved.

  • Delegate participation: The majority of the 12 delegates who have participated in the 3-month Delegate Program Trial Period have met the participation expected at the start of the program: Keeping a minimum 80% participation rate in votings and informing the community of 100% of the voting rationales and decisions.

  • By analyzing the snapshot votes and the forum at the start of the Delegate Program Trial Period on December 4th, 2024 to the present, the following metrics emerge, which can be found more visually in the Delegate Tracker sheet we have been keeping:

    • 12 delegates participated in the program;
    • There have been snapshot 5 votes since December 4th, 2024 to the present, the first one was PIP-55- Reward Mechanism Automation;
    • 7 delegates have had 100% participation both in the snapshot voting and in presenting the rationale for their votes in the forum: Citizen42, Jameskbh, Ignas, Boardroom, Avantgarde, Arana Digital and SEEDGov.
    • 3 delegates have voted in 100% of the snapshot votes, although they have not submitted the rationale in the forum for all their votes: PGov (justified 4 of its 5 votes) Mehdi (justified 4 of its 5 votes) and Curia (justified 4 of its 5 votes)
    • This shows that 10 of the 12 delegates voted 100% in the 5 votes that took place during the delegate program trial period;
    • The remaining 2 delegates did not have voting power in the first 2 votes during the program period, after which they have voted and justified their votes in the 3 subsequent votes: 0xAlex and DAOplomats

These metrics show that the trial program was a success and that the vast majority of participating delegates have had high participation rates in the DAO’s decision-making process , which strengthens the DAO and allows tokenholders to delegate their voting power to delegates who have actively participated and justified their decisions.

  • Proposals submitted for a vote: In terms of hard metrics, and from the analysis of the ParaSwap Snapshot page and the ParaSwap DAO Analytics dashboard we have developed, the following conclusions can be drawn regarding DAO activity:
    • Very little voting activity in the DAO from December 2023 to November 2024, only 6 votes in this one-year period, concentrated in 3 months: 4 votes in January 2024, 1 in April 2024 and 1 in June 2024, while the rest of the 9 months of this one-year period have no voting at all.
    • Since November 2024, when the delegate trial program has been presented and approved by PIP-54, there has been an increase in voting on proposals in the DAO, which is a clear indicator of increased participation, with the presentation, discussion and voting on proposals being the central activity of all governance. In the 4 months from November 2024 to date, 8 proposals have been submitted for voting, 1 in October (voting ended in November), 1 in November, 2 in December, and 4 in January 2025.
    • The DAO then shows a sharp decline in the number of submitted proposals, reaching an almost complete standstill from November 2023, resulting in nearly a year of inactivity before undergoing a strong resurgence in activity .

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  • Amount of PSP in votings:
    • Similar to the previous case, it is observed that the DAO experienced a process of activity until December 2023 or January 2024, with a peak voting PSP of around 271M PSPs voting in PIP51: Update Community Token List to Increase Quote Competitiveness & Gas Efficiency, and with an average throughout 2023 and early 2024 of around just over 100M PSPs voting.
    • This is followed by a large one-year period of almost no activity.
    • Starting in November 2024, there is a sharp increase in activity and voting PSP, with a peak of around 366M PSP voting in PIP-56: Implementation of Project Miró Roadmap and Migration, marking the highest participation in the DAO’s history. Additionally, the minimum participation in all votes since November 2024 has remained close to 200M PSP, significantly exceeding the previous average participation levels.

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This significant increase in PSP participation since the start of the Delegate Trial Program means that we are experiencing a process whereby the resilience and security of the DAO is being strengthened, as the more PSPs participate in voting, the more difficult and expensive it is to carry out a governance attack, and the more robust and representative of tokenholders the decision-making processes are than before.

  • More balanced distribution of voting power:

    • As we analyzed and reported in our Driving Protocol Success through Optimized Governance post, the DAO was experiencing a process of significant concentration of voting power in very few addresses, especially in one that controlled the direction of DAO decisions, a situation that compromised the decision-making process by leaving the decision to approve or block proposals in the hands of a few.
    • Since the start of the Delegate Trial Program we are experiencing a reversal of this process, there are currently 12 active delegates, plus other anonymous addresses which concentrate a good amount of voting power, ensuring that decisions are made after due debate, exchange of views and opinions and ensuring that all voices are heard and have weight in the decision-making process.

  • Concentration of Voting Power:

    • Voters with voting power between 1,001 and 10,000 PSP: 3 months ago: 1,831 I Now: 1,834 - Similar
    • Voters between 10,001 and 100,000 PSP: 3 months ago: 977 I Now: 980 - Similar
    • Voters with more than 1 million PSP: 3 months ago: 65 I Now: 86 - Increase of almost 33%, which means more distribution and less concentration of Voting Power

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  • Delegates Voting Power: Related to the previous point and analysing the Voting Power of each delegate participating in the trial program, whose public data is extracted from the snapshot delegate page and the delegation wallets informed in the forum by each delegate, we can list them as follows:
    • Citizen42 ∼ 17M PSP
    • Jameskbh ∼ 4.8M PSP
    • Ignas ∼ 21.1M PSP
    • Boardroom ∼ 11,9M PSP
    • Avantgarde ∼ 98M PSP
    • PGov ∼ 10.4M PSP
    • Mehdi ∼ 4.9M PSP
    • Arana Digital ∼ 4.8M PSP
    • Curia ∼ 15,9M PSP
    • SEEDGov ∼ 27,7M PSP
    • 0xAlex ∼ 4.8M PSP
    • DAOplomats ∼ 4,8M PSP
    • Likewise, the new WakeUp Labs delegation, which has not yet participated in a vote, has ∼ 0.9M PSP

The total PSP delegated to the delegates presented in the forum currently amounts to 277M.

As mentioned above, having more than a dozen delegates with this amount of voting power, in addition to the remaining anonymous addresses with significant voting power, ensures that voting power is better distributed and that decision making is more broadly distributed, with more voices and more debate than before, making it more difficult and costly to carry out a governance attack, and thus strengthening the resilience of the protocol.

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Post 2/2

6-months ParaSwap Delegate Incentives Program (DIP)

With the results analyzed above, understanding that the delegate trial program has been a success and has more than fulfilled the objectives pursued, we propose to go a step further and propose the launch of a 6-month ParaSwap Delegate Incentives Program (DIP) starting in March 2025.

In DAOs, it is common to face voter apathy, lack of active participation over time, and poorly informed decisions. If we aim for delegates to meet these and even higher standards, professionalize, and remain consistently active in the DAO, it is essential to provide them with adequate incentives/rewards. In this sense, experience shows that the delegate system alone cannot achieve the desired results, as it is unrealistic to expect a group of individuals to voluntarily dedicate the significant effort required for active and high-quality participation in governance (at least not to a great extent). Therefore, the incentivized professional delegate system has been gaining traction in the most important DAOs, achieving results such as increasing the participation of informed, responsible, and renowned actors in governance.

We are also aware that incentives can attract the wrong actors, send the wrong message, or demotivate those who are truly aligned with the values of ParaSwapDAO. We do not want that to happen, as it would represent the worst-case scenario. Therefore, we propose implementing this program, with the goal of refining and perfecting it through feedback, ensuring it serves the best interests of the DAO.

Specifications & General Parameters

The following parameters of the DIP are flexible and open to discussion, with the goal of gathering feedback from the community. Additionally, please note that the program may be canceled at any time.

Duration

The program’s first cycle will last for six months, as it is designed as an experimental foundation.

Number of Delegates to Receive Incentives

Given the number of delegates participating in the delegate trial program -12-, the current number of delegates -13-, and the participation metrics reviewed above, we believe it is appropriate to set the maximum number of delegates for the first 3 months of this first DIP at 10.

At the program’s midpoint, in month four - June 2025 -, applications will reopen and will remain open until the end of the program for delegates who meet the requirements and are eligible to apply at any time and be included into the second half of the DIP, with a maximum of 15 total delegates.

Requirements to Participate

  • Minimum Delegation 1M PSP tokens or equivalent in USD if migration to the new token takes place as a product of Project Miro.

  • Have a ParaSwap forum account with a minimum age of 3 months.

  • Have created a delegation platform in the Delegation section of the forum with the appropriate template.

  • ≥ 80% participation rate in voting from the start of the delegate trial program on Thursday, December 5th, 2024 to the present day.

  • Apply in the application thread that will be opened if this proposal is approved.

Votings included in the 3-month period of the Trial Program from 5 December 2024 are as follows 5:

According to the delegate participation metrics we have monitored, which are publicly available in ParaSwap’s Snapshot space, the delegates who currently meet the stated requirements and may apply if they wish are:

  • Citizen42 - 100% participation

  • Jameskbh - 100% participation

  • Ignas - 100% participation

  • Boardroom - 100% participation

  • Avantgarde - 100% participation

  • PGov - 100% participation

  • Mehdi - 100% participation

  • Arana Digital - 100% participation

  • Curia - 100% participation

  • SEEDGov - 100% participation

Delegates participating in the program who have not met the minimum participation requirements are:

  • 0xAlex - 60% participation -did not vote on the first 2 proposals-

  • DAOplomats - 60% participation -did not vote on the first 2 proposals-

New delegates introduced at the forum who have not participated in the trial program:

  • WakeUp Labs

  • Proof of Growth

  • Sov

We hope that all of you will continue to be involved and participate in the ParaSwapDAO so that you can meet the minimum requirements and apply for the proposed reopening of the application in June 2025!

Auto-exclusion: As we will inform below, from SEEDGov we will continue as usual with our activity as ParaSwap delegates, but since we propose ourselves as Program Managers and for transparency reasons and to avoid a conflict of interest, we will exclude ourselves from participating and receiving rewards under this first Delegate Incentives Program.

Number of eligible delegates: Therefore, excluding us, and despite considering a maximum of 10 incentive delegates for the first half of the program, there are 9 delegates who meet the requirements and are eligible to apply for this incentive program.

Delegates who do not currently meet the above participation requirements will have the opportunity to apply for the program in the application thread we will open at the beginning of month 4 - June 2025 - and will remain open until the end of the program, allowing delegates to apply at any time as long as they meet the eligibility requirements. The maximum number of delegates that can apply in the second half of the program will be limited to filling the total program cap of 15 delegates. Eligibility will be based on meeting the requirements, according to these parameters:

  • Minimum Delegation 1M PSP tokens or equivalent in USD if migration to the new token takes place as a product of Project Miro.

  • Have a ParaSwap forum account with a minimum age of 3 months.

  • Have created a delegation platform in the Delegation section of the forum with the appropriate template.

  • ≥ 80% participation rate in voting in the 90 days prior to the application.

  • Apply in the application thread that will be opened if this proposal is approved.

Tie Breaker: If, at the start of the program, more than 10 eligible delegates apply, or if, when applications reopen at the program’s midpoint, the number of applicants exceeds the 15 available slots, the following criteria will be used to prioritize delegate selection:

  • Priority will be given to the delegates who have cast the most votes in the last 9 months.

  • In the event of a tie with the first tie-breaker criterion, ties will be decided by the date of the first vote that these applicants cast. The tie-breaking value will be determined based on the end date of the vote in which the delegates participated, not the date when the vote was cast.

  • In the event that the tie persists further, the final decision will favor the delegates who were first to present their delegation platform.

Regarding delegates’ KYC (TBD)

Ideally, participating in the Incentive Program and receiving rewards should require completing KYC verification, both for compliance issues and to avoid sybil attack.

Incentive Budget

We propose that payments be denominated in USD and made in PSP tokens - or in the future new token it may eventually migrate to in accordance with Project Miro -. This aims to mitigate volatility that could cause:

  • Unpredictable reductions that would discourage delegate participation.

  • Unexpected increases that could result in excessive payments, both in USD and in the amount of tokens, negatively impacting the treasury.

Compensation amount: In order to determine the maximum amount we propose to compensate active delegates, we have undertaken a comparative analysis of what is the amount of compensation for delegate programs in other DAOs:

  • Aave: Compensation: $ 5,000 in GHO per month month

  • Arbitrum: Compensation: Up to $ 7,000 in ARB per month

  • Optimism: Compensation: ∼ 9,000 OP tokens per semester (∼ $ 4,000 average per month in Season 6, calculated based on the price of the OP token at the time of reward payment)

  • Lido: Compensation: Up to $ 5,000 in LDO per month

  • Uniswap: Compensation: Up to $ 6,000 in UNI per month

  • 1inch: Compensation: Up to $ 4,000 in USDC per month

At Compound, the first Delegate Compensation Program is under discussion and the proposed compensation is $ 5,000 per month.

On the basis of this comparative analysis and ParaSwapDAO’s own characteristics and current activity, we believe that a maximum of $2,500 per month is an adequate compensation to reward active ParaSwapDAO delegates in this first cycle. This amount can be ratified or modified by more or less if, at the end of the program, it is decided to continue it.

Payment method - Vesting

In order to ensure commitment and skin in the game by delegates participating in the program, compensation will be paid on a monthly basis but with a 30-day vesting **, which can be executed for example through Superfluid platform.

We suggest and encourage delegates to put the amount of rewards received into sePSP2 staking, which will benefit the protocol and the price of the token, as well as benefiting the delegate by receiving rewards in ETH and increasing their voting power.

Evaluation System for Delegates’ Feedback

The Program Manager would be responsible for evaluating the feedback provided by delegates, which goes beyond just feedback on proposals or topics, but includes participation in the forum and other forms of participation. The goal of this system is to:

  • Incentivize quality over quantity of feedback.

  • Extend the analysis across all contributions made by a delegate in the forum (instead of only considering those that reach).

  • Avoid unnecessary or spam comments made solely to achieve a higher score.

  • Allow delegates to focus on contributing to proposals or discussions related to their areas of expertise.

  • Incentivize other forms of participation, such as participating more than as a listener in the Community Calls that may be held, participating in a Working Group, participating in Telegram groups or other means of communication, making contributions or becoming actively involved in a particular debate, making a technical contribution, etc.

Evaluation Approach

The overall feedback and comprehensive participation provided by the delegate throughout every month will be evaluated, based on their participation in various proposals, discussions and governance activities. The aim is to measure the consistency, quality and overall impact of your contributions. Based on that, the Program Manager will evaluate each delegate’s performance and score them on a monthly basis. We expect delegates to comment on and/or provide feedback on proposals and discussions both before and during the voting process, and to actively participate where they believe they can make a valuable contribution in any area of governance. The aim of this participation should be to make valuable contributions, to foster debate, improve the proposal, or clarify issues not explicitly addressed within it.

We trust the goodwill of the delegates to avoid meaningless/spam comments and ensure that all contributions are sensible.

Meaningless comments, opinions or participation that are intended to spam without generating a real contribution, positive feedback or criticisms or questions that aim to challenge or improve the proposals under discussion will not be considered. Your interactions should contribute constructively to the discussions and the deliberation and improvement of the proposals.

Evaluation criteria

  • Relevance: Analyzes whether the delegate’s feedback throughout the month is relevant to the discussion.

  • Depth of Analysis: It evaluates the depth of analysis provided by the delegate concerning the proposals or discussions. This serves as a metric to assess whether the delegate takes the time to thoroughly meditate on the discussion and demonstrates attention to the details. Key elements include solid arguments, relevant questions, and thorough reasoning.

  • Timing: Considers when the delegate provides feedback, rewarding those who provide feedback earlier, as long as they meet the above criteria. Note that feedback will be considered as provided before voting.

  • Clarity and Communication: This is a review of the clarity, structured communication, and overall readability of the delegate’s feedback. Clear and well-written feedback is rewarded.

  • Impact on Decision-Making: While the proposer ultimately decides whether to incorporate feedback, high-quality feedback from a delegate often influences the final proposal that goes to vote. This criterion evaluates whether the delegate’s feedback tends to drive changes in proposals/discussions.

  • Strong involvement in a concrete debate: This is also a qualitative analysis, taking into account when the delegate is deeply involved in a particular debate or governance activity and makes a significant contribution or technical contribution given their skill…

  • Presence in Discussions: This is a more quantitative analysis, intended to reflect the effort of delegates who participate in most discussions.

  • Other forms of participation: Other ways of engaging will also be analyzed, such as participation beyond merely attending Community Calls, being an active member and making concrete contributions in Working Groups or Committees, the level of involvement in Telegram groups created for discussion and information exchange, taking the initiative to make proposals, and, more broadly, the overall degree of participation in other aspects of governance.

Monthly Evaluation Process

1. Data Collection: At the end of the month, the complete set of contributions by each delegate across all discussions is reviewed.

2. Overall Evaluation: The overall performance of the delegate will be evaluated, based on a holistic view of their participation.

3. Score Assignment: A level of 0 to 15 is assigned to each delegate, based on the consistency and quality of the delegate’s contributions over the month.

4. Monthly Report: The delegate’s performance over the month will then be reported and the delegate’s contributions are evaluated between 0 and 15.

Details: Terminology, Symbols, and Formulas

  • Activity Weight (%): Represents the weight assigned to each key activity to be measured in delegates.

  • Participation Rate - 90 days (PR90) - Weight 30: Percentage of the total participation of the member in votes in the last 90 days. This parameter will be calculated at the end of each month.

  • PR90% fórmula: (PR90 * 30) / 100

  • Snapshot Voting (SV) - Weight 30: Percentage of delegate participation in voting in Snapshot. This parameter will reset at the beginning of each month.

  • Tn: Number of total proposals sent to Snapshot for monthly voting.

  • Rn: Number of proposals the delegate voted in the month.

  • SV% formula: (SV(Rn) / SV(Tn)) * 30

  • Communicating Rationale (CR) - Weight 25: Percentage of communication threads with the justification of the delegate’s vote on the proposals sent to Snapshot. To encourage timely and proper communication with tokenholders and the community regarding voting decisions, only rationales posted in the Delegate Thread within seven days after the end of each vote will be counted for this calculation. This parameter is reset at the beginning of each month.

  • Tn: Total number of proposals that were submitted to a vote.

  • Rn: Number of honest communication rational threads where the delegate communicated and justified their decision within 7 days after the end of each vote.

  • CR% formula: (CR(Rn) / CR(Tn)) * 25

  • Delegates’ Feedback (DF) - Weight 15: This is the score given by the Program Manager regarding the feedback and overall participation provided by the delegate during the month.

  • The scoring system will use the following formula:

  • Total Participation (TP): Sum of the results of activities performed by the delegate. A TP% of 100 indicates full participation.

  • TP% formula: PR% + SV% + CR% + DF%

  • Payment USD (PUSD): The final amount of USD in PSP tokens that the delegate will receive in each month is based on his TP% and his Tier.

    • Tier 3: TP ≥ 75% and < 85%. Compensation range: up to $ 1,500.

    • Tier 2: TP ≥ 85% and < 95%. Compensation range: up to $ 2,000.

    • Tier 1: TP ≥ 95%. Compensation range: up to $ 2,500.

Parameter summary

Activity Weight (%):

  • Participation Rate 90 (PR90) - Weight 30%

  • Snapshot Voting (SV) - Weight 30%

  • Communicating Rationale (CR) - Weight 25%

  • Delegates’ Feedback (DF) - Weight 15%

  • Total Participation (TP):

  • TP = PR% + SV% + CR% + %DF

The percentages and calculation method for the Activity Weight and for the Tiers set in the following proposal, as well as the inclusion of a new parameter or tier, will be subject to modifications, adjustment and improvements by the DAO and/or Program Manager based on experience as the program progresses. The goal of this is to adjust the parameters of the program to reach the optimal level of professionalisation and engagement of the participants, to raise the quality standards to the desired minimum, and to incentivize delegates to engage in more and higher quality activities.

Administrative Budget

In this Cycle 1 we do not propose allocate any operational budget to administering this ParaSwap Delegate Incentives Program.

Program Manager Details:

  • SEEDGov offers and proposes to be the Program Manager of this first cycle of the program free of charge thus not adding budget to the DAO in this first cycle of the program.

  • We propose that the responsibilities of the program manager be carried out in collaboration with the DAO team or whoever assumes these duties in the future, whether under a new or existing role.

  • It is worth mentioning and reiterated that no administrative budget is requested for this task during the 6 months of the first cycle of the DIP.

Responsibilities

  1. Check corresponding data to see delegates’ eligibility.

  2. Collaborate to ensure delegates complete the KYC/KYB process and perform the necessary follow-up.

  3. Monitor and evaluate the overall performance and activity of each delegate.

  4. Review delegate comments in the forum and filter out spam messages.

  5. Support delegates with any questions or concerns related to the incentive program.

  6. Collect feedback from delegates and the community to improve the program.

  7. Analyze the progress of the program and if necessary implement modifications, adjustment and improvements.

  8. Communicate any changes in the incentive program to the delegates

  9. Publish monthly results in the forum.

  10. Publish monthly results about each delegate’s feedback performance.

  11. Publish monthly program costs in the forum.

Deliverables

  • Monthly results of the program.

  • Public cost reports to allow for audits by any interested party.

  • Final evaluation reports of the program.

Additionals

  • Constantly work on improvements to the program.

Self-exclusion from receiving rewards for transparency and conflict of interests

As SEEDGov is proposing to act as Program Managers, and although we will not receive any payment for this role, our responsibilities include evaluating delegates’ performance, which impacts their rewards. This creates a conflict of interest if we assess ourselves. To ensure transparency, we will continue as ParaSwap delegates but exclude ourselves from receiving rewards and participating in the ParaSwap Delegate Incentives Program. However, if another entity takes over the Program Manager role in the future, eliminating the conflict, we would apply and begin receiving rewards as we meet the eligibility criteria.

Final Evaluation

Prior to the 6 month due date, results and impact of the program will be presented in order for the DAO to assess it’s renewal, deprecation or modification.

If the DAO decides to continue with the program, we suggest evaluating the incorporation of services provided such as Karma, to automate the tracking of delegate participation metrics.

KPIs

  • Achieve an average Total Participation (TP) of 80% among participants in the program within six months.

  • Convene more people and organisations to become ParaSwap delegates to broaden the quality of debate, plurality of voices and offer tokenholders more delegates to delegate their VP according to their vision and expected quality of participation.

  • Introduce improvements to the program after six months.

Next steps

  • Proposal discussion and feedback

  • Snapshot vote - if approved:

  • Application period - 7 days: Although any delegate willing to participate in the DAO may present itself freely in the forum, to the ends of this DIP Cycle 1 only delegates who meet the participation requirements and apply within the 7 day period will be considered. Delegates who do not meet the participation requirements and/or present themselves after such period may apply for a second round if the continuity of the program is approved.

  • ParaSwap Delegate Incentives Program Start: March 1, 2025.

  • Re-opening of application for delegates who meet the participation requirements at that time (until the maximum number of 15 delegates has been filled): First days of June 2015.

  • ParaSwap Delegate Incentives Program End: August 31, 2025.

  • Metrics monitoring timeframe: 6 months.

  • Final impact report: 15 days prior the Program End.

Means

This proposal does not requires to come to life any additional ParaSwap or external product o development

Implementation Overview

We do not foresee any potential negative outcome of the present proposal and it is not expected for the DAO to derive any associated implementation action. The duration of the proposal will be of 6 months since it’s approval.

The DAO is requested that the team currently in charge of Governance Facilitation collaborate with SEEDGov and takes responsibility for tracking the participation metrics of the delegates involved in this program.

Time of Implementation

The maximum total duration of the program is 6 months, and the DAO may cancel it at any time before the expiry of this period.

The reports to be delivered, their content and KPIs have been detailed in the sections ‘Responsibilities & Deliverables’, ‘Final Evaluation’ and ‘KPIs’ above, we therefore remit to them.

Budget

The proposal requires a maximum budget of 180,000 USD in PSP tokens - or in the future new token it may eventually migrate to in accordance with Project Miro - for a 6-month period (up to 2,500 USD per each of the current 9 eligible delegates per month during the first 3 months of the program - up to 67,500 USD - and for the 15 eligible delegates per month during the last 3 months of the program - up to 112,500 USD -), with monthly maximum per delegate of 2,500 USD in Incentives.

*USD costs are fixed, meaning that if the price of PSP increases, the USD costs will remain the same.

The GovCo @paraswap-govco will be responsible for approving and executing the corresponding transfers to each delegate on a monthly basis, according to the monthly report to be published on the forum by the Program Manager.

Risk Assessment

We do not understand that the proposal has cons, and the pros and positive impact on the rest of the community, the ecosystem and the protocol, as indicated, are:

  • Encourage active participation in ParaSwap governance and professionalize the role of the involved delegates.

  • Seek to strengthen the quality of governance through compensated professional delegates who can dedicate their time to the DAO,

  • Seek to increase both the quantity and quality of participation and enhance diversity of voices,

  • Allowed token holders who are unable or unwilling to actively participate in governance to delegate their voting power to active delegates aligned with their vision, promoting a more balanced distribution of voting power.

In the worst case scenario, if these objectives are not achieved, the DAO will maintain its participation status without significant change.

This proposal does not modify any code of the protocol, so no audits are required.

6 Likes
3

I’d like to express my support for this proposal and the governance improvements it brings to ParaSwap. Having served as a Delegate during the trial period, I’ve seen firsthand how thoughtful discussions and transparent feedback elevate decision-making and grow community engagement. Initiatives like these not only encourage broader involvement (myself included) but also boost accountability and transparency, two vital elements for strengthening ParaSwap under Project Miro.

While rewards may be lower than in some DeFi contexts, i feel this framework suits ParaSwap’s needs and the effort required so far. Balancing incentives with budget discipline is always tough and I believe this proposal finds a sweet spot, recognising the time and analysis delegates invest, without overcommitting resources.Overall I see this as a step toward a more robust, well-informed governance structure.

As always I remain fully available for any questions about my decisions as Delegate and I look forward to seeing the positive impact of these improvements on ParaSwap.

Huge kudos to @SEEDGov for championing these proposals and showing how a proposal looks through the changes of PIP-57 :clap:

3 Likes
4

I appreciate @SEEDGov for this well-written and well-structured proposal. I fully support it and would like to share some thoughts.

A similar framework for compensating active delegates has been successfully operating in the Arbitrum DAO for a couple of months now, introduced by @SEEDGov. Compared to other incentive frameworks in DAOs, I believe this one is the best. Their experience in managing incentive programs further strengthens its resistance to Sybil attacks and system manipulation. Essentially, it rewards quality over quantity and, after each cycle, incentivizes delegates to contribute at higher quality levels.

Regarding the lower amount of incentives compared to other DAOs, I would like to highlight the following points:

  • The amount of time and effort each delegate needs to dedicate to Paraswap DAO is not the same as in other mentioned DAOs at this point.
  • Most delegates have not made any particular effort to gain governance power (for now).

Therefore, the proposed amount is fair and helps maintain a healthy treasury.

2 Likes
5

Thanks to the @SEEDGov team for leading the delegate trial program which showed success. The incentive program is a natural progression based on the success of the previous program to keep delegates motivated.

While I generally agree with the suggested framework for the incentive program, it seems a bit unfair that delegates who did not have VP from the start of the trial run will only be able to join 3 months into the start of the incentive program through no particular fault of their own. While others who received VP on time are able to leverage this opportunity and be included in the program. For the next intake planned in June, delegates who did not receive VP on time will only be able to fulfill the VP requirement if there are atleast 5 more votes. Both parameters, i.e. date of token delegation and number of votes occurring within a given timeline are outside the control of delegates.

Since the suggested program has already made exceptions for delegates who have not posted rationale on time, I’d like to urge the team to also offer exceptions to delegates who have no control over the specific parameters of the eligibility criteria.

1 Like
6

We think the ParaSwap Delegate Incentives Program proposal is an excellent initiative—it’s great to see efforts being made to strengthen ParaSwap governance. Having participated in similar programs like the one from Arbitrum, we truly see the potential for this approach. We also believe that robust governance data tracking and analytics are essential to boost activity, transparency, and deepen community involvement.

We’ve been discussing with several delegates the idea of developing a governance analytics tool that provides actionable insights and empowers our ParaSwap community. We’ve taken some time to dive deeper into research to ensure that this tool is as useful as possible for the ParaSwap DAO. We believe we could really support what you’re aiming to achieve, and we’re keen to tailoring the tool specifically for the ParaSwap DIP.

We’d love to hear your thoughts and ideas on how we can further support this initiative.

3 Likes
7

I’ve had the pleasure to see some of the work @Curia did for Optimism governance and analytics applied there, would be nice to see how overall it can help Paraswap. Hope @SEEDGov x @Curia chat is in the making for better alignament on a proposition to best streamline both efforts :rocket: LFG frens

2 Likes
8

Thanks for your proposal!

I believe it is a good step to promote the entrance of new delegates that could enhance the discussion within the DAO and lend their expertise to improve all things related to the DAO/protocol.

I generally agree with the parameters set, as we have the possibility to iterate them as the program evolves.

2 Likes
9

Hi @jengajojo_daoplomats!

Just to clarify, we do not propose to measure the VP requirement since the trial program started 3 months ago, it would be unfair as you say, we propose to take it into account as a requirement at the moment of applying for this DIP.

3 Likes
10

Thank you @SEEDGov for all your work around the proposed delegate program. Also appreciate you putting yourself forward for the Program Manager role. Overall in support of this, however:

As of now, the stated annual costs of this program amounts to just over 10% of the main multisig, which sounds like a lot. While this multisig is not the entire treasury, it’s basically 80% of it.

While we are looking into ways for the DAO to generate some additional revenue off of its idle treasury assets to help cover some of this cost, and with grants program and other things in the pipeline, we may want to revise the rewards down slightly for this first cycle by say $500 per tier, so 2.5k instead of 3k at the higher end. Assuming my chatgpt-assisted calculations are correct, this would roughly reduce the cost of the program by $90k per year.

Thoughts?

1 Like
11

Thanks for the clarification @SEEDGov There need to be 5 more votes between now and when this DIP application goes live in order for the two delegates who received late VP to have over 80% VP. Do you think this is possible? If not, are there any contingencies planned?

12

Hi Avantgarde!

We truly appreciate your contribution, especially the analysis of the DAO treasury and the potential impact of the DIP.

We highlight that, despite the time that has passed, no delegate or DAO member has opposed or refuted your argument, which we interpret as implicit acceptance or support due to the lack of objections.

Therefore, we will take your feedback into account and edit to incorporate it into the proposal, recognizing that one of the DAO’s key priorities must be to ensure the health and sustainability of its treasury.

Additionally, echoing @Mehdi’s point, while the proposed compensation may seem lower compared to other DAOs, the level of dedication and time commitment required from ParaSwapDAO delegates is also significantly lower for the moment. Therefore, we believe that the ratio between time, effort, and reward remains more than fair and reasonable, even considering the adjustment proposed by Avantgarde.

Therefore at the beginning of the program, the compensation tiers will be:

And as we mentioned, the program will be iterated as it progresses so that future modifications can be incorporated if there are changes that merit it, including in the amounts of compensation.

Hi!
Applications are expected to open in early March, and given the current state of the DAO, we understand that it is difficult to have this number of votes between now and then. For such situations of delegates who do not currently meet the minimum accessibility requirements - which are not new to this proposal, they were included at the start of the trial program approved in December -, we propose to re-open the application in June, so that delegates who meet the requirements at that time can apply and participate, without having to wait for a second cycle in 6 months’ time.

2 Likes
13

Given the 7-day debate period for this proposal and the acceptance we have received, we communicate that, in accordance with the new PIP Lifecycle recently approved, we are ending the debate stage and initiating the 2-day frozen period. After this period we will submit the proposal to snapshot.
Thank you all.

3 Likes
14

DIP proposal was submitted to Snapshot!

https://snapshot.box/#/s:paraswap-dao.eth/proposal/0x3bf3260cb1bac1bccdf9752373ec1971297baa3a9ad7bfc4f974fcc3900b469f

3 Likes
15

Thanks to the @SEEDGov team for stewarding this process and we are excited for it to hopefully kick off. We agree with @Avantgarde’s comments above and believe this edited budget and structure makes sense for the first trial cycle. Additionally, the cap at 10 delegates for now makes sense as we can always expand if needed, but the vice versa is much harder.

3 Likes
16

We’re huge fans of @SEEDGov’s DIP and fully support this proposal. We believe Seedgov’s initiative will professionalize governance, boost participation, and enhance transparency within the DAO, and we’re eager to contribute to its success.

1 Like