PSP-IPΔ6: Defining governance process and parameters

[tokenbrice]

Hello swappers,

Welcome to this new research section, where we explore potential improvement to the ParaSwap product or governance model. I’ll try to share comprehensive threads on key topics to get the conversation progressively started, yet feel free to start another topic too if you think a specific dimension of the product or governance model should be researched and discussed.

Overview

On top of the ParaSwap Improvement Proposal Framework - now tentatively established, we need to agree on the overall governance process and workflow.

More specifically:
Signaling - we already use Snapshot to vote on proposals, but we could use it to signal too or even for smaller-vote related to parameters fine-tuning.

Proposal Requirement - currently there are none, should we set a minimum bar of PSP to be able to submit a proposal on Snapshot?

defining standards regarding minimal turnout, majority rules, minimal duration, and other features of the decision process - such parameters may change depending on the nature of the proposal (signaling, executable, constitutional) (copying straight from @philh here who is spot on!)

Main governance parameters list

• Minimal PSP voting power required to submit proposals
• Standard proposal vote time
• Standard proposal implementation delay ( can be proposal-specific)
• Quorum: how many PSP votes are needed at least for a vote to be valid?

Keep in mind that the base parameters above could have different values depending on the type of the proposal - if we deem it necessary to differentiate between several types.

And finally, once we agree on the process we’ll need to document it of course, as usual.

Up to you now!

This is a research topic: the goal is to hear your thoughts, your fears, share about other models you think are inspirational for this discussion, etc.

Think wide and wild: this topic is here to explore and pave the way on the matter. The goal will be of course to articulate the results of this research into a PSP-IP, but there’s no rush!

[philh]

Thank you for that @tokenbrice!

Quick comment to get the ball rolling:

Minimal PSP voting power required to submit proposals

As a (very) basic spam protection and in order to legitimate proposals with skin in the game, I’m in favor of requiring a minimal amount of PSP to submit a proposal. On the other hand, we’ve witnessed how very large holders do capture governance of other protocols. Being the master of the agenda is a critical power, in traditional parliamentary politics as in DAOs!

I’d suggest going with 75,000 PSP for a start - if we can have delegation working. It’s 10 times the average airdrop allocation. It means that the party submitting a proposal is either committing a significant amount of resources in ParaSwap or got the support of a dozen of airdropped non-dumpers. I’m flying by the seat of my pants here, so if someone has a sounder approach, speak out!

Standard proposal vote time

There’s a social norm around not rushing proposals, which means that people should be able to check active votes over the weekend, or on the contrary to have a chance to check them while not being away on a weekend.

I’d say 3 to 5 days is great. AFAIK there’s no way to enforce the ‘weekend rule’ with snapshot (unless someone implements a custom rule), but it should be fine as a ‘soft’ rule.

Standard proposal implementation delay

Requesting clarification: are you talking about a ‘soft’ delay, giving time to multisig signers to execute a decision, or about a block-time delay, a cool-down period to let holders exiting or governance attacks being vetoed?

Quorum: how many PSP votes are needed at least for a vote to be valid?

Intuitively, I’d say 3% of the available supply. Token turnout isn’t great in DAOs, since tokens are bought and used for many other purposes than governance. We can raise this threshold once we’re comfortable with the actual turnout.

For context, Radicle recently failed to pass a proposal because they missed the 4% minimal threshold. They are considering lowering it. ENS has a 1% threshold. Both % are based on the total supply, which explains the issue at Radicle (50% of the supply is locked in the DAO and the team’s tokens are vested). I think it’s better to be cautious, start with a low minimal turnout based on the supply available for voting (including staked PSP!) and not the total supply, and use delegation. It should be safe.

[disiaque.eth]

Hi everyone!

I’ve been carefully reading your exchanges and am delighted to see these ideas in what was just a “quick comment”. Let me also respond in a tiny form ( that’s a lie, don’t believe me).

On the governance process

I think the signaling Tokenbrice is talking about should be done on the Discord. It is the best place of discussion where ideas should be born as close as possible to the community. If I summarize it, we would have the following organization:

1. Discord. Birth of the idea and first signalling.
2. Forum. Work space and argued discussions.
3. Snapshot. Vote.

I finally think that having two functions (signaling and voting) on the same tool (Snapshot) will be confusing.

On the parameters of governance

Minimal PSP voting power required to submit proposals: I agree with the concept, but I find the proposed amount much too high. 75,000 PSP is a considerable volume, already today, and even more in the coming months. I think that any member who has received the airdrop and has keep it should have the ability to create a proposal. That is a minimum amount of 5,200 PSP. I specify: I believe that an individual without any delegation can create a relevant proposal. This is my utopian bias that we can discuss, of course…

Standard proposal voting time: I agree with the idea of a longer voting time. I recently missed a vote that was spread out over three days! 5 days is a good compromise.

Standard proposal implementation delay. I think TokenBrice was talking about the delay that is given to the developers to implement the proposal, the “deadline” in short. I think this parameter should be specific to each proposal.

Quorum: I also agree with @philh’s feedback. 3% is a good starting point, we can even lower it to 2% if needed.

[philh]

Cool stuff @disiaque.eth, thank you!

I think the signaling Tokenbrice is talking about should be done on the Discord

I get your point, but I still have a preference for Discourse. It’s super hard to go back in time on Discord, whereas finding this information on Discourse is super easy. We can have a sub-category for “Temperature check” dedicated to candidate proposals. And it gives a chance to people to go through pro and con arguments about the proposal, which is hardly done on Discord.
Not a big deal for me anyway

I finally think that having two functions (signaling and voting) on the same tool (Snapshot) will be confusing.

Technically, even Snapshot votes are signaling unless you have Gnosis Reality in place to make them enforceable

Granted, it’s not your point though. Maybe it would help to have a more precise idea of the type of signaling thing @tokenbrice has in mind.

That is a minimum amount of 5,200 PSP (minimal PSP for submitting proposals)

No strong opinion here. I like that people are able on onboard others on proposals, but it might be useless friction. Plus in case of a snapshot spamming attack, there’s always the possibility to delete rogue votes (might be different in the future though, Snapshot is getting decentralized).

I think this parameter should be specific to each proposal (Standard proposal implementation delay)

[starny]

• Minimum PSP voting power required to submit proposals

I am not competent enough to come up with a number that is both reasonable and not stupid but I will add ONE conditions: at least the minimum received by the airdrop because I find it logical

• Standard voting time for proposals

I think 3 to 7 days is the strict minimum and maximum

• Standard proposal implementation timeframe (: disclaimer: may be proposal specific)

from 1 day to 1 month (depending on demand of course) is the strict minimum and maximum

• Quorum: How many PSP votes are needed at least for a vote to be valid?

I am not competent enough to come up with a number that is both reasonable and not stupid but I sincerely think that it would be good to do a percentage of the circulating supply

[dseeker]

All the contributions so far has been meaningful and well articulated.

I do agree with a minimum PSP requirement of 5200psp for proposal submission being the minimum amount airdropped. Anyone who received airdrop, hodled and even find time to participate in the DAO have proven themselves to be as dedicated as people who have hundreds of thousands of PSP. The only difference is the financial capabilities of individuals.

I do not have informed opinion about the ideal minimum requirement for quorum but, a certain percentage of circulating supply or total supply is logical. Going by a percentage of circulating supply imply a dynamic minimum requirements since the circulating supply is expected to increase with time.

Going by a percentage of the total supply on the contrary could be definitive.

So much has been said already about voting duration. I want to go by 5 days duration. The duration is enough for anyone who might want to read up or research more on a proposal before voting. In that time frame, I believe anyone should be able to spare a few mins to vote.

As a closing remark, should there be a limit to amount of proposal a member can submit at certain interval, say per epoch?

[0xfika]

Hi all,

Love to see the exchanges on this topic of structuring our governance! Below are my two cents;

Signaling

I think if we use snapshot for signaling too, we should identify and make it clear for anyone who votes that it is a “Sig-Prop” and voting for this does not mean that it would be implemented. This would result in two type of proposals posted in snapshot; “Sig-Prop” & “Core-Prop”. Once signaling proposal is passed, it can then move on to become a core proposal.

I personally don’t see a need to do signaling on snapshot at this stage of the DAO. We can do this on discord with specific channels names for the idea or better the forum for more structured discussions.

Minimal PSP voting power required to submit proposals

5200 PSP seems low at first sight but it has a good reference coming from minimum airdrop amount

Standard proposal vote time

5 day is ideal time as far as I can see from the other DAO’s as well.

Standard proposal implementation delay

I think this really depends on the nature of the proposal and should be specific to each one. We should not time cap and risk potentially unsafe implementation.

Quorum: How many PSP votes are needed at least for a vote to be valid?

I don’t have a strong opinion on this but in principal agree that it should be a percentage amount of the circulating supply and not the total supply.

[starny]

it seems that people like my idea

about % of circulating supply for quorum
and proposal at least what we receive from airdrop

[disiaque.eth]

Heya swappers!

We are currently waiting for the CoinGecko update to know the exact circulating supply of $PSP. The idead is to set the governance parameters in an informed way! In any case, you will find below a first draft for this proposal. What do you think ?

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1. Proposal Number & Name

PSP-IPΔ6: Defining governance process and parameters

2. Keywords

PSP governance parameters

3. Simple Summary

This proposal aims to establish the main parameters of PSP governance that can be adjusted later by the DAO.

4. Context

Establishing the parameters of governance is a crucial step in the life of a DAO. It is now time to make the different steps of the governance explicit through parameters and detailed documentation.

5. Goals

The governance of Paraswap is organized around several tools in order to structure discusions and signaling the most important points. The genesis of a proposal generally follows these steps :

1. Discord. Informal brainstorming and debate to explore interesting topics.
2. Forum. Reasoned and discussions to come up with a redacted proposal. That is to say refining of an idea before a final vote.
3. Snapshot. Voting on finalised proposals within the governance parameters.

This proposal establishes four governance parameters with the following function:

• Minimal PSP. What is voting power required to submit proposals? The default value is set to “5400 PSP” which correspond to the first third of the initial airdrop.
• Voting time. What is the standard duration of a vote? The default value is set to “5 days” to allow sufficient time for members to vote.
• Quorum. How many PSP votes are needed at least for a vote to be valid? The default value is set to “3% of circulating supply” in order to prevent blocking situations.
• Implementation delay. What is the standard delay for implementation? This parameter is specific to each proposal.

6. Means

This proposal does not require financial resources.

7. Metrics

The DAO will ensure that voting participation rates are monitored regularly. If necessary, it will update the governance parameters.

8. Forward-thinking considerations

• The first PSP-IP have been made by experienced members who are obviously familiar with DAO mechanisms. The next step will undoubtedly be to onboard beginning members who wish to become more competent in these matters. This could take the form of a “sandbox session” in the discord for writing proposals.

9. Implementation Overview

• The four governance parameters should be added to Snapshot as soon as possible. Their values will be set as defaults.
• The governance scribes will encourage DAO members to use the forum for proposal development.
• A dedicated page of the documentation will be written by “Content producers” to explain the choice of parameters.

10. Voting options

• “For”
• “Against”
• “Abstain”

[starny]

thats perfect according to me
thank you for your work

[philh]

I would vote for that
Well done

[Albist]

Ok for me.
You put 5400 PSP as first tier Airdrop, it seems that it was 5200 if I’m not mistaken.
Anyway it’s fine by me, the important thing in my opinion is to secure that all PSP holders are able to vote whereas they are simple holder, staker or LP.
Thanks for your work @disiaque.eth !

[rusty]

I’d like to suggest a 5th Governance Parameter to help with Quorum when the single vote multiple choice option comes into play (i.e options are not simply “For” or “Against” but are actually 3 unique choices).

Looking at the Which chain should PSP launch on ? snapshot, while in jest and fun, over 50% of the votes did not get what they wanted:

Binance Smar…3.27m PSP 49.48%
Avalanche1.99m PSP 30.1%
Polygon1.35m PSP 20.42%

Now imagine the same percentage distrubtion results as above but inserted into proposal that has a low-mid-high choice range such as PSP-IPΔ1: Extend PSP staking lockup period

7 days lockup 30.1%
14+Δ days lockup 49.48%
No change 20.42%

Just over 50% want 7 days “or less” but 14+ days would win this vote. Worse case scenario you could have up to 66% of votes not getting what they want:

7 days lockup 33%
14+Δ days lockup 34%
No change 33%

Do you believe in this scenario 14+ days would be in the interest of the DAO?

To prevent such discorse and leave no room for interpretation, I am suggesting adding minimum % in order to win. This minimum is up for discussion but can be anywhere from 50-65% (leaving proposals with “For”/“Against” votes unaffected).

[Albist]

Hey mate,
I’m not sure if your example is correct in this case because those who wanted to extend to 7 days did not necessarily want to keep the 2 days of basic unlock. And on the other hand, those who wanted to keep the 2 days may not have wanted the 7 days nor the 14 days of lock up.
So I don’t see how we can group them together to compare with the solution with the most votes. Each choice, 7, 14 or no change had its own interest.

I’m not saying it might not be a problem in other cases but maybe not in this one.
If the case happen, maybe we would need a vote in two rounds to really give people a choice, but that seems a bit heavy for the DAO, no?

[Tenzent]

Albist brings a great point, fixed options for parameters like this are not a great way to define terms and should be done in a more dynamic way. Personally I think we could take note from how 1Inch defines many of their own parameters through their “Instant Governance”

[disiaque.eth]

Hey guys!

I’m coming back to this topic to move forward on governance votes! I find the idea of dynamic governance parameters very interesting, but I fear that the development time will be much longer for the team. There are so many topics in progress that we should surely keep it simple, at first.

What do you think about keeping these last ideas in mind and moving forward? To the vote, I mean. We will have time to iterate and improve the governance process.

[Albist]

Ok for me to move on.

[Tenzent]

All good with me to put to a vote.

[AkeGPrince]

Very good work, I guess it is time to move on and vote

[rusty]

Move forward and put it to vote!