[Proposal] Governance Process Revamp 2.0


Almost four months ago, Balancer’s governance process was formally overhauled and handed off to the DAO through this proposal. Overall I would argue the revamp did increase the transparency and effectiveness of our governance process but some critical problems have become clear to me lately.

The ultimate authority of our governance process is BAL token holders. Currently, in order for a proposal to proceed for a vote it must have a majority of the Gov Council signal that the proposal has reached “soft consensus in the community”. Ballers and DAO contributors represent the majority of active community members. It’s not a stretch to imagine a scenario where large token holders support a proposal but the Ballers/active community do not. We have created a system where the Gov Council acts as gatekeepers with full control over what proceeds to a vote and what doesn’t.

Thus, I would make the argument that “soft consensus in the community” should NOT be a factor when considering a proposal to move forward to a vote. We must avoid the situation where core DAO contributors are against a proposal that has large token holder support, and that proposal does not proceed to a vote because it lacks “soft consensus in the community”.


The Gov Council will remain in place and their approval will still be required for a proposal to move to a vote. However, they will not vote on whether “soft consensus in the community” has been reached. Instead, the question will be “Is this a well defined proposal?”

What is the criteria for a “well defined” proposal?

  • Includes a “Motivation”, “Specification”, and if applicable a “Risks” section
  • If on-chain execution from the DAO Multisig is required, the “Specification” section must contain transaction details (address to send funds to, contract to interact with/function to call, etc)
  • The intent of the proposal must be clear (not spam)
  • BAL token holders must have the power to implement the proposal
    • Example: A proposal is made to deposit the FEI in our treasury into a new degen farm. As part of the subDAO formation proposal, the power to farm was delegated to the Treasury subDAO. BAL token holders cannot vote on how we farm with non-BAL treasury assets, so this proposal would not proceed to a vote. However, a proposal to remove the power to farm from the Treasury subDAO is within the scope of BAL token holders. If this proposal passes successfully, then the proposal to farm with FEI could go to a vote.
    • Example: A proposal is made to deploy Balancer to Optimism. Balancer Labs has sole discretion over core protocol development. BAL token holders do not have the power to compel Balancer Labs to act. It is solely the choice of Balancer Labs to create an official deployment of Balancer on Optimism, or not. Thus, this proposal would not proceed to a vote as BAL token holders lack the power to implement it.
    • Example: A proposal is made to deposit 100k BAL to Aave to earn a yield. BAL token holders have the power to allocate BAL held in the treasury, so as long as the other criteria for a “well defined” proposal are met, this would proceed to a vote.

If the Gov Council fails to execute their duties in good faith and votes against a “well defined” proposal proceeding to a vote, a proposal to replace the Gov Council with a different mechanism should be made ASAP.

Finally, this proposal would also implement a required minimum quorum of 100k BAL. Any snapshot vote that does not reach 100k total BAL voted AND at least 51% voting in favor would be considered to fail.

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I’ve been racking my brain about this proposal, but ultimately I think that it further aligns governance to a decentralized vision. The ballers/subDAOs probably should not have full gatekeeping powers on what is voted on and they should stay within the bounds of the discretion given by BAL holders (not that anything contentious has happened to date). Those bounds can obviously change with future proposals.

It is important that well thought out proposals are constructed before being voted on as you said. I believe the true intention behind Governance 1.0 was to make sure there was some structure in place as the DAO became more formalized. I am also glad some form of quorum is being established here. Maybe a future governance model also includes a minimum BAL holding size for making formal proposals.

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That’s probably the pre-requisite to removing the Gov Council completely - setting a very high minimum BAL holding for starting a vote. It’s still not ideal to have people making a judgement call about a proposal being “well defined” or not - there is just no other good option at the moment.

Governance Process Revamp 3.0 coming soon™

I am personally against this proposal. The achievement of pure decentralisation should proceed in stages that allow the dilution of voting powers. The removal of veto authority from the council should have to take place, technically, only when the total issuance of BALs is reached (or the vast majority of token distributed).
At the moment the council plays an important transitional role to prevent a small group of token holders (nowadays less than ten) from imposing decisions or conditions on the community that undermine the long-term vision of the DAO.

In an autonomous and decentralised organisation, the large consensus mechanism plays a fundamental role for the organic growth of the Community because it allows everyone to feel empowered to participate in the decision-making process.

Potentially exposing this process to small groups of people (and remove the only counterbalancing force present today) goes against the idea of ​​community. A concept that I consider vital, especially at this early stage.

Possibly, when the vast majority of BAL tokens are issued, the Gov council may in fact be dissolved completely but I believe that pushing for this solution now, only four months after the establishment, can create more problems than benefits.

Please remember that at the moment 8 wallets hold 3M BAL tokens and snapshot votes can pass with an average of 400K BAL.


All fair.

Our governance system places BAL holders as the final authority. There is no such thing as a long term vision of the DAO that is not aligned with the vision of BAL token holders. The DAO operates at the pleasure of BAL token holders (they can choose to stop funding us anytime). I believe we should give every opportunity for token holders to express their desires so that the DAO can better serve them.

Also all fair,

But the DAO “vision” (I agree on the wrong terminology here”) should be seeking alignement of all parts and prevent malicious activities that can undermine trust towards the Organisation.

The Gov Council should work as a final guarantee that the interests of all token holders are maintained.

I def see your points, but I see this time too early to execute this proposal.

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And BTW.
There is a vision:

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I totally hear where you are coming from as the points you make align with the other side of my thinking. I have always had in the back of my mind that the current way governance and their tokens work do not always align in the best way. It would seem to make a bit more sense to spread the distribution of voting power in some way. Possibly weight it towards people that have shown interest for a long time. That way more people had an equal share of decision making power. Just because you have more money to puchase BAL and voting power doesnt mean you care about Balancer more than someone else (thinking long term here).

That being said we are looking to embark on the BAL wars where accumulation of BAL is paramount. A portion of aquired BAL will be sold for sure but some will be accumulated as well. A portion of those BAL holders will actually look to use their voting power to shape the protocol in their favor. I havent 100% decided if that is a good thing or not, in some cases it could be good and others bad, but it is how the system is set up and some people want BAL for gauge power as well as voting.

Im marginally in favor of the change because i can forsee scenarios where the gov council shouldnt necessarily be gatekeeping. I know your post is focused on protecting the protocol from a hostile takeover and concentration of voting power currently which is a real concern. Im curious to how others feel about this.


I agree with this proposal that the governance of the protocol should be handed over to BAL Holders. We cannot assume that some BAL Holders will break the protocol. After the release of vBAL, long-term holders have greater voting power, and they have no reason to break the protocol, which is also the meaning of DAO.


The Governance is already under BAL holders control.

The only issue is that today large BAL holders (only two are enough) can in fact push for votes that go against the interests of other BAL holders (a possible vast majority) that do not have enough voting power to stop such proposals.

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if two BAL holders have more voting weight (tokens) than a vast majority of other holders, it is appropriate that the desires of the two big holders win out over the vast majority. That is how our system is designed to work.

Whether that is a good thing and should be replaced, different conversation.

If without any reasonable doubt, this is the way our system has been designed to work, then why did we even establish the Gov Council on a first place only four months ago?

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Currently we lack the automated/on-chain infrastructure of something like a Compound or Uniswap, where token holders can see a proposal through from discussion to vote to implementation in a completely trustless way. The Gov Council serves as this mechanism in the interim until we move to such a system.

Initially I believed “soft community consensus” would always be aligned with the desires of token holders. The transition four months ago happened very quickly and the DAO was not what it is today back then. I think it’s clear now that there is a high chance the Gov Council will, sooner or later, gatekeep a proposal from proceeding that the majority of token holders support. I would strongly prefer to avoid such an outcome by making the change proposed here.

The inconsistency in your statement is making a difference between “soft community consensus” and “token holders”. Both represent the same entity as the community is formed only by Token holders.

Also, I do not think there has ever been a case (and probably, will be) where the Gov Council gate keep a proposal if enough support is shown on the forum.

The problem I see with this proposal is that, instead of identifying what really means Community consensus, you are proposing to strip away a mechanism of fairness and balance.

A soft consensus can be better defined by engagement: how many are participating to the discussions (high vs low participation) and what is the general sentiment (those commenting are in favour or against and so on).

That is the job you should have done. Distrusting the Gov Council by removing the powers assigned not even 4 months ago, because you are scared of political backlash I think is a mistake.

I’m also aware that apart from you and me, nobody really cares, and probably nobody really cares because the empowerment people should feel is removed as soon as the first bump on the road is spotted on the horizon.

Democracy and large consensus mechanisms are hard to manage, while delegating all powers to just a few is the easy way out to avoid trouble I suppose. The choice is ours, really.

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There is no link between participating in forum discussions and holding tokens. That’s the danger of using soft community consensus as an input to governance.

The fear isn’t that the Gov Council would gatekeep a proposal that has clear support on the forum - rather, that they would stop a proposal going to a vote because of the lack of support on the forum.

There are some projects that do take into account forum discussion when considering a proposal, and many that do not. Seems to me we would be best served by moving away from using forum discussion as the main factor to determine what goes to a vote and just let token holders (or the community if you’d rather say that) be the decision makers.

If you believe the people discussing on the forum and token holders are one and the same, then there is no reason to fear removing soft community consensus as an input. The outcome will be the same whether a proposal is stopped at the discussion phase or the vote fails.

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This is a tough discussion to have. I view the suggested change of the Gov Council as a removal of its power to it taking more of a moderating role. Removing the need for “community soft consensus” can also be interpreted as the removal of “Ballers mostly talking in Discord”.

I feel this proposal is a step towards faster (even forced?) decentralization. I am not sure how to get to proper decentralization. The proposal however in my opinion opens up a way to get to decentralization faster.

What I take away from this proposal - if it passes? - is that instead of reasoning about if “community soft consensus” has been reached, the governance voting power distribution becomes a way more important topic to work on. Heaving this proposal pass would mean, that there is an ever-lurking force for the DAO to push decentralisation forward.


Context and timing are always important.

Reality is that this proposal is directly correlated with the fear of having at least one of the Gov Council members (in this case could be me, tomorrow might be you), stopping the implementation of something that does not align with the majority of Community representatives. This has nothing to do with decentralisation per se, really. The Gov Council was what most closely represented a strong Community voting power, in a way.

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lol. Gov Council requires a majority of three out of five, there is just no possibility for one member to stop anything by themselves. Dunno what gave you the impression this was a witch hunt against you sir but certainly that is not the case and never was.

The Fei situation with another token swap and Turbo is what brought the flaws in our current system to light. It’s quite likely in my mind a proposal to do another token swap with them and a proposal to invest BAL into Turbo would easily pass a snapshot vote, but pretty much all of the Ballers are against both of these things which means no vote. Not a good system when this is a potential outcome, unless we are really taking the position that Ballers know better than token holders.

The impression comes from the fact that I was the most outspoken and the reality is that a sensible opinion of one member can overthrow the sentiment of the group. That is the risk, not me as an individual.

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I don’t know, I keep going back to one of the core reasons to why a BAL holder bought BAL in the first place which is to vote. I think we all could have opinions if things are good ideas or not, but ultimately it doesn’t matter that much (unless we have a massive stake in BAL). Technically anyone is free to make a proposal and BAL holders should have the right to vote on those things (there isn’t much chatter in these forums to be able to glean how holders are feeling, our “soft consensus” model). If any group of persons within the DAO is steering voting it signals they know what is best for Balancer. Yes it is 3 of 5, but 3 people is not that many for some of the bigger decisions. The way things are set up now seems a little business like to me. Yes it made sense early on, but at the same time if our governance was fully on chain we wouldn’t be involved at all. Are there flaws to being fully on chain, probably, but the question is which model are we looking to replicate?

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