Proposal Discussion: Governance Framework

Greetings DinoForce,

Below is an example Governance Framework that is put to you for feedback and discussion. It is not final, but indicative of SingularityDAO’s line of thought on this topic. Please use this forum to discuss and assist in the optimisation of such a framework before it is put to a vote for implementation.

SIP-0┃SingularityDAO Governance Framework Proposal

Key words:

Governance structure, Proposal types


SingularityDAO proposes to create a governance framework for SDAO governance, in order to have qualitative discussions on the governance forum.

Proposal rationale:

This post aims to define a framework for SingularityDAO governance, by defining several types of proposals depending on the subject discussed, voting on DAO rules, and creating templates that should be helpful for everyone wanting to participate.

Posting a proposal on the governance forum and discussing it there and on discord first allow to get a sentiment check and some valuable feedback about the community ideas and upcoming snapshot votes.

I) Required informations for any proposal:

Governance forum post:

Each proposal should be posted on the SingularityDAO Forum for at least 48 hours before posting the snapshot, which allows the community to give some feedback, propose changes, and vote on a community sentiment poll.

Proposal type, number and name:

Each proposal must be easily identifiable and correctly classified.

  • Type: SIR - SGP - SIP. This will be detailed in the second part of the proposal
  • Name: The name must be the same on the forum post and snapshot
  • Number: Each proposal must have a number that represents the post order on the forum and on snapshot

Summary: Short description of the proposal (1-2 sentences max)

Rationale: Detailed explanation of the proposal and milestones for its execution.

Means: Resources needed for this proposal

  • Human resources: Special skills required (dev or others)
  • Treasury resources: Proposal cost (in SDAO and in $), % of the treasury required

Technical implementation: Highlight the technical implementations of this proposal if any.

Voting options: Mention the options that will be included on the snapshot vote, including “Abstain”.

II) Proposals types and formats:

Inspired by the APWine framework with different sections, different types of proposals would be defined depending on the subject discussed and the importance for the protocol.

SingularityDAO Integration Request (SIR):

Proposal to integrate SingularityDAO with other protocols, such as adding new tokens to vaults or allowing new projects on the launchpad.

Project Presentation: (After summary)

  • Protocol name
  • Token requested
  • Token contract address
  • Audit(s) links
  • Chain requested: Ethereum/Polygon/Binance Smart Chain
  • Relation with the project
  • Twitter/Discord/Telegram links

Token metrics: (After project presentation)

Risk assessment:

  • Smart Contract risk: maturity, transactions
  • Counterparty risk: holders, permission
  • Market Risk: market cap, average volume, normalized volatility
  • Use the Aave methodology: Introduction - Risk 2
  • Community size on Twitter/Discord/Telegram

Community sentiment poll: (After voting options)

  • A poll on the governance forum post to get a first sentiment at least 48 hours before submitting a snapshot proposal

Considering that the integrations proposals can happen quite often, and that the risk for the protocol is lower than other proposal types, the following parameters would be considered:

  • Admin: Team multisig required to initiate the vote
  • Quorum: 1% of the total supply (1,000,000 SDAO)
  • Voting duration: 3 days

SingularityDAO Governance Proposal (SGP):

SGPs are about common governance proposals, especially the ones related to the treasury of the protocol and the DAO organization.

This type of proposal should include, in addition to all the points mentioned in the first part:

Context: (After summary)

Comprehensive overview of the proposal, treasury breakdown if needed.

The SGPs could concern but wouldn’t be limited to:

  • Grant program if any
  • Contributors/Dao committees (if applicable) rewards
  • Long term partnerships

SGPs concern the protocol treasury directly, which is why it might be best to define more conservative parameters than SIR ones:

  • Admin: Team multisig required to initiate the vote
  • Quorum: 5% of the total supply (5,000,000 SDAO)
  • Voting duration: 5 days

SingularityDAO Improvement Protocol (SIP):

SIPs are about the most important modifications either on the governance framework, or on the protocol directly.

This type of proposal should include, in addition to all the points mentioned in the first part:

Context: What’s the modification and why it’s needed.

SIPs would concern but wouldn’t be limited to:

  • New version of the protocol
  • Modification of a smart contract
  • Updates on the initial parameters
  • Modification of the governance framework

SIPs are the most critical and important types of proposals, as it’s directly about the core product of SingularityDAO or a major change in the functioning of governance.

It’s very important to get as much community members aware of this kind of proposal for them to vote accordingly, which is why more conservative parameters, and a longer voting period should be considered:

  • Admin: Team multisig required to initiate the vote
  • Quorum: 10% of the total supply (10,000,000 SDAO)
  • Voting duration: 7 days

Voting Options:

  • Accept the governance framework
  • Rework the proposal
  • Abstain
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One of many —if not— the biggest mental barrier to drafting proposals is getting past a blank canvas. The proposed framework provides sufficient guidelines to DAO members, not only to keep the Forum clean but also to get the juices flowing and create a dialogue within their heads about how their proposals will come together.

I’m overall satisfied with the proposed framework. Nonetheless, the following is something of a hodgepodge of ideas/recommendations regarding timelines and governance mechanisms with far-reaching implications.

[1] Feedback period

Increasing the duration between posting the proposal on the Forum and submitting the snapshot proposal from the proposed 48h to at least 72h to [1] ensure only serious proposals are submitted for the health of the community, [2] ensure every proposal receives enough scrutiny and analysis, and [3] improve the accuracy of community sentiment analysis.

[2] SIP’s “Rework the proposal” voting option

While the proposed framework takes inspiration from already-functioning governing systems, it comes with a modified proposal structure, notably in terms of voting options. For example, it leaves it up to the proposers of SIR and SGP proposals to pick the options that will reflect approval or rejection.

On the other hand, the SIP voting options have been limited to casting “Yes” [accept the governance framework], “Abstain”, and “Rework the proposal” votes. The last of these options is offered with no indications of what it entails in terms of the revision process, timeline [deadline to publish the revised version, new voting duration…], snapshot [use the same snapshot for the second vote or take a new one], etc. Specifying these parameters from the get-go helps coordinate actions and facilitates planning.

[3] Token-based quorum voting and the integrity of the community DAO

The thresholds of voters being considered per proposal type are 1%, 5% and 10% of the total supply, respectively, for SIR, SGP and SIP proposals. While this token-based quorum voting mechanism is battle tested and currently employed by several projects [See Eric Arsenault’s piece on voting options in DAOs], it presents potential security and integrity threats to the governance system itself.

One such scenario, particularly relevant to our ecosystem, involves some DAO members not only abstaining from voting but also wholly disengaged from the voting process, as shown in the voting records of past proposals. This can presumably be explained by speculative motives to hold $SDAO: benefit from the appreciation of the token but not directly participate in the decision-making. Over time, this can lead to groups of the most active voters conspiring to push their agenda and create cases of vote subversion.

Although each holder is financially invested, not everyone will be interested in placing votes or submitting proposals to vote on. It should be acknowledged that SingularityDAO has already taken the necessary measures to face this issue by setting certain requirements for “token holders” to become “DAO members” [locking a minimum amount of $SDAO and holding a minimum amount of SERP] and offering incentives to active DAO members. While future enhancements to the DAO participation structure may include the implementation of a variant of SingularityNET’s proof-of-reputation consensus to dictate activity rates as a benchmark for passing proposals and eventually stop coordinated attacks, a more urgent measure would be adopting the governance principle of “participation with equity” [1 token = 1 vote, with a certain maximum limit to avoid whales and centralization] to empower collectivism with responsibility, avoid scenarios where decisions tend to favor an already powerful minority, and reduce the risk of ego-centered voting behavior that, e.g., has been observed in the R1 voting of the Deep Funding initiative. This opens the door to more in-depth discussions on, e.g., the metrics that decide voting power per proposal type, but these are beyond the scope of this short piece.

From an implementation perspective, the proposed voting mechanism stipulates that failure to reach the quorum threshold results in proposal rejection. In the scenario where a proposal acquires enough feedback via social channels to ensure a positive outcome yet fails to reach the quorum threshold, the proposal is still rejected. It is the tragedy of many existing DAO structures, and, to my knowledge, there is currently no way to prevent such cases without defeating the integrity of the voting process. Instead, it is feasible to create situations where minimum participation is not required, specifically for proposals judged favorably by heavily invested [both monetary and ideologically] groups of individuals in the future of SingularityDAO and detect —not to say exclude— groups of individuals who follow the same voting patterns across multiple proposals. Practically, the DAO can set a minimum number of 3 worthy proposals [e.g., the proposals with the highest yes votes] that failed to reach the quorum threshold to be put into vote with a less conservative quorum threshold. The prioritization of these proposals can be handled by a separate advisory-only community-governed entity [perhaps similar to the one suggested in SingularityNET’s Q4 operations update] which would determine the earnestness and significance of each rejected proposal.

The bottom line is, awaiting testing, the proposed token-based quorum voting appears to be the most suitable mechanism at this stage of the DAO lifecycle, but there are certain subversion, integrity and manipulation issues to which SingularityDAO needs to stay alert.

The Vision for SDAO is “an ecosystem where anybody can safely and easily manage crypto assets”.

I reason that any successful Governance Framework must implement and support that Vision. Recently I learned about the “Beanstalk” cryptocurrency scam ( Beanstalk cryptocurrency loses $182m of reserves in flash ‘attack’ | Cryptocurrencies | The Guardian ) - how a “decentralised credit based stablecoin protocol” with a promising Use Case was undone in 10 seconds, during which a flash loan gained one User sufficient voting rights to transfer away the entire treasury.

For any Governance Framework to engender trust, encourage the most beneficial participation and be sustainable, I suggest that the Success Factors (SF) for SDAO (or any other) are defined, refined and agreed, that they are used as part of the assessment of any Governance Solutions proposed and become part of the framework itself.

A proposal for generic (DA) Success Factors has been made at Ultimate Beneficial Decentralization - Suggest a Project - SingularityNET. I summarize each point below without any detailed analysis of the proposal rationale for SDAO for now… What do you think of the potential?

1- Information is freely available as required

2- Free and fair access to the Information is available to all

3- Every Individual has unique and trusted identification

4- Governance will provide a process to assess potential Value

5- Value is associated with all (contributing) Individuals

6- Value will reward the originating Individuals in proportion

7- Other contributors can be associated with the development of Value

8- Value will reward the contributing Individuals in proportion

9- Governance will optimize Resource allocation and access

10- Governance will apportion Resources and Rewards in proportion to Value

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