[Feedback Requested] Adjusting Governance Parameters

:star2: TL;DR: This post seeks to explore possible adjustments to several governance parameters. The objective is to gauge the community’s sentiment regarding the suggested alterations to each parameter listed below. This feedback will inform the potential inclusion of these changes in the planned upgrade to the OZ Governor governance contract, slated to proceed through the June proposal cycle.

Please leave feedback on these potential changes by May 29th so we are able to coordinate with Scopelift to include these changes in the final upgrade.

:point_right: If by May 29th Abbey and I feel this discussion and debate on parameters needs more time, we can postpone the upgrade another cycle.

Overview

Governance parameters are the encoded rules and mechanisms of the DAO’s governance process. They help ensure the security and trustless execution of governance proposals. The parameters encoded in the governance contracts have not been changed since the launch of the token in February 2021. The upcoming contract upgrade to OZ Governor provides a convenient time to discuss and include any changes to these parameters to be included in the same upgrade, wrapping all changes into one on-chain proposal.

The Governance Committee would like to get a temperature check on how the community feels about potentially adjusting the following parameters. Each section includes a brief overview of relevant context around each parameter, a recommendation from the Governance Committe, and some specific feedback questions for each parameter.

Parameters in Discussion

:information_source: Please note that the recommendations from the Governance Committee on each parameter are not final and open for discussion. If we do not receive any feedback on the points above, we will move foward with our recommendations when submitting the final OZ Upgrade proposal.

Quorum :ballot_box:

Quorum is the threshold that needs to be met in order for a proposal to pass an off- or onchain vote. The quorum ensures the participation of numerous delegates for a proposal to pass. A high enough quorum ensures that malicious and/or ineffectual proposals are harder to pass. Currently quorum is set at 4% of the total RAD supply (= 4M RAD) voting in favor of a proposal for both off- and onchain votes.

A 4% quorum was the common standard we observed in other DAOs at the time of the launch. However, if we look at this quorum in terms of the total circulating supply (the number of tokens actively traded in the market and held by the public) and the votable supply (presently delegated RAD), the 4% becomes more concentrated. Around ~50% of the RAD supply is currently locked in the treasury and not in circulation, leaving around 52M RAD in circulation. This limits the possible total available votable supply of RAD, which is currently only about ~11M RAD. Given the current distribution of power, the continued support of the largest token holders is still required to pass proposals, leading to a skewed dependence on whales.

Total Supply = 100M / 4% = 4,000,000

Current Circulating Supply = 51.8M / 4% = 2,072,000

Cuttent Votable Supply = 10.84M / 4% = 433,600

Governance Committee Recommendations:
Onchain: Lowering the quorum to pass an onchain proposal also lowers the barrier for potential governance attacks. Although the 4M quorum is not ideal given the current distribution of power, we actually recommend waiting to adjust this metric until a proper security/emergency council would be in place that has enough delegated voting power to act on behalf of the Radworks ecosystem in the case of any potential attack.

Off-chain: We might contemplate reducing the quorum requirement for off-chain proposals, given their main purpose is to confirm readiness for on-chain submission or to validate off-chain operational or social norms within the Radworks community. Lowering the quorum for these decisions would also reduce the dependency on whales to pass offchain initiatives. We recommend reducing the quorum for offchain proposals down to 2%, aligning it with the calculation based on the total circulating supply.

FEEDBACK: How are your feelings towards changing the off- or onchain quorum thresholds?

Voting Delay :raised_hand:

Voting delay is the amount of time between when a proposal is submitted onchain to when the voting period starts. This delay provides an extra opportunity for the community to scan for potential malicious proposals and react before they are able to be voted on. This is currently set to “2 blocks,” which can vary in exactly how much time that takes, but currently that equates to about 30 seconds (depending on network conditions and activity).

Governance Committee Recommendations:
Extending the Voting Delay allows more time to assess and ensure proposals that are being submitted onchain are legit and not malicious. Scopelift suggested we change it to at least 24 hours, which we agree with.

FEEDBACK: Do you have any thoughts on extending the voting delay? Any objections to extending it to 24 hours?

Proposal Threshold - Onchain :writing_hand: :chains:

The Proposal Threshold is the minimum number of RAD an token holder needs to have in order to submit a proposal onchain. The Proposal Threshold is currently set to 1% of the total RAD supply (= 1M RAD).

With this current threshold, there are only 5 delegates who are eligible to submit a proposal onchain (see Tally delegate dashboard). Proposal authors who do not have 1M RAD delegated to them need the support of a “sponsor” (someone with >1M RAD delegated to them to submit for them) to submit their proposals for them. By lowering the proposal threshold, this would allow for more folks to independently submit a proposal onchain without needing a sponsor.

Given current delegation standings, lowering the Proposal Threshold to:

  • 500K would increase potential proposers to 6
  • 100K would increase potential proposers to 7
  • 50k would increase potential proposers to 10
  • 10K would increase potential proposers to 16

Governance Committee Recommendations:
Reducing the Proposal Threshold would decrease the obstacle for bad actors to submit harmful proposals onchain. This is important to consider in order to ensure this threshold is not lowered too significantly to, but rather to a level where the community perceives it as predominantly held only by trusted actors.

It is important to consider the actual impact changing this parameter would have. At the moment, even if we lowered it to 500k, that would only allow 1 additional delegate to be able to independently submit a proposal onchain. This does not feel like a significant enough impact to suggest changing the Proposal Threshold, however we feel this could be a good benchmark to look out for in the future.

The Governance Committee recommends maintaining the current Proposal Threshold for the time being. However, we propose ongoing monitoring to assess the potential impact of lowering the threshold to 500k RAD on the number of delegates able to submit on-chain proposals over time. Once this figure reaches a point deemed significant by the community, where lowering the threshold would alleviate bottlenecks while ensuring the security of a sufficiently high threshold, it’s advisable to revisit this discussion.

FEEDBACK: At this point in time, do you feel we should lower the Proposal Threshold to allow more delegates to post proposals independently without a sponsor? Why or why not?

Proposal Threshold - Off-chain (Snapshot) :writing_hand:

This is not included in the onchain governance parameters as this is an offchain process, but nonetheless is an important metric to discuss with the community.

Currently, to submit an off-chain proposal on Snapshot, one must attain “proposal author” status from the Governance Committee. This process was introduced last year to replace the1M RAD proposal threshold on Snapshot in response to numerous spam proposals flooding the Radworks Snapshot page. Moving to the process also reduced the barrier of needing 1M RAD to submit an offchain proposal.

Given the consistent monthly cycles and the generally low volume of proposals, it is easy for the Governance Committee to track who the authors of active proposals on the forum are and grant permission to submit on Snapshot as needed. However, if we were to want to remove the Governance Committee as the gatekeeper of the Radworks Snapshot, we might contemplate reverting to a predefined threshold for individuals to post off-chain proposals.

Governance Committee Recommendations:
Considering the low volume of proposals and guaranteed elimination of potential spam, we feel that it would make sense for the Governance Committee to continue to grant proposal author access on Snapshot to eligible parties for now. However, we suggest reconsidering this process for potential revision once the volume of proposals increases. If the community would like to reconsider reintroducing the proposal threshold, we should discuss if 1M RAD is an appropriate number for offchain proposals.

FEEDBACK: Do you feel the Governance Committee should continue to manage the proposal author status for offchain proposals on Snapshot, or do you feel we should reintroduce the Proposal Threshold to determine who is able to post an offchain poll on Snapshot? If the latter, should the threshold stay the same or be reduced?

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