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title: [TEMP CHECK] Defining the Service Provider & Delegation Platform Relationship author: @llamaxyz created: 2023-03-25

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Summary

This publication introduces a discussion if entities can receive payment for being both a Service Provider and Delegate Platform.

Abstract

Within the Aave ecosystem there are numerous Delegate Platforms and several Service Providers. The prospect of becoming a paid delegate has emerged and this publication seeks to define the relationship between delegate and service provider in the context of receiving payment from Aave.

At the core of the topic, should a Service Provider that offers a Delegation Platform receive additional payment for providing the Delegation Platform service. Similarly, should Delegation Platforms who progress to becoming a service provider continue to receive delegation platform payments. How could Aave remunerate delegates who offer more than governance participation. Are these mutually exclusive payments or is the same entity able to receive payment for being both a delegate and Service Provider.

As Aave does not offer payment for providing a Delegation Platform, this conversation is pre-empting a future state within the community. By having this conversation now, it will provide clear indication of the communities sentiment to be factored into various contributors future plans whilst not adversley affecting any current contributor.

Motivation

A quick summary of Delegation Platforms which are either current or proposing to become a Service Provider:

• ACI Delegation Platform
• ACI 6 Month Budget
• Llama Delegation Platform
• Llama <> Aave

At the time of writing neither of the teams mentioned above are seeking payment for being a delegate.

There are numerous delegates within the Aave ecosystem which are supportive of delegates receiving payment for the service they are offering Aave. This has been mentioned in the comments on this thread. Through passing conversations and reading over other governance threads, several current delegates are intending or considering contributing to Aave beyond participating in governance decisions.

With the emergence of the prospect for paid delegation and there already being service proviers with delegations platforms, there is the potential for Aave to provide payment to the same entity for being both Service Provider and Delegate. This publication does not present an opinion, as it affects the author, but seeks to kick start the conversation and will continue to update the post based upon community feedback.

From a budget perspective, Aave needs to consider the prospect of remunerating delegates and how this affects service providers with delegation platforms. Similarly, how would Aave reward delegates who provide a service beyond participating in governance.

To help kick start conversation, a few considerations are shared below:

• Delegation Platforms are providing a service to Aave and therefore should be considered service providers and thus rewarded for there efforts.
• Service Providers are sufficiently paid and any delegation platform should not receive additional payment.
• Delegation platforms represent an additional time commitment for Service Providers and should be consider worthy of a separate payment.
• Delegation Platforms may seek to submit AIPs and spearhead initiatives adding value beyond a voting service. Examples include supporting adoption of GHO and market marking services etc...
• AGD can be used to provide incremental payments to delegates who perform a service beyond voting participation
• Should Aave consider a potential voting delegation renumeration construct which recognises registered addresses with voting influence and how active they are within Aave governance. There are several iterations of this across the industry which can researched and tailored to suit Aave. Would this approach include or exclude Service Providers.
• Delegation Platform may build a material voting base which then enables easier transition to becoming a Service Provider.
• Service Providers require proposal power to submit AIP and the emergence of delegation platforms may lead to teams loosing proposal power preventing AIPs from being submitted. This may suggest a preference for Aave or stkAAVE holders to separate voting and proposal power delegation.

The above outlines some considerations for discussion in the comments.

Voting Options

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Option 1 - Delegate Gas Rebate Program

This option reflects the proposal outline here and no additional funding outside of this proposal is to be allocated to delegates for governance participating during the next 6 months. After the 6 month window has passed Aave DAO is then able to review this decision.

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Option 2 - Incentivised Delegates Program excluding Service Providers

@Llama shall design an Incentivised Delegate Program, which only recognised delegates are eligible for inclusion within, for the community to review and comment on. This will include a review of existing programs already implemented in the industry, with the a recommended program being published as a TEMP CHECK for the Aave DAO to review and iterate on.

Do note, Service Providers are excluded from receiving economic reward for being a recognised delegate platform.

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Option 3 - Incentivised Delegate & Service Providers including Service Providers

Similar to Option 2, with the only difference being Service Provider are to receive payment as a Recognised Delegates.

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Copyright

Copyright and related rights waived via CC0.