FIP-82: Governance Enhancements

Summary

Enhance DAO governance through Liquid Representative Democracy. The Tribal Council will replace Optimistic Approval as the admin of the Optimistic Timelock, and contain members from the community, Fei Core team and Rari Infrastructure.

Lower the barrier to vetoing and increase transparency to improve execution quality and community engagement.

Motivation

The Tribe DAO now governs multiple protocols and products (Rari, Fei, LaaS, Turbo, Fuse, TribalChief, Grants).

DAO governance often suffers from voter apathy, lack of community context, and barrier to participation from TRIBE holders who do not wish to pay gas. Often Optimistic Approval (OA) in its current form has unclear charters and responsibilities, due to vague snapshot authorizations and interpretations. Many trivial governance actions go through a lengthy process of proposing a draft, last call, snapshot, and an optimistic timelock. This can mean over 8 days of governance to enact small and non-controversial proposals.

So far TRIBE DAO has used the following three-tiered governance:

  1. The Security Guardian is currently managed by Fei Labs in a 3/7 multisig. It has power to pause the protocol and adjust critical parameters through Guardian contracts.
  2. Optimistic Approval is a community held 4/7 multisig on a 4 day timelock. It has power over certain protocol features such as FeiRari, TribalChief, and Laas. The timelock is veto-able by the DAO and by the Security Guardian.
  3. The DAO controls everything in the protocol, and will continue to do so. But more governance actions should be relegated to the other governance tiers.

The governance actions available to the Tribe DAO vary widely in terms of complexity and importance. An ideal governance structure would keep decisions closest to the members of the DAO that have the most context, and enforce transparency and checks and balances on outcomes. Negative consent a.k.a. optimistic governance is perfect for this, as it gives the community a clear way to veto decisions which are opaque or of unclear value.

This proposal would greatly improve the governance experience by relying more on negative consent, allowing specialized governance pods to form, and encouraging transparency and community engagement on the protocol level.

Proposal

Maintain the existing governance tiers but expand the Optimistic Approval and Guardian to accommodate Orca Pods via liquid representative democracy. Optimistic Approval will become the Tribal Council, and snapshot requirements will be removed in favor of making it easier for the community to veto. The Tribal Council will be initially a 5 of 9 multisig, and membership should come from the community, Fei core, and Rari infrastructure with no group representing enough to reach quorum. The Tribal Council timelock will be 4 days and veto-able by the Tribe DAO, Guardian, and Nope DAO.

Liquid Representative Democracy means that a committee is elected by the DAO to operate the Optimistic Timelock with discretion. The DAO can at any time change the composition of the committee by adding or removing signers. This opens up more opportunities for the most committed community members to play an elevated role in governance.

Optimistic Pods

Optimistic Pods are modular governance units comprised of an Orca Pod and an optimistic timelock. Orca is a protocol which extends Gnosis Safe to add custom functionality to multisig membership, and allow other entities to manage group composition. The pods will have limited power over areas of the protocol controlled by on-chain access control and authorized by either the DAO or Tribal Council. Optimistic Pods are still subject to veto per the normal mechanisms. Initial Optimistic Pods will include Fuse (maintaining powers of the current FuseFeeDistributor), FeiRari (maintaining powers over FeiRari) and Grants (managing the grants budget and approvals).

Optimistic Pods are a perfect way to involve community members in specialized roles where they can effect change on parts of the protocol they can become deeply familiar with. The broader community will still oversee these changes in an optimistic fashion.

Veto

Introduce a “Nope DAO” which can veto any proposal from Tribal Council or an Optimistic Pod as soon as 10 million TRIBE have voted. This would take effect immediately without a timelock. It is a distinct governance unit similar to the normal Tribe DAO, but its only function is the veto. It cannot veto the normal Tribe DAO, but the Guardian still can.

This serves as a check on the powers of the Tribal Council in addition to the guardian. Any proposal vetoed in this manner must go through DAO governance in order to execute.

In order for Veto to be truly effective, there must be a high bar on proposal transparency. A clear description of actions and links to any code used must be provided at time of proposal, similar to within the current framework. The various entities with Veto power within the community should veto any proposal without clear description of all actions and effects.

Distribution of Power

The DAO will maintain the exclusive ability to move PCV arbitrarily, mint FEI or TRIBE, and manage the primary roles of the system. The Tribal Council will maintain optimistic control over lower clearance roles, with the DAO having ultimate say over where power lies.

The Guardian will transition to a 3 of 7 pod with membership also controlled by the DAO. Its members should be full time contributors to the DAO, due to the security sensitive nature of its operations.

Fei Labs and Rari Infrastructure will abstain from any DAO votes involving a material conflict of interest, in particular elections of the Tribal Council.

  • Yes this is awesome
  • Need more clarity
  • No way

0 voters

14 Likes

Joey,

You state;
“DAO governance often suffers from voter apathy, lack of community context, and barrier to participation from TRIBE holders who do not wish to pay gas.”

I disagree with the apathy. I’ve been around since day one, read tons of discussions, articles, even wrote one. But, simply by looking at the power structure (Tribe distribution), de-facto incentives for the core team to stick together, one community member has to face the fact that there is not much he can do.

If vote was to get closer to a community representation, quadratic voting would be a huge step forward.

I think a great first step would be to actually clarify the token distribution so people know the table they are on when it’s time to vote. Transparency should be maintained at the core level as part of the product.

Now, you also state:
“An ideal governance structure would keep decisions closest to the members of the DAO that have the most context, and enforce transparency and checks and balances on outcomes.”

So, you want “context” weighted decision ok. I have 2 questions here:
1/ The current system is 1 tribe 1 vote. Knowledge of context is irrelevant. And if we want to have community engagement, we have to keep it that way and bear the fact that each participant has its own contextual information.
2/ How do you measure “context” ? What is the say on the community on how this word is defined?

Now, liquid democracy is a different game and opens the gate to corporate politics where vote-gathering for representative power matters most than crowdsourcing opinions and information.

Finally, I agree that pizza-sized teams is a good way to go but it seems to already be the case.

So, in a nutshell, what I’d like to see:
1/ Clarity in token distribution.
2/ Clarity in which system is used for making decisions: A/ TRIBE-weighted (current). B/ “context”-weighted. (C/ else, quadratic voting, etc.)
3/ Clarity in the direction and strategy the project is going. There are lots of proposals (which is great), lots of protocols and products (which is great). But the question is, you are the head of all this (max “context” holder). How do you plan on getting FEI being the base quote to say 200 tokens? How do you plan on having our partners use our infrastructure to the vital point that it is of the essence to them to hold TRIBE? How do you see the protocol not being rolled over by Frax when they open the Laas gate? Why and how will we get past MIM and LUSD? That are the questions any equity stock holder would like to see answered on any investor call. These are the answers that kill voter apathy and indeed, they are “context” weighted: They’re all yours. :slight_smile:

4 Likes

I’m sure they are aware some of their voters care a lot, they never said every voter is apathetic. For those knowledgable voters and voters such as yourself, it might make more sense for these individuals to be representatives for the community.

It might be more practical for representatives to create a campaign to collect delegated votes from users. Even with quadratic voting, it still might not be practical to vote when you have $2000 in tokens, gas could potentially be 7.5% of your portfolio.

1 Like

Governance is the greatest weakness of many legacy DeFi projects, excited to see the Tribe innovating here. I’m really excited about this structure and thinking about how to apply it to VOLT.

One thing that would be good to get clarity on is on what basis the numbers are determined for quorum for the Tribe DAO and Nope DAO. The idea that a lesser quorum is needed for veto powers vs making changes to the system makes total sense. I have some concern the quorum for Tribe DAO is too low.

4 Likes

Thx Racoon_knight, I agree with your statements:
A/ Caring and apathy are different stuffs. But voting 1 token 1 vote do create free-riders as they assess their impact power. This is where quadratic voting kicks in.

B/ Representing the community is a task on its own. I’ve tried liquid democracy and it yields pretty much a distribution in line with the twitter followers count. Which is nor good nor bad, simply introduces a lot of politics in my view.

C/ Voting should be cheap to be effective. Having a technology that allows cheap voting is an infrastructure problem. Not a governance problem per se. I have no idea though when and where this will become available but patching the governance method because of infrastructure issues bears externalities.

Thanks for the feedback.

2 Likes

This is a step in the right direction. Creating modular pods to delegate more of the day to day tasks will streamline the process.

2 Likes

I love the proposal and how you adapted the Pods design into Fei’s governance struct.

However, I am a bit confused by this line of logic (quoted above).

First of all, what kinds of unclear charters and responsibilities does OA have?

And how are those uncertainty handled by the newer design?

Thank you.

Given the escalating calls and various measures for governance reform in the last few month, this proposal for a top-down overhaul of the wider governance structure couldn’t have come at a better time!

Though with the powers that this structure would grant to various new bodies, I feel that it is necessary to clarify and elaborate some procedural guidelines of these bodies in the empowering charter. The operations and experience of Optimistic Approval have amply proven that each body should have its own sets of ground rules of day-to-day operation.

The most obvious cases that could use further elaboration in my mind would be:

  1. Criteria and circumstances, and timeline of the Nope DAO. Since the Nope DAO can only veto operations by Tribal Council or individual Pods, those bodies would most likely have a faster turn around time compared to FIP proposals. It seems to me that the Nope DAO would need its own set of abbreviated guidelines (ie skip forum posting, mechanism to respond to Pod action etc) to be able to exercise any meaningful checks on the power of Pods/TC. This brings into focus another issue as experienced by the operation of the OA:

  2. Each individual Pod should have their powers as clearly defined as possible and have their own operational guidelines upon formation. In conjunction with Nope DAO, they should be structured to allow for enough time and access to information for the wider DAO to have a realistic chance of overseeing. I feel an easy to understand synopsis of every multisig action is a baseline. Some meaningful discussions on that front has already been forwarded and could provide a model for the prospective Pods.

  3. The process with which new Pods can be incorporated should be outlined.

  4. The Guardian Multisig seems to occupy much of the same role as Nope DAO. Current members of the Guardian have more than enough votes (in any combination of 3/7) to exercise the same veto powers via the Nope DAO. As Joey has mentioned, any prospective members of the Guardian should be full time DAO members and ideally have a major stake in the protocol. Working in conjunction with delegated votes, any potential combination of 3/7 Guardian members should conceivably have enough vote to exercise Veto via Nope DAO.

I am wondering if there is any virtue to making the Nope DAO more comprehensive and powerful? This way the Guardian multisig can be phased out and those very same major stakeholders could exercise an identical veto power via a more transparent process. On the other hand, it was mentioned in the white paper, and in various earlier documents of FEI protocol that the Guardian multisig was meant to be phased out eventually. On deeper consideration, I feel like the Nope DAO can be modified and regulated to achieve the same degree of security that Guardian multisig might provide while making the process far more transparent to everybody else.

3 Likes

This is an interesting proposal and I like the direction that this is going.
Some questions:

  1. Is there an expectation that employees from Fei Labs or Rari to be represented at any of these committees/pods? It seems that the Guardian seem to be the most critical in terms of core protocol functionality and it may seem prudent for Fei Labs to continue to manage this. Most community members here do not have the technical knowledge or deep understanding of protocol mechanics to be useful in these situations or roles.

  2. Is it possible to have the same members be represented in multiple pods/committees?

  3. What is the onboarding/offboarding process for members to enter/exit these committees?

  4. Tribal Council as an evolution of OA is a great step for expanded scope. However, how does this work in practice for proposals going to be executed for something say Fuse? It seems that now the TC will be executing a proposal which will go to a subset of scope (Fuse Pod) before it gets passed/executed (or the other way around). This seems to pass through more administrative hurdles and bureaucracy. Can you give an example of proposal process under this new framework?

  5. I see that based on historical precedent most voters on Fei proposals (this may be different post-merger) are those with outsized voting power, ie Fei Labs, whales with economic skin-in-the-game and unknown delegates from other organizations, even in snapshot proposals with no gas costs. Therefore, power is still highly concentrated.
    My feeling for voter apathy is not entirely about gas cost, or rather community members do not think that their vote would make a difference. How would this new governance framework improve or change this reality, if any?

  6. Would a delegated vote scenario be as effective here to empower non-core team members to take on more responsibility? Currently there is a number of votes delegated via Tally to Joey, among others. Is there any roadmap or plans to further decentralize voting power from the core team?

  7. OA is currently compensated via FIP-75. Would all of these new roles be now transitioned under the long-term contributor framework?

  8. NopeDAO is an interesting subDAO component to the TribeDAO. However, how can there be suitable safeguards from bad actors executing governance attacks on the wider TribeDAO with their veto power? It appears to me that this almost looks like Curve’s EmergencyDAO.
    Similarly, how would a scenario where TribeDAO members and/or pod/TC members from occupying the same power spectrum in NopeDAO be prevented? If this is the case, it will make this subDAO largely irrelevant with the exception of immediate execution of veto.

5 Likes

Good proposal. My points:

  • Great powers bring great responsibilities. Tribal Council should make the proposals and discussions public in the forum following some guidelines. Eliminating all the open discussions would not be good for transparency. Making the discussion in the forum would improve the current OA model that is restricted to Discord Channel.

  • For transparency, Tribal Council should have a quarterly report

  • No overlap between functions. If someone is already in the Guardian, should not be in Tribal Council. It is important to keep the separation for a good balance of powers.

  • If I understand correctly from the figure, Tribal Council is responsible to create pods? The members of each pod is defined by Tribal Council?

  • The funding to teams working under TRIBE DAO would be via Tribal Council?

  • Tribal council could have a budget of FEI and TRIBE defined for each quarter

  • In a more advanced view, Tribal Council could be something more similar to a Board of Directors, being responsible to Strategic leadership, Financial oversight, Governance and attracting talents to Pods.

2 Likes

negative consent is a powerful concept. finding a way to properly harness it will help the DAO tremendously by streamlining governance, increasing representation, and giving every governance decision the proper amount of collective decision making

I think the biggest question that I and other people have with this framework is, what will be the processes+structures for transparency+discussions of actions by each entity in the diagram. actions that are consequential and/or contentious should require community discussion prior to being submitted to the timelocks. actions that are small and universally agreed upon should not require prior discussion

actions that fall somewhere in between are where things get interesting, and some sort of formal process could be beneficial. however, another consideration is that the system as proposed already provides formal checks and balances for when one party does not approve of another’s actions. so any policies regarding discussion+transparency of decision making can be high-level guidelines rather than strict rules that cover every possible use case. no matter how hard anyone tries there will always be ambiguous edge cases so we can lean on the discretion of each entity in the system to exercise checks and balances

I think that in all cases, every action submitted to every timelock should be accompanied by a note that decribes that action and gives some amount of context/justification for why that action is being performed

4 Likes

One example can be seen here:

Recently, OA was supposed to revoke KYL and GRO TRIBE rewards from the TribalChief, yet it was not clear that OA had the mandate for such actions. Thus a core team member had to write a Snapshot proposal first. In the end, it took 7 days (including the time lock) to execute this proposal.
This is not to critique OA for acting too slow or the core team for acting too fast, but it is one example where it becomes obvious that we need clearer guidelines and mandates. Or a leaner process in general which is why I welcome the changes above.

Can core team members or community members be a part of both the Guardian and the Tribal Council? (see arcology’s comment)
I think it might make sense if the person appreciates great trust in the DAO. At the same time, it would go against the ethos of decentralisation.

Also, I support the sentiments above about the compensation. If DAO members are offering a service then they should be compensated. It would make sense to tie the compensation into this proposal so that we do not end up in a similar situation like OA.

3 Likes

I love the proposed governance model and how hybrid it is. Most DAOs are either extremely rigid (only governor voting) or extremely centralized (only all-powerful multisig).

I feel we are going the right direction, with governor voting having ultimate rights over everything, and multi-sigs that have timelocks for every actions.

I especially like the negative consent (acceptance by default + possibility to veto “easily”), I think it fits the workflow of how we do things, and the increased transparency around multisig/governor actions will be very welcome too.

looking forward to these changes!

3 Likes

Reworded to “Often Optimistic Approval (OA) in its current form has unclear charters and responsibilities, due to vague snapshot authorizations and interpretations.” Basically by leaving it up to snapshot votes, governance needs to be explicit (same issues as before), or grant unclear power and interpretation to OA.

The new design solves this by giving OA full optimistic discretion via negative consent.

The Nope DAO is a fully on-chain mechanism and given its limited scope, should be able to propose immediately and provide a discussion on the forum to explain rationale simultaneously.

  1. Each individual Pod should have their powers as clearly defined as possible and have their own operational guidelines upon formation. In conjunction with Nope DAO, they should be structured to allow for enough time and access to information for the wider DAO to have a realistic chance of overseeing. I feel an easy to understand synopsis of every multisig action is a baseline. Some meaningful discussions on that front has already been forwarded and could provide a model for the prospective Pods.

Yes I think the OA reform proposal should be included as part of these discussions, and pods should follow a similar structure.

  1. The process with which new Pods can be incorporated should be outlined.

Pods should be formed through either the DAO following the DAO’s process or the Tribal Council following the Tribal Council’s process, and be sure to comply with guidelines for pod operations per 2.

  1. The Guardian Multisig seems to occupy much of the same role as Nope DAO. Current members of the Guardian have more than enough votes (in any combination of 3/7) to exercise the same veto powers via the Nope DAO. As Joey has mentioned, any prospective members of the Guardian should be full time DAO members and ideally have a major stake in the protocol. Working in conjunction with delegated votes, any potential combination of 3/7 Guardian members should conceivably have enough vote to exercise Veto via Nope DAO.

The nope DAO is a crucial alternative to the Guardian, however both are necessary in my opinion for the following reason:

  1. Nope DAO has a lower quorum with immediate execution, and is fully permissionless and public. This means 10M TRIBE would equal a global veto on the entire Tribe DAO, which is undesirable. The Nope DAO will not have veto power over the Tribe DAO, only councils and pods.
  2. For a similar reason, the Guardian will be the sole maintainer of pausability and security related powers. These powers should not be exposed in a totally public manner.

Crucially, as part of this proposal the Guardian should transition to a Pod structure where the DAO can manage its constituents.

1 Like

To me, this proposal provides a way for Fei Labs, Rari, and the community to work more closely together. I expect most of the pods to contain members of the former, especially more technical ones. Pods such as Grants can be more community driven. It will be case by case.

  • Is it possible to have the same members be represented in multiple pods/committees?

I think overlap should be allowed but monitored. Conflicts of interest and power consolidation should be transparently discussed and managed by the DAO.

  • What is the onboarding/offboarding process for members to enter/exit these committees?

The DAO can manage the consituents directly, this proposal is not prescriptive about process. The pods can also be managed by the Tribal Council and other pods depending on how the powers are distributed.

  • Tribal Council as an evolution of OA is a great step for expanded scope. However, how does this work in practice for proposals going to be executed for something say Fuse? It seems that now the TC will be executing a proposal which will go to a subset of scope (Fuse Pod) before it gets passed/executed (or the other way around). This seems to pass through more administrative hurdles and bureaucracy. Can you give an example of proposal process under this new framework?

This should remove bureaucracy. Any pod/council with a protocol power has the discretion to propose immediately (and transparently). The community can act to veto during this time through various mechanisms, providing checks and balances on the expanded scope.

  • I see that based on historical precedent most voters on Fei proposals (this may be different post-merger) are those with outsized voting power, ie Fei Labs, whales with economic skin-in-the-game and unknown delegates from other organizations, even in snapshot proposals with no gas costs. Therefore, power is still highly concentrated.
    My feeling for voter apathy is not entirely about gas cost, or rather community members do not think that their vote would make a difference. How would this new governance framework improve or change this reality, if any?

I think the Nope DAO is a powerful way for the community to take action when something undesirable is proposed.

  • Would a delegated vote scenario be as effective here to empower non-core team members to take on more responsibility? Currently there is a number of votes delegated via Tally to Joey, among others. Is there any roadmap or plans to further decentralize voting power from the core team?

There are 10s of millions of TRIBE delegated outside the core team. Historically this TRIBE votes far less frequently than the core team, and only on the most important votes such as the merge.

  • OA is currently compensated via FIP-75. Would all of these new roles be now transitioned under the long-term contributor framework?

This proposal is not prescriptive about compensation, but I imagine some combination of the two being used on a case by case basis across pods.

  • NopeDAO is an interesting subDAO component to the TribeDAO. However, how can there be suitable safeguards from bad actors executing governance attacks on the wider TribeDAO with their veto power? It appears to me that this almost looks like Curve’s EmergencyDAO.
    Similarly, how would a scenario where TribeDAO members and/or pod/TC members from occupying the same power spectrum in NopeDAO be prevented? If this is the case, it will make this subDAO largely irrelevant with the exception of immediate execution of veto.

It is intentionally more limited and decentralized than Curve’s EmergencyDAO. The Nope DAO can only veto “down” on TribalCouncil and pods. The Tribe DAO still maintains absolute control over the Nope DAO. The Guardian can veto the Tribe DAO. I’ve been thinking about adding a final side module for the Tribe DAO to have some control over Guardian without being veto’ed to complete the checks and balances.

1 Like

This proposal places a high emphasis on transparency and open discussions. If the procedures aren’t followed, the Guardian or Nope DAO should veto. I like the idea of focusing on forum.

  • For transparency, Tribal Council should have a quarterly report

I think regular community calls would be even more effective.

  • No overlap between functions. If someone is already in the Guardian, should not be in Tribal Council. It is important to keep the separation for a good balance of powers.

No overlap is too rigid imo. The amount of overlap should be carefully controlled but not limited to 0. My mental model is quorum should never be achievable in two different multisigs by the same group.

  • If I understand correctly from the figure, Tribal Council is responsible to create pods? The members of each pod is defined by Tribal Council?

Yes but also overseen by the DAO.

  • The funding to teams working under TRIBE DAO would be via Tribal Council?

This proposal is not prescriptive about funding, but I imagine something like delegated funding to the Tribal Council yeah.

  • In a more advanced view, Tribal Council could be something more similar to a Board of Directors, being responsible to Strategic leadership, Financial oversight, Governance and attracting talents to Pods.

This mechanism does involve many concepts from corporate governance. I actually see the DAO more like the Board of Directors and the Tribal Council as more like the c-suite. Either way, I consider this mechanism far more powerful and decentralized due to its cryptographic checks and balances on-chain.

2 Likes

Agree, it could have the community call and and a simple report.

I see, my mental model is that the same group should not be too close to quorum in two different multisigs.

This is a key point to be discussed. Tribal Council has more powers and discretion than OA. It also has responsibilities in relation to Pods. This should be taken into consideration when defining the compensation. I am curious to hear more thoughts on the best way to compensate Tribe Council.

This is a good direction. Fei has new initiatives such as Turbo and LaaS that require ongoing governance decisions, so it would be helpful to set up a robust framework for handling those decisions.

It would be timely to set up a compensation plan for contributors in tandem with governance enhancements, since these enhancements will onboard many multisig members.

One question: how exactly are the roles of Fuse and FeiRari pods differentiated? In particular, what powers would the Fuse pod have over the FeiRari pool?

I like the direction it’s taking and I’d suggest expanding the discussion to the dev part as well: who and how makes decisions about product strategy, roadmap, development, audit etc. On the one hand, there’s FEI DAO with TC and pods, on the other hand, there’s a Fei Labs startup with its own board and c-suite. All things dev are sort of at full discretion of Fei Labs. Yet delineation of mandate and responsibility between them is murky for now, and transparency better be brought about here as well.

1 Like