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
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Minimum Delegation 1M PSP tokens or equivalent in USD if migration to the new token takes place as a product of Project Miro.
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Have a ParaSwap forum account with a minimum age of 3 months.
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Have created a delegation platform in the Delegation section of the forum with the appropriate template.
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≥ 80% participation rate in voting from the start of the delegate trial program on Thursday, December 5th, 2024 to the present day.
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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:
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Citizen42 - 100% participation
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Jameskbh - 100% participation
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Ignas - 100% participation
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Boardroom - 100% participation
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Avantgarde - 100% participation
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PGov - 100% participation
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Mehdi - 100% participation
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Arana Digital - 100% participation
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Curia - 100% participation
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SEEDGov - 100% participation
Delegates participating in the program who have not met the minimum participation requirements are:
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0xAlex - 60% participation -did not vote on the first 2 proposals-
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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:
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WakeUp Labs
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Proof of Growth
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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:
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Minimum Delegation 1M PSP tokens or equivalent in USD if migration to the new token takes place as a product of Project Miro.
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Have a ParaSwap forum account with a minimum age of 3 months.
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Have created a delegation platform in the Delegation section of the forum with the appropriate template.
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≥ 80% participation rate in voting in the 90 days prior to the application.
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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:
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Priority will be given to the delegates who have cast the most votes in the last 9 months.
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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.
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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:
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Unpredictable reductions that would discourage delegate participation.
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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:
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Aave: Compensation: $ 5,000 in GHO per month month
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Arbitrum: Compensation: Up to $ 7,000 in ARB per month
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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)
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Lido: Compensation: Up to $ 5,000 in LDO per month
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Uniswap: Compensation: Up to $ 6,000 in UNI per month
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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:
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Incentivize quality over quantity of feedback.
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Extend the analysis across all contributions made by a delegate in the forum (instead of only considering those that reach).
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Avoid unnecessary or spam comments made solely to achieve a higher score.
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Allow delegates to focus on contributing to proposals or discussions related to their areas of expertise.
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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
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Relevance: Analyzes whether the delegate’s feedback throughout the month is relevant to the discussion.
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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.
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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.
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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.
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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.
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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…
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Presence in Discussions: This is a more quantitative analysis, intended to reflect the effort of delegates who participate in most discussions.
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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
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Activity Weight (%): Represents the weight assigned to each key activity to be measured in delegates.
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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.
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PR90% fórmula: (PR90 * 30) / 100
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Snapshot Voting (SV) - Weight 30: Percentage of delegate participation in voting in Snapshot. This parameter will reset at the beginning of each month.
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Tn: Number of total proposals sent to Snapshot for monthly voting.
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Rn: Number of proposals the delegate voted in the month.
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SV% formula: (SV(Rn) / SV(Tn)) * 30
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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.
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Tn: Total number of proposals that were submitted to a vote.
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Rn: Number of honest communication rational threads where the delegate communicated and justified their decision within 7 days after the end of each vote.
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CR% formula: (CR(Rn) / CR(Tn)) * 25
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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.
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The scoring system will use the following formula:
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Total Participation (TP): Sum of the results of activities performed by the delegate. A TP% of 100 indicates full participation.
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TP% formula: PR% + SV% + CR% + DF%
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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.
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Tier 3: TP ≥ 75% and < 85%. Compensation range: up to $ 1,500.
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Tier 2: TP ≥ 85% and < 95%. Compensation range: up to $ 2,000.
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Tier 1: TP ≥ 95%. Compensation range: up to $ 2,500.
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Parameter summary
Activity Weight (%):
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Participation Rate 90 (PR90) - Weight 30%
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Snapshot Voting (SV) - Weight 30%
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Communicating Rationale (CR) - Weight 25%
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Delegates’ Feedback (DF) - Weight 15%
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Total Participation (TP):
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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:
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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.
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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.
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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
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Check corresponding data to see delegates’ eligibility.
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Collaborate to ensure delegates complete the KYC/KYB process and perform the necessary follow-up.
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Monitor and evaluate the overall performance and activity of each delegate.
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Review delegate comments in the forum and filter out spam messages.
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Support delegates with any questions or concerns related to the incentive program.
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Collect feedback from delegates and the community to improve the program.
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Analyze the progress of the program and if necessary implement modifications, adjustment and improvements.
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Communicate any changes in the incentive program to the delegates
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Publish monthly results in the forum.
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Publish monthly results about each delegate’s feedback performance.
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Publish monthly program costs in the forum.
Deliverables
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Monthly results of the program.
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Public cost reports to allow for audits by any interested party.
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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
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Achieve an average Total Participation (TP) of 80% among participants in the program within six months.
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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.
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Introduce improvements to the program after six months.
Next steps
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Proposal discussion and feedback
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Snapshot vote - if approved:
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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.
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ParaSwap Delegate Incentives Program Start: March 1, 2025.
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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.
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ParaSwap Delegate Incentives Program End: August 31, 2025.
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Metrics monitoring timeframe: 6 months.
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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:
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Encourage active participation in ParaSwap governance and professionalize the role of the involved delegates.
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Seek to strengthen the quality of governance through compensated professional delegates who can dedicate their time to the DAO,
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Seek to increase both the quantity and quality of participation and enhance diversity of voices,
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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.