FIP-21: Optimistic Approval

FIP-21: Optimistic Approval

Status: Last Call

Author: @joey

TL;DR

  • Proposing to use “Optimistic Approval” for TribalChief incentives
  • Allows a multisig to adjust incentives, with the charter to enact the results of snapshot votes
  • Multisig will be 2 of 4, containing 3 members from the community and 1 from Fei Labs
  • The DAO or Guardian can veto during a 4 day timelock window
  • Optimistic Approval can be used in the future to create more specialized committees with more flexible decision making frameworks.

We’ve gathered data and community feedback on the DAO governance process and would like to propose modifications designed to streamline DAO governance of Fei Protocol and drive more meaningful engagement. .

The current governance process requires both a snapshot and on-chain vote of approximately the same proposal. Snapshot has historically the best turnout and most accessibility because it is:

  • Free
  • Includes staked TRIBE

Although it may feel somewhat redundant to engage in both votes, it is absolutely critical to maintain ultimate DAO control over PCV to prevent any one party from controlling the protocol. This is especially true of high security actions like changing roles or minting new FEI.

However, certain DAO actions are routine and not core to the mechanism design of the protocol such as adjusting certain protocol parameters and updating incentives in the upcoming TribalChief upgrade.

Consensus on this class of actions can be achieved with consistency and with the required transparency solely by snapshot or by specialized community-led committees. Decentralization is maintained if the broader community retains the ability to veto any in-flight action they do not approve of. This would help to reduce voting fatigue and increase the speed of execution by allowing more specialized segments of the community to flesh out and parameterize proposals before processing through Optimistic Approval.

We are proposing a new governance flow for these non-core and less-critical actions, “Optimistic Approval.” This would allow these actions to be executed by a multisig-gated by a Timelock, with the key caveat that both the DAO and the Guardian can veto these actions during the Timelock window if the admins misbehave or propose something not in favor by the broader community. This concept was first introduced by GyroStable, a yet to launch stablecoin project using a similar PCV model.

In particular, the Fei DAO can pilot this governance flow with the upcoming TribalChief change. The admins of the Optimistic Approval would be able to deploy new incentives programs and update existing ones without going through the DAO. Initially, the admins of the optimistic multisig should only propose incentives changes authorized by snapshot. Eventually, implementations of Optimistic Approval can grant more autonomy to the various admin groups that can be specialized. We also aim to make it easy for any community member to initiate a DAO vote to veto any optimistic proposal down the road.

The multisig for optimistic approval should be distinct from the Guardian, and contain mostly members from the community.

Optimistic Approval will help streamline governance and provide an opportunity for dedicated community members to take an elevated role in governance.

Proposed Action

Create a multisig that is able to modify parameters on the Tribal Chief incentive manager. In particular, the multisig will have the ability to call the following functionality:

  • Incentivize new pools
  • Update emissions rate for existing incentivized pools
  • Lower (but not raise) global TRIBE emission rate for TribalChief
  • Lock or unlock pools with a capital lockup

Snapshot will be used to signal DAO approval for each incentive decision. Again, these would be subject to veto by governance or the Guardian in case of misbehavior.

Holders of this multisig will be determined as follows:

  • 1 team member from Fei Labs will be on the multisig, determined by Fei Labs

  • Community members who would like to be included in the multisig should express their intent and lobby for themselves in this thread. 3 of the community members would be elected by approval snapshot vote.

  • Members of the multisig will be eligible for a recurring monthly 1000 TRIBE grant

    • Expectations: they should be active in the community, stay up to date on developments, and sign on relevant proposals. Inactivity will be grounds for removal from the multisig
  • The multisig will require 2 of 4 signatures to make changes, and will manage its own constituency.

After 3 months, the community can vote to renew the Optimistic approval and determine new members and additional scope for the program if widely accepted.

Scope of Permissions

Each optimistic approval multisig will have a very narrowly defined set of permissions. In particular, these multisigs will not have the ability to mint or burn FEI, to perform protocol upgrades, or to modify protocol permissions. Even though the permission scope for each multisig will be narrowly defined, unchecked misuse could still result in harm to the protocol. Thus, it will also have a timelock of no less than 24h longer than however long it takes to do a DAO proposal (currently 72 hours), during which the DAO or Guardian can veto an action or revoke Optimistic permissions altogether.

This proposal focuses on piloting the feature on the TribalChief, and additional optimistic multisigs will require a DAO vote.


Please share feedback on the proposed framework and rollout plan for Optimistic Approval!

  • I support the Optimistic Approval pilot
  • I do not support the Optimistic Approval pilot

0 voters

3 Likes

I like this idea, however I think the group should be more than 4 people. I would also like to throw my hat in the ring to be considered. Would be great to have a more formal application process or structure on how to apply.

4 Likes

Like the proposal but I second @countvidal point of more admins. I think an odd number works best - so 5 since 7 is too many. The quorum should also be increased to 3. Finally, the lobby process should be formalized

1 Like

@countvidal @cryptozen

Ok perfect lets do a 3 of 5, with either 1 or 2 being from Fei Labs.

For the lobby process, my intention was to have potential signers make a post on this thread on why they are a good fit for this role. Everyone who makes a post (assuming there aren’t obvious Sybil issues) will be included as an option in an “approval voting” style snapshot in which the top 4 users will be chosen, with a 2.5M TRIBE quorum (the same as the on-chain proposal threshold).

Open to suggestions on a better format for the process if you see any issues with this approach

1 Like

As others expressed I feel like 3 of 5 is a safer approach.

And then maybe we can have people representing different parts of the community. Like one member of Fei Labs, one mod, one Chinese community member, one member of the PCV diversification WG etc. But maybe this would be difficult to realise with a simple approval vote.

I would also like to apply for the position of a signer. The main reason being that I am a long-term community member and basically follow the developments of Fei Protocol every day. One project that proofs my engagement is the “History of Fei” timeline I created for the Fei Academy.

(Lastly, I want to nominate @arcology , @GrantG and @Meertitan as I have been working closely together with them and know how passionate they are about the project.)

3 Likes

The looby process can be done here however I will like to see a set of standard questions each prospective admin must address
(i) why are you a good fit for the admin role?
(ii) how long have you been a member of the community - where you a part of the initial token distribution?
(iii) In your opinion, what is the best way forward for value accrual to the TRIBE token?
(iv) have you ever voted “yes” for a FIP that failed or “no” for a FIP that passed - if so why?
The community can decide on questions - these are just a few I have.

I’d also be more confortable with a squad representing different parts of the community, or at least have members that are not too close already.

What would be the rule as to being behind a proposal that would change the incentives allocation, while being a member of this squad ?

1 Like

Been arguing in favour of hybrid semi-direct vs direct democracy for a while on discord, I think it’s only natural for DAOs to converge there, glad you’re leaning towards this as well.

I disagree that multisigs shouldn’t have ability to mint or burn FEI. In the future one of the primary aspects of FEI DAO governance will be monetary policy, which is a highly technical, yet routine practice, perfect mandate for a multisig. Maybe there should be some limit for this mandate approved by the DAO like a debt ceiling for the US government approved by the Congress.

Also still think that FEI should be used in incentivisation mechanisms: it both drives FEI adoption, which is the whole point of this endeavour, and alleviates pressure on TRIBE (less TRIBE in circulation). Again maybe within some limits established by the DAO.

As for the composition of the committee, I think @Eswak, @arcology, @joey, @cozeno and myself should be in it as people who have consistently proven, their ability for proactive independent productive judgement both on technical and community issues, if they wish so, of course. Would also be good if @rleshner or some other experienced people joined (that’s why attracting most active DeFi participants with KPI options is good), maybe not for this multisig, but for some future ones with more serious mandates.

1 Like

This is a great idea, it is high time to bring more power to the DAO.

I would like to put myself up for consideration as well. I’ve joined the community shortly after Genesis and have practically lived on the server ever since. Through my work on Fei Academy, my moderation on Discord and Discourse and as part of many proposals I have proven my engagement and dedication to the community. I have dedicated a large amount of time to this project and I will not stop anytime soon.

For me this approval admin group seems like the next logical step. Furthermore I would like to introduce the idea of representing ideas to both the admin group and the community through my graphics work. We all know that “one picture says more than a thousand words”.

3 Likes

This is an interesting objective I would support. These four groups seem logical plus one free-floating member from the community.

For this pilot, all proposals should be authorized by a snapshot, lets say for the first month? Then we can re-evaluate adding new powers and more autonomy to these groups if it goes well.

This is a good way to achieve the bandwidth we want while retaining community buy-in and decentralization.

I feel strongly that the multisigs should not be omnipotent, by which I mean printing arbitrary FEI or updating roles, at least for a long time. Any FEI allocations should be scoped to pre-minted FEI, for example.

Also, folks like Robert would be great candidates for the Guardian when we expand its constituency, but not for operational multisigs like this one.


I’m very excited to see so much interest in participating in this pilot and think a lot of you bring valuable experience and have a history of being positive contributors to the protocol.

If all goes well, we can soon add optimistic approval multisigs for things like:

  • FeiRari (sort of a throwback to Fei Lend in spirit)
  • PCV allocations / Light Lending Framework
  • Grants

Some people would be a better fit for certain types of multisigs over others, so I think we should expect some shuffling and more opportunities to get involved for people who don’t end up as part of the pilot.

I also thing we should stress the continued use of Snapshot for authorizing decisions until the model has proven itself out to continue to foster broad engagement on the forum and in the discord.

3 Likes

I’ve advocated for a similar governance structure some time ago while contemplating the governance of “FEI Lend”, I’m very convinced of the necessity of a standing committee in a large democratic body such as FEI DAO. I welcome this incentive as a very important pilot and precedence for the future of FEI governance.

Aside from ensuring a odd number of members, I believe that the initial authorizing charter should be even more restrictive, and attempt to specify a permission range of parameters. In the case of TribalChief, the charter should define a range for permissible emissions rate, dollar amount of capital allowed to lock/unlock, etc.

I believe the key advantage of an executive standing committee is nimbleness of reaction, not necessarily superior decision making or knowledge or “professionality”. In the case of interest rate incentives and controlling supplied liquidity amounts, sometimes a hourly response to whales taking out massive loans to engage in arbitrage is merited. Therefore instead of enforcing such a long timelock period, I believe it is better to define a narrower range of allowed parameters.

With regards to election of members, I feel like perhaps a rank choice voting amongst candidates would be the most superior format, where voters rank their candidates by preference. Though how technically feasible this is on snapshot i cannot say.

I’ve also translated this thread for discussion on Wechat, and I will update here any insights over there.

2 Likes

Great to see governance advancing and experimenting, this is an important step for Fei Community!

I would like to apply for the position of a signer.

I’ve joined the community before Genesis and dedicated a lot of energy to the project since that time. Initially, I helped with the onboarding (early days with @DioDionysos and @GrantG) and as the project evolved, I participated in ALL the discussions providing analysis and tools to help community decision-making.

I think time dedicated to the project is one relevant variable that could be considered. Sustaining a high level of engagement for a long period of time is a demonstration of our passion to the project.

I coordinated the formation of the PCV Diversification working group with @Eswak , @countvidal and @Matthew_Graham . In the last 3 months, we delivered PCV guidelines and many proposals, including the staking of ETH that is generating revenue to the protocol. More details here.

I also would like to highlight that I always valued the voting process a lot. I think community engagement is key to the success of the project in the long term. I am one of the most active voters in DAO votes (just behind the founders).

I am here for the long term. I would love to help, bringing my strategic and analytical perspective to the group.

3 Likes

Happy to see so much interest here. Fei will certainly achieve more when it can leverage more people’s wisdom and talents and labor.

Aside from ensuring a odd number of members, I believe that the initial authorizing charter should be even more restrictive, and attempt to specify a permission range of parameters. In the case of TribalChief, the charter should define a range for permissible emissions rate, dollar amount of capital allowed to lock/unlock, etc.

Restricting the range of values is a very good idea and I think it should be a feature to aim for. For safety, either the timelock restrictions or range restrictions will be necessary for each multisig. Different aspects of the protocol will have their own unique management needs, so each of these restriction types might be optimal for different situations.

For the first cut at this though, the range restrictions will be much more complex to implement code-wise, whereas the timelock restrictions can be implemented with minimal changes to the current codebase.

With regards to election of members, I feel like perhaps a rank choice voting amongst candidates would be the most superior format, where voters rank their candidates by preference. Though how technically feasible this is on snapshot i cannot say.

The voting systems available on snapshot can be seen here Voting types - Snapshot . I think the most natural voting choice type when there are will be multiple winners is either Approval voting or Weighted Voting. I am not sure Ranked choice voting will work in a straightforward way when there will be multiple winners.

2 Likes

One more thing: I don’t think it’s a good idea to select people for such task based on a quota. It shouldn’t be a reward for some activity. People should be entrusted based on their merit and fit for the job. For example, nobody from the Chinese community except for @cozeno participated in the discussions and most of the mods never even weighed in on technical issues, I even don’t know what their thinking will be, let alone policies. This Soviet-style quota-based elections, when a person is chosen only for belonging to a certain community strata or rewarded for the activity which has nothing to do with the task in question, is not productive at all.

After some reflection I think the initial charter for the Optimistic Approval Pilot should be completely restricted to enacting the results of snapshot votes. This will give us the opportunity to try out the model without any additional burden on the governance process or dependence on the specialization of the signers, as @cozeno mentioned. We also wouldn’t need any quotas as @pavel mentioned.

I also think it should be shortened to 1 month from TribalChief deployment so we can evaluate if we want to add in additional multisigs with more complex charters.

So far @Bruno , @countvidal , @pavel , @DioDionysos and @Meertitan have self signaled a desire to be on the multisig.

Assuming no one else comes forward, we can do a 4 of 6 with myself included along with the 5 above.

Let me know your thoughts on this plan, we can bring it to snapshot on Thursday Aug 12 pending final discussions

2 Likes

Apologies for not signaling earlier, but I would also like to apply to be on this multisig.

I believe I was the first to point out the potential impact of TribalChief on the market value of TRIBE. After realizing its implications on retail investors, I changed my position and advocated against the proposed reward allocation of the snapshot vote that ended today. I also proposed a reward allocation that can benefit both retail TRIBE holders and the protocol as a whole. As a result of these activities, I believe I am well suited for representing the community’s interests in deciding future rewards allocations.

I have not held an official role in the community, but I have been active since Genesis. I made some contributions to updating the reweight mechanism and I was one of the first in the community to advocate for abolishing Direct Incentives.

2 Likes

I fully welcome Joey’s comment to restrict the scope of this pilot Optimistic multisig. Though I believe that rapid reaction to market movement is one of the key reasons for the multisig’s existence, therefore I advocate for the charter to at least permit the multisig to manipulate the emissions rate of TRIBE within a predefined range.

Upon further thought, I’ll signal my intention to join this pilot optimistic approval committee; with a focus on observing and contemplating the practice of a standing committee within a larger, decentralized DAO.

I have been an active member of this community since genesis launch, and has since served a key communicative role between the Chinese community and the wider FEI community. I’ve also played a part in conceptualizing the interest rate subsidizing programs of FEI, which is spiritually realized in the form of RARI/Cream etc currently.

I believe that members of this pilot program should make extensive publications of the decision making process, to enable better reflection and public commenting so as to improve the execution of future multisigs.

1 Like

I like the spirit of this proposal – a more frictionless method to update parameters of TribalChief without sacrificing community trust. I’d also +1 the idea of restricting (at least in the beginning) the multisig to enacting Snapshot votes. After that pilot, it’d be natural for the multisig to assume more responsibilities. 3 of 5 or 4 of 6 both seem good to me.

It’s truly awesome to see so many people interested in this.

Since the first iteration of OA will be focused on managing TribalChief, let’s wait until there is a version of TribalChief that can pass a snapshot before moving forward with an OA snapshot. A new TribalChief vote is going up soon :sunglasses: :sunglasses:

2 Likes

Since TribalChief has passed its snapshot vote, it would be good to decide on whether Optimistic Approval should be a means of managing the staking system.

There are 7 people that have self-nominated in this thread. Each one is a trusted community member with a history of active contribution on the discord and the forum.

@Bruno
@countvidal
@cozeno
@DioDionysos
@fei.saver
@Meertitan
@pavel

It is for this reason that in the first iteration of OA we believe that it would be best to use a 4 of 7 multisig that is held by each of the above members. Having 7 people alongside the guardian and DAO veto’ing mechanisms will ensure that the multisig securely carries out its mandate.

It is important to reiterate that OA is NOT a conventional multisig. Its powers are narrowly defined, its mandate is merely to enact snapshot votes on-chain, and all of its actions are gated by a timelock and can be veto’d by the DAO or Guardian before they take effect on-chain.

Please vote and discuss.

https://snapshot.fei.money/#/fei.eth/proposal/QmbqR88Ta6rM2QmmHj75UZSVZhTSawGf5JbgJGuuJQNDeZ

4 Likes