PSP-IPΔ12: Opening up governance proposals

As discussed on the last community call, in order to make the DAO governance process more decentralized, I propose to open up proposals to any community member that meets a threshold of PSP balance, whether it’s through holding, staking, or LP; directly, or through delegation.

1. Keywords

DAO, governance, decentralization

2. Simple Summary

I propose a threshold of 5M PSP, which will be similar to Uniswap’s [2.5M UNI] (0.25% of the total supply)(https://www.fish.vote/proposal/0xA13a5a31b891F3DA7074b740B694769BD0f1bb23). It’s achievable through delegation if the delegate can show the ability to push quality proposals as well as attract the community’s trust. If they fail to do so, any PSP holder can vote against by overriding with their vote and un-delegate their voting power.

Although I don’t think 5M PSP is too high, but since the DAO is still young, 2.5M may also be acceptable as a starting point, we can adjust a few weeks/months down the road.

I think the key to success is a high engagement between the delegates & the community. This should be based on results and communication. To address the latter, we can open a Discord group and a governance forum topic where delegates can present themselves and convince the community of their ability to deliver on their expectations.

3. Goals

More open and decentralized governance.

4. Means

No budget is needed.

5. Metrics

The quality of proposals made by delegates.

6. Forward-thinking considerations

We should track the increase of delegates as well as the quality of proposals.

7. Voting options

  • Yes for 5M PSP
  • Yes for 2.5M PSP
  • Against
  • Abstain

Pre-vote

  • Yes for 5M PSP
  • Yes for 2.5M PSP
  • Against
  • Abstain

0 voters

Let’s open that discussion and see what you guys think.

2 Likes

Here it is : ParaSwap Delegates Introductions

1 Like

Hi Mounir!

Thank you for this first draft: the opening of governance is an important topic for the success of the DAO. And I share the general idea that is raised here!

Maybe we can start by summarizing the current situation so that all members can understand the topic. Currently, only people who have been manually added can post a proposal on Snapshot. This was necessary at the beginning of the governance to avoid proposals that could not be implemented.

The general idea of this proposal is to open the right to post a proposal to any member as long as they have a certain amount of voting powers. This topic has already started to be discussed in PSP-IP6 where DAO created a governance parameter “Minimal PSP” which was set to 5400 PSP (= first tier of the airdrop).
https://gov.paraswap.network/t/psp-ip-6-defining-governance-process-and-parameters/83/8
https://snapshot.org/#/paraswap-dao.eth/proposal/0xfd6fc020313c648f5af33966646f2c0f2119136675b28f87ba076ed6f3b5d003

The proposal presented by Mounir proposes to increase this parameter considerably to 2.5M / 5M PSP (= x500/1000). The amount is justified by the idea of creating a core DAO with the delegation system (from what I understand). From my side, I think that the amount of 2.5M is extremely high and would risk turning the DAO into a plutocracy… I’m also not sure that the example of UniSwap governance is the most appropriate one to think about ParaSwap.

The balance between inclusiveness and protection is hard to find, and all I can say for now is that I am absolutely convinced that the correct amount is somewhere between 5.4k and 2.5M! Which is not at all helpful, I agree. :sweat_smile:

Maybe it would be interesting to have an overview of the distribution of voting power per wallet to have an informed opinion on the subject. Maybe a data scientist could find this for us, or even with Dunes Analytics?

7 Likes

Well-done Mournir for the time spent in creating this proposal. I was a bit confused at first because I thought the topic was already discussed and implemented in the PSP-IP Framework proposal and the parameter was set to 5400PSP as noted by Disiaque.

First, I think the title is a bit inappropriate since this was already discussed and implemented. the title should have reflected that to display clearer intent.

Second, increasing the said parameter astronomically like that in my opinion will discourage participation from some members and will only make the process available to a very few. That is even more true since the DAO just
introduced delegation.

1 Like

Well, 5400 was the initial setup that didn’t work, we got few proposals that were either not actionable or out of scope: Retroactive airdrop, AMA with paraswap founder on discord

I don’t think that it will discourage participation, voting has no threshold, and delegation is opened already.

3 Likes

But with a 2.5M threshold, only a very small handful of individuals will be able to submit proposals. It would be enough for the big fish to join forces and then filter out the proposals that suit them.

I guess the original plan was to get people to delegate their voting power but so far there has only been one official submission of delegates and even then I doubt we’ll get enough involvement to get that number.

An idea would be to look at the average number of PSP per holder and multiply that number by 5, or 10? So for an average PSP holder you would need the support of 10 other average PSP holders. One could estimate that this is enough to have quality proposals.

Concerning the whales, one hypothesis is that if they invest so much, they are at least informed and will make relevant proposals.

2 Likes

Guys, feel free to propose what do you think should be the right numbers.

3 Likes

I feel like i am missing an important piece of the puzzle here. Do we have a minimum PSP requirement already?

So you want to Change threshold to initiate dao proposals. I don’t see the point.

How does adding a slightly higher barrier to entry open the dao up?

a proposals fate is always determined by the consensus, it doesn’t matter who raised it or how much psp they hold.

3 Likes

As far as I understand, if permissionless proposals would open with current parameters, the minimum threshold would be of 5600 PSP (from @disiaque.eth explanation above).

I don’t really know what the best solution is, as I think current DAO frameworks are quite early and immature. Ideally we’d want most proposal to go through the social layer first, be approved by a “temperature check”, then formalized, then voted.
The current system tries to achieve that using a centralized system of whitelisted people.
Opening it up to anyone having 0.125% / 0.25% of the supply doesn’t seem to be guaranteeing nor helping that this “social process” will still be followed.
It would make the governance “gameable” though, if someone manages to accumulate enough PSP to make an aggressive proposal. Unless there is a veto system / Kleros court associated with ParaSwap governance, I feel like the current system of discussing, formalizing proposals (going mostly through the social layer) would have better results, until governance structures in general mature a bit.

3 Likes