FIP-82: Governance Enhancements

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.

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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.

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

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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.

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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.

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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.

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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

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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.

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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!

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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.

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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.

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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.

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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.

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From other DAOs as Balancer, there is the role of a Ops Pod with the objective to connect each working group and provide community interface through reporting of working group progress, milestones and initiatives. Ops subDAO is the conductor of the orchestra. This subDAO is responsible for:

  • Onboarding
  • Reporting/Budget
  • Communication/Transparency
  • Compensation
  • Engagement

See the role of Ops subDAO here .

For reference, this is the proposal to create the framework of Balancer subDAOs: here

“Ops will formally approve whenever a Signer is added or removed from each subDAO, though it is likely that subDAO has the most visibility into who among the contributors would make a good leader. It should not be Ops making a unilateral decision, but the Signers are ultimately accountable to Ops and Ops is accountable to BAL token holders.”

The Community is responsible for holding the Ops subDAO accountable to reporting and communication transparency.

I think we could have a Ops Pod in the Tribe DAO with this role. Some entity responsible for making transparent for everyone the operations of the DAO, as Balancer intend to do here.

In another alternative, the responsibilities could be under Tribal Council but 9 signers is a large group and more difficult to coordinate. A larger group also has some dispersion in accountability. To mitigate that, we need to know specifically the members responsible for each activitiy in Tribal Council.

I believe in the power of multiple small groups with autonomy and accountability.

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In the spirit of providing actionable guidelines for governance action; I am recommending the following draft procedures for Nope DAO:

  1. Any user who meets a quorum of more than 5,000 TRIBEs may propose a new action directly on-chain, or via the Fei Protocol snapshot.fei.money with the title-serial number Nope DAO Veto (NDV-xx, Vetoing “summary of pod/council action”), with at least 24 hours, but no more than 48 hours of voting time allotted.
  2. The NDV should clearly state the specific action it is trying to veto, the pod/council which authorized the target action in the first place, and what is the reason for the veto. Permissible grounds for starting a veto can include, but are not limited to:

a. The action will clearly result in immediate PCV losses, or would expose Protocol equity to elevated risks.
b. The action is in clear violation of the stipulations of a passed FIP or violates published guidelines of that specific pod in question.
c. The action will result in clear conflicts of interest or unfairly profit the members of the pod/council that has authorized it.
d. The action contains faulty code or other on-chain vulnerabilities.

  1. Upon the initiation of on-chain Nope DAO action or NDV, the author of the veto or Fei Discord Moderators should promptly start a Discourse forum thread discussing this proposed Veto. This forum thread should be also advertised to the @governance tribe role on discord. The original proposers of the target action should also promptly respond to the accusations levied by the NDV on discourse.
  2. The on-chain action will automatically veto upon receiving 10,000,000 votes. If the NDV snapshot crosses the 10 Million vote quorum, the Guardian Protocol should step in and immediately terminate the target action. The original proposers of the now vetoed action must write a report answering to the Tribal Council why it has proposed such actions and provide details to the decision making process.
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I did a Benchmarking on DAOs Organizational Structures that may help in the discussions here.

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