Distributed Governance Report: #2
Featuring governance updates on Tezos, Cosmos, & MakerDAO
DGR is a monthly newsletter aiming to interpret the complex world of distributed network governance, politics, and power.
Editor’s Note
Now more than ever, as markets and crypto ecosystems encounter times of extreme turbulence, stress, and turmoil, it is crucial for tokenholders to understand and engage with governance processes in a meaningful way. Stakeholder engagement could prove to be the biggest factor in building and strengthening the resiliency of a network, and what better way to stay informed than to sign up for this newsletter!
With that being said… I hope everyone is staying safe in these crazy times. I’m ecstatic to welcome Adrian as the newest contributor to the newsletter: “Greetings from the MakerDAO ecosystem. My name is Adrian Hacker, and I contribute to the MakerDAO platform as a community development and governance participant. I report back to the governance community a weekly summary of events as well as work with the governance community around public relations issues.
MakerDAO consists of the MakerDAO Foundation, Governance, and the Community. These are the major stakeholders - to further clarify the roles of these stakeholders:
The Foundation is the business organization that created MakerDAO and is incrementally handing off the operations to governance.
Governance is the community of persons that hold a token known as Maker. A Maker holder can create, vote upon, and implement by sufficient vote, MakerDAO systemwide policy.
Community are individuals that participate in the financial products offered by MakerDAO or an organization offering a Dai third-party derivative.
There is a lot to know about MakerDAO and how it works. To learn further about MakerDAO check out MakerDAO.com or visit Awesome MakerDAO”
🔦 Spotlight: News & Highlights
Ethereum Classic Collective Board Member Resigns, Withdraws $ Support: A board member of the Ethereum Classic Cooperative has resigned: The board member, James Wo, said his resignation is due to disagreement with the organization’s executive director Bob Summerwill. Celia Wan for The Block
Enigma Community Passes a Community Fee Change Proposal on Mainnet: Proposal 5 dramatically increases the community tax, from 2% to 75%, allowing for more funding of community spend proposals.
Steem Community Hard Forks to Expel Justin Sun’s Steemit: The Steem community planned a hard fork to remove Justin Sun’s Steemit Inc. The hard fork resulted in a new blockchain called Hive. “The initial Hive launch will be a direct copy of existing blockchain with a few small upgrades”. From Yogita Khatri for The Block
Logan Saether walks through the Democracy pallet of Substrate: The Democracy pallet is one of the core pieces of on-chain governance and the most relevant to the public token holder. Besides voting, it also contains logic for how to delegate a vote or create a proxy voting account.
Full Control of the Maker Token turned over to Governance: The Maker Foundation is pleased to announce that the transfer of MKR token control from it to the Maker governance community is now complete. The MKR token contract is now 100% in control of MKR holders. With MKR holders now in full control of that contract, decentralized governance is the only avenue for changing MKR token authorizations.
📚 Goodreads
Ethereum Protocol Governance and Network Upgrade Coordination: This post will discuss how protocol level development decisions are made as well as how Ethereum network upgrades are organized. From Hudson Jameson
Autonocrats and Anthropocrats: The most important political debate of our generation has nothing to do with Democrats or Republicans. From Lane Rettig for etherean.org
🌶️ MakerDAO’s Problems Are a Textbook Case of Governance Failure: Founding teams don’t want to contemplate that their projects might be faced with crises and might need to have levers to intervene rapidly. From Cathy Barrera for Coindesk
Ren’s Plans for Decentralized Governance: Interview with Loong Wang: “You have the REN token and so many projects in the space are launching their own token-based governance processes. Are you thinking about doing the same? And, and also what is the level of control that the team has over the project?” Camila Russo asking for her DeFi newsletter, The Defiant
On Power — A Brief Overture: The importance of understanding power dynamics in the blockchain space is quite understated. With recent struggles in the Steem community, IOTA community, and even the Ethereum community, it’s becoming abundantly clear that power structures in decentralized systems are ill-defined. From Rocco for his Medium Blog
🌐 Network Governance Updates
Governing Tezos
🗳️ Live Votes and Proposals
🔁 No Proposals Submitted to Governance Cycle 26: The system reset on March 28th, initiating a new proposal period. This will continue to occur until a proposal receives enough support to move to the Exploration Phase.
🗣️ Signaling: Discussions and Community
Bakers Are Not Protocol Politicians: Proposing a unique way of achieving maximum representation within the community by embodying a role for a Protocol Politician in the governance process without any protocol change. From Blockswap for their Medium Blog. Discussed on the Agora Forum.
⏩ Looking to the Future:
Protocol 007 Virtual Meetup: Tezos 007 is estimated for the summer of 2020. Possible features include sapling integration, stateful baking accounts, environment upgrade, crypto additions, secure randomness, governance, meta transactions & Michelson – @adrian_brink at the @TezosBerlin Meetup
AMA - Sapling integration in Tezos: Nomadic Labs hosted an AMA on the Agora Forum on the 26th of March. Check out the discussion and questions regarding the integration of Sapling in Tezos and other related topics. Nomadic Labs on the Agora Forum.
📅 Calendar
The new Proposal Phase will end on ~April 20th, 2020
👥 Major Stakeholders
Governing Cosmos
From Gavin at Figment Networks
🔁 No Proposals Submitted: While no one has submitted a proposal since Prop23 in January 2020, there are a number of people using new documentation created by the Governance Working Group to draft one. Beyond the Cosmos Hub itself, the broader Cosmos ecosystem will potentially benefit from these docs as well–Althea and Enigma are two Cosmos-based projects that have begun exploring these for their networks.
📄 Draft Proposals
Proportional Slashing: The Cosmos Governance Working Group has been providing feedback to Sunny (All in Bits; Sikka) for his initial draft proposal for changing how Cosmos Hub slashing works.
The Cosmos Governance working group just release their parameter-change documentation for more fluid governance proposal coordination & resolution
🗣️ Signaling: Discussions and Community
GWG Month 3 (March) community call: The third month-end Cosmos GWG community call took place on Mar 31, 2020, at 15:00 UTC with 12 people. All notes, recordings, and future call agendas can be found here.
Mid-Month Topic Call: This short call discussed connecting the Cosmos Hub’s governance mechanism to a dedicated legal entity. Zaki (Iqlusion) led the conversation about his work to create such a legal entity, one that gives legal rights to token-holders.
How should the Cosmos Hub’s codebase be owned and controlled? Perhaps the location and ownership of the Cosmos Hub’s codebase could be something dictated by the outcome of a governance proposal.
👥 Major Stakeholders
Governing MakerDAO
🗞️ Recent News
Full Control of the Maker Token turned over to Governance: Until recently, only the foundation was able to mint or burn Maker token. This last week the full authority of minting and burning the Maker token was transferred to the governance community to control. Read More…
Beyond Holding MKR: The Foundation discusses the responsibility of decentralized MakerDAO Governance voting and how over the next three months, they will engage the community in several important governance discussions around decentralization.
New Collateral Type Added: USDC - Maker holders approved the addition of the USDC stable coin as a new collateral type.
🗳️ Live Votes and Proposals
Executive votes are continuous: a vote will remain open until enough votes are reached for implementation. These votes often consist of evaluation and adjustments of monetary policy. Learn about how an issue becomes an Executive Vote.
Governing Proposal: Adjust Multiple Risk Parameters - The proposal lowers the USDC Stability Fee from 20% to 16% and lowers the Dai ETH Debt Ceiling by 10 million to 90 million Dai
✅ Passed on Mar 30, 2020, with 69,685.84 MKR
New Proposal: Adjust Multiple Risk Parameters - The proposal lowers the USDC Stability Fee to 12%, raises the Sai Stability Fee to 8%, and lowers the Sai to Dai migration Debt Ceiling to 0.
⬆️ 51,689.42 MKR needed to pass
Polling issues are often monetary policy issues with the occasional policy or procedural change.
Live Polls ⏰ ~2 days left to vote
Dai Stability Fee Adjustment: 0%-4.5%
Sai Stability Fee adjustment: 3.5%-11.5%
USDC Stability Fee adjustment: 12%-20%
Vault Compensation - signal whether to move ahead with a plan to provide compensation to vault holders
Add IRV Ranked Choice Voting
🗣️ Signaling: Discussions and Community
ℹ️ Signaling begins in the MakerDAO Forum. If issues gain traction they are moved on to an on-chain poll where Maker holders vote to gain a soft consensus. Weekly governance and risk calls are held to discuss and debate these forum issues as well as anything from the foundation that would require governance approval.
Governance Public Relations: Following the high profile events of the last month, the governance community has identified the need for a framework around authoritative DAO communications. Competent, accessible, consistent, and factual communication has been identified as a necessity by MakerDAO governance.
Technical Bug Causes Debt Auctions to Hang: A bug was discovered in the smart contract for debt auctions, which is considered minor. This bug was able to be overridden by a governance spell being initiated and activated by vote.
Emergency Shutdown Consortium Being Formed: The governance community has an emergency shutdown option available that will halt and freeze the operation of the entire system in the event of an unforeseen extreme event.
SCD (Sai) Shutdown: The governance community is preparing to shut down and reconcile the global supply of single collateral Dai (Sai) in the upcoming months. Technical considerations and procedures have been presented in a draft form.
📅 Calendar & Meetings
This link will take you to the official MakerDAO community event calendar.
Community Meeting - Tuesdays at 9:00 am PST: Meeting themes include:
Recent and upcoming events
Answer general questions
Interview new team members
Chat with special guests
Demo new releases
Governance & Risk Meeting - Thursdays at 9:00 am PST: Meeting themes:
Establish some base principles around Governance and Risk: what is, how it works, etc.
Discuss the latest documents published by the Risk team
Explore use-cases of specific aspects of the framework
Introduce industry experts
A Quick Disclosure:
From Adrian: In the age of information literacy and liability allow me to do some quick legalese housekeeping.
I will be contributing to the Distributed Governance Report the happenings of MakerDAO governance. Unless otherwise specified, I am not the direct authoritative voice of MakerDAO Governance as a whole. My thoughts and opinions are my own and may not necessarily reflect that of the entire Governance Community. I do have other governance members QA my writing. I do strive to keep my writing free of editorial opinion and 100% fact-based unless otherwise noted. I am not a MakerDAO foundation member, therefore, the statements made by me do not reflect that of the MakerDAO foundation. All of that being said, the Governance and Foundation community, thus far, has seemed pleased with my journalistic methods.
The Distributed Governance Report is a monthly newsletter aiming to decipher the complex world of distributed network governance, politics, and power. Stay tuned for the next one coming in May by subscribing now, and never miss an issue: