Improving DAO Governance & CM Compensation

Summary

The current structure for Minswap DAO Governance can be seen in the Docs. As the Minswap DAO grows and evolves, the Governance structure must improve as well. This includes rewarding those who help grow the platform and foster the community such as contributors and Community Managers. In this Proposal, we propose a series of changes to improve the current Governance Structure.

The changes proposed aim to address the following:

  1. Restructure how a Proposal can get on chain.

  2. Restructure rules around the Quorum.

  3. Lay out the responsibilities and payment structure/budget for Minswap CMs.

In addition, the following items are not part of this proposal but we would like to commence discussing them here. If the feedback is positive, they would eventually turn into Proposals of their own.

  1. Extra Governance power for $MIN stakers who stake for longer (boost).

  2. Start of a contributors program to remunerate those members who contribute through labor to the DAO.

1)) Restructure how a Proposal can get on chain

Currently DAO members have expressed concerns around the Forum process. We propose the following 3 step process:

  1. Temperature Check Discussion: Any user can create and submit one on the Minswap Forum. The idea will then be reviewed by Moderators and community members for feedback and discussion.
  2. Temperature Check Poll: In the Temp Check Section, a Poll must be created with the Options “Yes or “No”. The Poll may be voted on for 5 days. If it garners at least 20 votes and the majority is yes, the Proposal may proceed to Step 3.
  3. On-chain Proposal: Can be submitted after a successful Temperature Check, and must be materially similar to the Temperature Check. To submit a Proposal, 10,000 MIN must be submitted and will be returned if the Proposal is successful.

The Minswap Forum would have to be updated to accommodate this new structure. This process is similar to what Indigo DAO has successfully implemented. More details around this process and guiding principles can be found in the following document.

2)) Clarify rules around the Quorum and increase it to 8%

The Quorum has stayed at 40 mn $MIN for the latest Proposals since this was 5% of the circulating supply at the time Voting started.

The Quorum should instead be Dynamic, and change according to circulating supply. We propose increasing it from 5% to 8% given the increase in circulating supply since the Quorum was first established and initiatives such as the burn.

Currently the circulating supply is around 1.04bn $MIN, and as such Quorum should be adjusted to 80mn $MIN. Quorum should be adjusted as circulating supply increases.

3)) Lay out the responsibilities and compensation structure/budget for Minswap CMs

Minswap Community Managers are an essential component to assure users of the protocol are always protected as much as possible and make the platform better to use. Below, we list the responsibilities and our proposed compensation structure.

The responsibilities of Minswap Community Managers are to be the following:

  • Provide assistance in Discord tickets, identifying issues and alerting the Minswap Labs team if they deem it is necessary.
  • Protect against scam or phishing attempts in the Minswap Discord by banning and deleting scam messages.
  • Moderate the Discord (giving timeouts when necessary, encouraging healthy and respectful discussions, kindly guiding newcomers through the experience of using Minswap…)
  • Moderate the Minswap Forum, providing assistance and feedback on Proposals.

Minswap Community Managers have thus far been compensated by Minswap Labs. As the DAO Treasury grows and given CMs are stewards of the community, it’s a natural step that the DAO takes over the responsibility of compensation. We Propose the following compensation structure:

  • Monthly Compensation is to have 3 Tiers:
  1. A Tier to be compensated with 150$ per month and 4,000 MIN (worth about 150$ at current price) - 1 CM is eligible
  2. B Tier to be compensated with 100$ per month and 2,700 MIN (worth about 100$ at current price) - 2 CMs are eligible
  3. C Tier to be compensated with 50$ per month and 1,400 MIN (worth about 50$ at current price) - 2 CMs are eligible

Scoring of CM performance will be done by Minswap Labs. The compensation is to be done both in $ADA and in $MIN. Compensation will be done quarterly and take the average USD value of the last day of the month. DAO Treasury Funds are to be used for it. A CM may have the option to decline compensation and his part goes to the rest.

The current Community Managers who will be eligible:

  • Spock
  • GT
  • Amir
  • Adabucks
  • Alfa

Performance will be reviewed quarterly and if the community or Minswap Labs deems one of the CMs isn’t performing to the best standard, they may be removed and substituted.

Additional Discussion

(the following items are not part of this proposal but we would like to commence discussing them here. If the feedback is positive, they would eventually turn into Proposals of their own).

1)) Extra Governance power for $MIN stakers who stake for longer (boost)

To enhance Minswap’s governance model with a focus on rewarding long-term perspective and substantial participation, this proposed solution outlines a methodology for assigning voting power to MIN token stakeholders, potentially including MIN/ADA and MIN/stablecoin LPs. The core idea hinges on ensuring that voting power is reflective of a user’s engagement and investment within the Minswap ecosystem.

The determination of boosted voting power would be based on three pivotal factors:

  1. The Quantity of MIN Staked or Farmed
  2. The Duration of Staking or Farming
  3. The Applicable Staking Tier

Addressing the potential for manipulation of the system, such as increasing stakes or farming inputs just before a vote, the solution incorporates a mechanism that leverages accrued ADA (or MIN and ADA for farmers) at the moment of a governance vote snapshot. It proposes using the accrued rewards at the time of voting, converting them to an equivalent MIN voting power. This calculation would be based on the MIN/ADA pair value sourced from a reliable data point at the snapshot time.

2)) Start of a Contributors Program to remunerate those members who contribute through labor to the DAO

In a subsequent Proposal, we would like to propose a Contributors Program to utilize the DAO Treasury by hiring prominent community members on a freelance basis to add value to the Minswap ecosystem.

There are many ways in which Contributors could add value, such as:

  • Social Media Minswap Ambassadors: the @MinswapDEX account is currently mostly focused on significant updates and announcements. However, there could be value added in a more light-hearted account that engages with the community more. We have been experimenting with the last months with the Minswap Intern account.

  • Video content: there are some very talented Cardano focused video content producers. In the past, Minswap Labs has worked with Pete, for explanation videos and updates such as for the 2023: A Year In Review. As Cardano grows and more people look for resources on interacting with DeFi, it’s worthwhile to invest in the Minswap DEX youtube channel with those resources and more.

  • Thread Content: while some people prefer audio and video content, insightful threads are a common way to lay out thesis and data in web3. Cardano has many talented accounts who could be highlighting updates and presenting data on the Minswap ecosystem.

  • Emissions and Data Analytics: there is currently an Emissions committee with 5 community members (and 1 Minswap Labs) which decides bi-weekly on the Emissions adjustment. A MIN-based compensation would be a good incentive for the committee members for producing further analysis, being more aligned with MIN holders and dedicating more time to it.

Authors: PurritoGeneral , Ch!cken , CWSchub

Should the Vote go on-chain?

  • Yes
  • No
0 voters
5 Likes

Overall looks good to me. With the amount of circulating $MIN increasing and for the DAO to function properly, it certainly doesn’t hurt to increase the quorum to 8%, which still shouldn’t be hard to reach on good proposals.

Incentivizing staking with additional governance power seems sensible as well, this also avoid people purchasing bulk voting power just before a vote that might financially impact them, and at the same time reward long term supporters/users. Updoot on that one :slight_smile:

Using the Twitter for more visibility, educational and analytical content seems great. I would hope it doesn’t turn into a meme posting page, which I’ve seen done by other brands in the space. While it might be likeable, a DEX / the service(s) provided is pretty serious, I would expect that to be reflected in the ‘branding’ of external communications.

5 Likes

I think it should be noted that if the vote fails, the 10,000 MIN gets sent to the dao treasury as explained further in the doc.

I also would like to see if there is any feedback on 3 things.

  1. Is the temp check quorum too low? Or is it fine? Pls think about voter fatigue vs low barrier to entry, but if onchain quorum isn’t met then treasury grows.

  2. Should contributors be rewarded in MIN or the ADA from the treasury? That way it avoids the risk of voluntary sell pressure on MIN.

  3. Can we also explore MIN voting power delegation? I personally may not have time to vote on all of them, or maybe we can provide proposees the option to lock up additional “tip” min that is distributed as an incentive to vote (regardless of vote cast) on their proposal.

1 input I would like to propose for when the relevant governance portal is up is that we should have a smart contract defined so that users can send the MIN to a handle like $MINVOTE or something like that which automatically sends it to the treasury if the vote is not passed or returns it and handles the minimum criteria requirements for the vote. This would shift the burden of the onchain vote from CMs and Minswap Labs to the chain itself.

I only imagine Minswap community growing exponentially and we must automate as much as possible where we can.

2 Likes
  1. i think its better to have a fixed usd amount of min for submitting a proposal
    some might say that its ok and it should change based on the value of the project but i think the token doesn’t necessarily reflect the projects value

  2. glad to see quorum getting adjusted, it definitely was needed considering the voting volume on the last few proposals

  3. i strongly agree with @mezuny on that the twitter must not turn into a meme posting page, it should stay serious and professional, other than that threads can be really good in a high load scenario where a lot of users don’t know what they are actually doing

4 Likes
  1. i’d prefer a fixed amount on USD for this and not MIN because as we speak 10k MIN might be a small amount but in the future this may change.
  2. great :vulcan_salute:
  3. i would like the option for a CM to decline being compensated and his compensation return to DAO

On the additional discussion i only have to say yes please on both options!

2 Likes

When we start talking about routing governance through the forum, I just wonder how wide open that makes things. Does that imply that you don’t even have to own a single MIN to get a proposal going (at least up to the point in the process requiring the 10k fee)? Are there any controls to keep one person from having 20 alt accounts so that they can just guarantee they’ll meet the vote threshold?

I’m not sure I understand the temperature check discussion step, is it just a formality? Is there any criteria that has to be met during this stage or can literally everything advance to the poll?

I guess I’d sum up my concerns by saying that I’m worried about abuse. I think the 10,000 MIN fee certainly helps mitigate that, but I think we should consider other guardrails.

Perhaps, “to submit a proposal, one must be a member in good standing of the Minswap discord having joined at least 1 month prior to submitting a forum proposal.” Someone banned from discord would effectively be blocked from initiating proposals. (I don’t see this being used except in extreme cases, but at least it puts some mechanism in place to address abuse)

3 Likes

I also wonder about requirements in the linked document like “ You must remain engaged with the discussion”.

What are the actual expectations here and how is it enforced? Look at this very proposal as an example. Where is the active engagement of the authors?

4 Likes

@GT1 I agree with you on this. I think there has to be a criteria set such as the account must be a part of the Minswap forum for X amount of time before even initiating a temp check (to my knowledge this can be done and permissions set through an admin account on the forum). @PurritoGeneral this is a very valid point GT made here. Imagine 100s of proposals a day from accounts. It would be fatigue for mods and cms.

As for your second comment, I guess it is arbitrary and meant to remain open for interpretation. If you want your proposal to have a higher chance of passing and not losing your deposit, then it is probably best to be more involved. Atleast that is how I understood it.

1 Like

I’m pretty sure that the majority of people disagree with me, but I’d go a completely different direction with the governance thing. I’d do something like an on chain election to elect 7 people to a governing committee. Paid positions with like 1 year terms and a set of rules about who is eligible. and that committee would be empowered to run things, with a mechanism in place for there to be an onchain vote on proposals that originate in the community. Something like 1 of the 7 have to agree to sponsor any onchain vote.

So then, let’s look at the “change the quorum” proposal as an example. That originates within the committee and they themselves vote 5-2 and pass it so it goes into effect. Joe_community dislikes it strongly though. He makes a proposal in the forum to rescind or change what the committee passed. 1 of the 7 has to agree to sponsor his counterproposal and if they do then that counterproposal goes onchain for a vote and the onchain vote is the final rule, so it can override whatever the committee decides.

Same thing for any original proposal from the community. Jane_community wants to double the fee switch. She has to convince 1 of the 7 to sponsor her proposal, and if they agree it gets an onchain vote. And if nobody will sponsor it and that causes community outrage, the solution is to vote out the members of the committee when their term expires.

3 Likes

Personally, not a fan of it. Sometimes the people drafting proposals will be users who aren’t as active in governance. Making them wait a whole month to post the proposal if they haven’t created an account before seems like gatekeeping too much.

Regarding the other concern. No matter the amount of measures we take, the forum will never be bullet proof. That’s also not the intention. This is decentralized governance after all, and the on-chain vote should and will always have the final vote.

In my opinion, I wouldnt change anything. But I’ll let @Ch_cken and CWSchub chime in with their thoughts as to if the Proposal should be adapted to accomodate this.

4 Likes

I think we keep the proposal as is. The forums may get a little crazy, but it is true. The on chain vote will have final say and quorum is a healthy 8% of circulating supply. People will be able to get votes passed here, sure. But on chain tells the real story and if they fail there then their deposit goes to the treasury.

Also I think that we should keep it at 10,000 min and not a dollar amount. As the ecosystem and and protocol goes, I think putting up a proposal should be taken just as seriously. You don’t see NVIDIA setting an x dollar fee to put up a shareholder vote.

Of course another vote can be passed in the future to alter this, but I think if the price of min goes much higher then it would promote a healthy mechanism where groups of people pool money for the proposal and will have to agree within themselves before contributing to the deposit. So it would automatically create a more informal step even before the forum.

1 Like

For an on chain vote, is this 1 proposal or 3? I.e. will we be able to vote on chain for each individually or is it yes/no on the 3 as a package.

2 Likes

As it is being proposed currently it encompasses al 3

3 Likes

Changing the DAO governance structure and paying people for social media activity should be formulated and voted on in two separate proposals.

3 Likes

While I understand its not the common practice to include 3 measures in 1 proposal, their impact doesn’t seem enough to warrant separating each into one (this can be seen form the relatively low discussion it has generated in the forum, on X, and the low number of votes on the Poll). Its about redefining and improving the DAO structure according to feedback the community has been giving over the last few months.

We have a myriad of Proposals being worked on (Adding MIN/ADA Liquidity on Lenfi V2, Liqwid DAO Treasury swap, Minswap V2 fee structure, etc.), and working on each of these issues and presenting a separate proposal for each would drain valuable time from the contributors. Anyone is free to submit a counter Proposal that addresses one or each of the points discussed here separately.

I dont like the comment that seems to dismiss the work CMs do and have done. They do not just “post on social media”, they take on the great work that is dealing with the community and users directly so that Minswap Labs can focus on product development and other tasks. A large part of this work is not visible, as its in tickets that we keep private for the safety of users.

3 Likes

Agreed, feels like there’s too much different aspects to this proposal where it could fail / pass due to some major factors being favored by voters, basically ‘sneaking in’ additional unrelated changes.

Extra governance power for $MIN stakers
and
The start of a contributors program

Should be separate in my opinion. That said, with recent conversation over the past days, it feels like it might be good to take a step back and see if this proposal should be revised based on suggestions raised.

2 Likes

Why add the slashing? feels scary… I see incentives for people to vote one thing in the forum and another one in the on chain vote.

1 Like

Removes people from just spamming proposals unless they have something to lose. Indigo did it this way as well and it has its benefits :grin:

1 Like

In response to most of the queries around this proposal: Yes. Section (1) on improving the Governance process does raise many questions and presses for further details.

There is a lot to unpack (personally I think there’s TONS of stuff left to do) and I would say the main key take-aways on (1) are:

  1. Restructuring the Forum to distinguish proposals by “life-stage”.
  2. Introducing the idea of commitment to a proposal on its various stages (drafting - quality and content, discussion - involvement & adaptability to feedback).
  3. Introducing the idea of iteration, where a proposal can go back to the drawing board without having to create a new one every time.
  4. The idea of a stake (taken from other protocols) for on-chain governance.

I think this proposal is a first step towards shaping how we do Governance on Minswap and what we’re asking is whether we should go forward with these steps or not.

I must say I understand the general opinion that this proposal could be split, but seeing that most of the issues come from section (1) I would look at taking in the feedback and modifying this section in accordance with it.

2 Likes