Snapshot is currently set to force “Single Choice Voting” on every proposal. This is a blocker for entities like veBAL wrappers who might want a way to reflect pass-through votes accurately. Ultimately we lose no functionality by making this change since voters can select one option with 100% of their voting weight and it would be as it is today - but we gain some additional use cases like wrapper pass through votes in case those organizations decide to make use of it.
If approved, the DAO Multisig (which is set as admin of the snapshot space) will initiate a transaction to change “Type” from “Single Choice Voting” to “Weighted Voting” in the Settings → Voting menu via the snapshot gnosis safe app.
Good to know, thanks. A chunk of veBAL power as big as Aura might carry some liability and reg risk if it’s able to interfere too much on SPs (ie perception of centralized decision making, jurisdiction reach, etc.). It would be best to avoid it by diluting it’s power to a more decentralized framework.
Maybe it’s more about creating a governance framework that supports/encourages/promotes greater decentralisation in decision making and adapting it slowly to work towards the desired effects.
This is a step towards fixing governance over-concentration. It sounds like Aura will start using this new voting mechanism, which means that Aura votes will be split based on their snapshot.
This means that any delegate in the ecosystem is capable of accumulating both veBAL and vlAURA votes via delegation, and every vote counts towards the final result.
The last step, and it will take a little time, is that we need more delegates (individuals or councils) to form and start participating in governance such that at least a few entities have to find consensus for something to happen.
It would be best if these entities were not too close to each other/really independent.
If we don’t see more “professional delegates” starting to form in our ecosystem, I believe the next step is to find some way to create monetary incentives for skilled delegates.
At it’s simplest form, this could be something like redirecting a smol percentage of protocol fees to delegates based on vote count(maybe capped at like 15% of the vote or the biggest we want to support delegates in being). It could also be interested to pay a small % of fees in BAL that vested over a multiple year timeframe.
One step at a time, this is a good one. It creates a lot of new possibilities for greater decentralisation of the voter base.
It’s worth noting that the current system Aura uses to vote was put in place, and I think even proposed by me, in order to deal with an over-concentration of votes by Humpy (a single entity that seemed to have less aligned interests). That worked well. Soon after came the peace treaty, which kind of forbid humpy from taking positions that both “Balancer” and “Aura” didn’t agree with on snapshot. This rapidly rocketed the Aura Council into the governance hot seat.
It’s a process, One of trying to find new organisational structures that haven’t really been worked out by anyone yet. We are adapting and changing and evolving as we go. IMO Balancer governance is one of, if not the single, most decentralised, transparent and “honest” in DeFi. Maybe I’m biased, contributed to a few DAOs before I ended up here, so not just a total fan boy
Hey @Tritium, terrific post and I totally agree with most of it. Looking for some clarification here, and it is a question that I have been thinking about with many DAO governance systems not just Balancer’s.
Why is having delegates or “delegated entities” desired?
Will go on a bit of a diatribe now about my thinking on how I try and answer the question but if you take it a whole different direction I would be super interested in learning from your logic/thinking/process.
traditional politics, which is similarly a governing body, created delegates to represent different groups of people/interests. The easy example is the senate that gives each state equal representation. So perhaps a reason for delegates is that there are varying interests that have different economic incentives to lock up capital to participate in governance but should be given an equal say.
In companies, you certainly don’t have delegates. You have board members, though board selection and shape varies a bunch by type of company. But generally speaking the board is intended to protect really one group of people, which are the shareholders. So perhaps delegates can be created to represent economic interest of token holders.
in DAOs, and this is a gross generalization that deserves more nuance, it often seems like delegates are either participation shields (you vote so I don’t have the liability) or participation stat padding to say that there is high governance participation/representation as measured by percent of tokens participating. I don’t find either of these good reasons to incentivize delegates, though I am open to arguments as to why it is in fact worthwhile.
taking these historical examples, my main takeaway is that delegates are an answer to a need (equal representation, or aligned economic interests, watchdogs, etc) rather than a need in and of themselves. So applying that to why might a DAO want/need delegates, I have not figured a good answer to what problem they solve, and the answers I have heard are not convincing. I must admit my bias that adding political layers to any organization is negative and brings friction, so my bar for the value that the layer of friction brings is very high. Always trade-offs, innit?
Note: an assumption of mine here in the weighted voting is that Aura would vote abstain for the percent of vlAURA votes that do not participate or choose abstain (otherwise the need for other factions to counter the power of Aura makes more sense).
TL;DR: Cuz we have 5-20 BIPs a week and it’s almost a full time job to do a good job assessing each one of them. We want smart and engaged people making good decisions. Not populist masses reacting on emotion. I think this is very clear from looking at the state of global politics today
The problems I see with traditional polittics politics are:
1: People have long terms with long timeframes, their delegates can’t all bail on them cuz their being an asshole/making bad decisions. They’re not constantly focused on their delegates desires, just making a story every election cycle.
2: They are governing culture and society and a lot of human stuff, and can’t be super technical/data driven in their nature. I think in the case of DeFi and even pure economic policy, it is much easier to evaluate decisions against each other in a way that is at least somewhat qualitative.
I could, and have, write an entire research paper on this. TL;DR:
Over the last 50 years stock market has gone from reasonably long-term thinking to super short-termist mostly focused on quarterly results, or even day trading or quant trading.
Board members are supposed to be responsible for long term stuff.
Most of the shares that aren’t owned by “the team” are flying around so fast no one gives a shit. As a result, generally corporate boards tend to be selected by the leadership and then mostly rubber stamp shit and advise a little. veBAL type models prevent this dynamic(or can if there is enough reason for anyone but the team to lock).
Yeah. I have seen way too much of that and it makes me sad. As I said above, that’s why I ended up at Balancer. I really don’t think that is going on too much here. I think there was an honest realisation that an internal team making decisions about emissions was too detached from reality and there was a desire to source decision making from the Developers and Users participate in the protocol. Certainly, since then, lawyers have gotten involved and the legal context around us has changed a lot leading to questions about how we can structure this to prevent individuals from getting singled out by “the man.”
I think the reality is more that in the end the decisions that need to get made are quite complicated and often inter-related, and it works better when a handful people or well coordinated groups are making them. What you generally tend to see (in DeFI) is the team/devs having a decent amount of tokens and doing most of the voting (no one else really knows how to vote and trusts them), or just very little governance.
The problem is, if you do very little governance, your dev team becomes an ecochamber, and governance is ghost town. You have no Idea what kind of decision making process will ensue and if the results will be sensible and rational, or populist and toxic(ehem sushi). If you do a lot of governance, then it’s too much for most people to handle/want to spend their lives thinking about and again often times populism.
I think what we want is smart people (a manageable number of them at best) who represent our tokenholders, ecosystem devs(everyone building and building on Balancer) and userbase working together to define the best direction forward for the DAO through policies around how the treasury is spent and management of our emissions/gov token inflation.
Governance also needs to approve protocol changes, this is also a complex area that requires quite a bit of time and engagement to understand and make good decisions around. In this case I think various contributors around Balancer do a pretty good job of making sane and safe decisions about protocol changes, and documenting them for governance approve before executing on-chain.
I think we also want to be as transparent as possible, and make sure that people who want to look into the DAO and understand how it’s operating can do so in a thorough and complete way. We do need to make sure that this whole process can happen without distracting all the engineers who really need to do focused work that doesn’t involve governance too much too often.
I think we come to slightly different conclusions. Mine is more focused on building a meritocracy where those who make decisions are accountable to those who suffer them, and where their power base can shift very quickly if someone is not doing a good job at representing the voters who trusted them with their decision making power… This is something new that web3 enables.
I think we have to wait for an AIP to get details on what the Aura crowd is thinking here. IMO it’s not a problem for them to amplify their votes (vote with all votes even if it’s not 1/1). It’s probably a good point that there could be an explicit option to abstain for Aura voters, which translate to an abstain vote on the balancer snapshot with their share of the veBAL for a given vote. That’s something to talk about when the AIP comes up.
I think the goal here is to build a number of influential delegates along side Aura to also be very active in governance, not just to “counter their power.” A DAO needs many masters, but not a populist mass. You sound like you’d be a good delegate ser.
The current discussion is quite interesting: seeing the opinion of everybody on this topic is refreshing and, as expected, when we talk about governance at a high level, we start to discuss democracy, CDA best practices, and other ways to find a way to efficiently express the opinion of the majority also through “representatives” that ideally are well informed on contexts and facts to cast a conscious vote. It’s refreshing because it is what crypto should be.
That said, we support the idea of letting wrappers, in general, be able to split their vote if that is the will of the voters. In the end, every Liquid Staked Derivative’s function is to present the propriety of the underlying asset while not being bound by the same limits. So, if a veBal wrapper lets you trade a representation of the coin and enjoy the corresponding yield while also being able not to lock it for years and sell only a portion, at the same time, the governance propriety should let you be able to vote on any proposal partially.
In this sense, studying the history of the Balancer and Aura ecosystem, we can see that in the past, an effort was done to consolidate the voting power of Aura.
It’s understandable that, after some time, conditions change, new information arises, and it might be wise to adapt. In this sense, we see returning to the situation expressed in the BIP-112 as the best outcome: it will keep the system simple, elastic, and still easy to adapt further in future if needed.
I wonder if Democracy is the right word to use to explain a system whereby people vote(or delegate) based the number of gov tokens they control.
Doesn’t democracy, or at least modern, liberal democracy describe a government of the people, and kind of means 1 person/1 vote?
Even older democracies(greek and roman) that didn’t consider many of the people as people, still were based on 1 person 1 vote for those who were. Maybe I need a history lesson.
DAOs are more like an aristocracy where those who have the most get more influence. I guess there are some democratic processes used for this body to decide things, but it’s a stretch to call DAO Governance a democratic body.
I think that’s where the Curve/Balancer War term came from ;). Houses(DAOs and whales) in competition for for power and control (gov tokens).
to echo the sentiments above, this is a delightful discussion! Really important and interesting stuff, with open minds and interesting perspectives.
@Tritium, thank you very much for the quick and in depth reply.
A big problem with token-based governance is the pay-to-play nature. So this is a good argument for delegates, imo, as anyone can show up and say “let me show you what I can do, and if you like it you can delegate.” So no capital is required.
Not all the way there for me, but you certainly did make progress!