Authorizing the CGWG to Facilitate RFPs

Authorizing the CGWG to Facilitate RFPs

Authors: Compound Governance Working Group (CGWG)

Background

In recent months, members of the Compound DAO have increasingly requested a structured Request for Proposal (RFP) process for evaluating competing initiatives. The Compound Governance WG (CGWG) has stepped in to facilitate several such RFPs on an ad-hoc basis. For example, when multiple teams proposed divergent designs for a Staked COMP mechanism, we helped launch a coordinated RFP to avoid disjointed efforts and conflicting votes for the future vote. Similarly, we organized RFPs to source the best Oracle Extractable Value solution and to evaluate options for a Voting Service Provider. These RFPs allow the DAO to compare proposals side-by-side in one framework instead of handling separate proposals in isolation.

These efforts have been in response to community needs, and we will continue to help facilitate the governance process and discussion for the DAO. Since the authority and process to run governance RFPs have not been formally defined or approved yet by the DAO, the purpose of this vote is to formalize the CGWG’s role in facilitating RFPs via a community-driven process.

The Need for a Formal RFP Framework

When multiple teams or vendors propose services with overlapping scopes, it can be challenging for delegates to make informed choices if proposals are presented at different times or with varying formats. Without a unified process, the DAO risks fragmented decision-making, “apples-to-oranges” comparisons, and potential wasted effort on conflicting initiatives. Recent examples have highlighted this challenge:

• Staked COMP: Teams like AlphaGrowth and Gauntlet independently put forward staking frameworks, each compelling yet different. Rather than let them proceed to separate votes (which could splinter community support), an RFP process intention was introduced to synchronize debate and evaluation of all stCOMP proposals in one place. The goal here is that when the time comes, the DAO could adopt a single, robust framework with broad consensus. Oracle Extractable Value (OEV): Multiple oracle providers (API3, Chainlink, RedStone, etc.) began developing solutions to recapture liquidation value for Compound. Discussions were dispersed across calls and forums. We created an RFP to aggregate these conversations into a single forum thread and invited all vendors to submit their approach under the same criteria. By doing so, the DAO can clearly compare trade-offs in latency, decentralization, revenue share, and choose one or multiple providers that best meet Compound’s needs.

• Governance Voting Interface Provider: Compound’s current primary governance UI (Tally) required renewed funding, and alternative providers expressed interest. Rather than having multiple vendors go through independent votes, the CGWG coordinated a VSP RFP at the community’s behest. This gave delegates optionality to consider other platforms side-by-side with Tally. The RFP explicitly built in a “status quo” option as well, so delegates can vote to keep an adjusted existing setup if none of the new proposals were superior.

These cases demonstrate the value of an RFP approach: it creates an “apples-to-apples” comparison of proposals, standardizes the information provided, and lets the DAO make a single coherent decision.

Goal of this Proposal

Our goal is to formally allow the CGWG to host and facilitate RFP processes for Compound DAO governance matters, under clear community oversight. By doing so, we aim to:

• Enable Fair Comparisons: Provide a structured framework where competing teams/vendors present their proposals with uniform criteria and scope, making it easier for delegates to evaluate options on merit.
• Improve Decision Quality: Avoid rushed or piecemeal decisions by aggregating alternatives in one process. This helps the DAO select the best solution (or combination of solutions) with full information, rather than whichever proposal happens to be voted on first.
• Maintain Objectivity and Neutrality: The CGWG, as a neutral facilitator, will ensure each RFP is run in a transparent and unbiased manner. All interested parties get equal opportunity to present their case, and evaluation criteria are pre-defined and public.
• Save Time and Reduce Governance Fatigue: Rather than handling multiple overlapping proposals and votes, a single RFP process with one ultimate decision point streamlines governance. This reduces the burden on delegates to track several similar proposals and prevents “vote splitting” scenarios.
• Adapt to Each Situation: Recognize that not every procurement or initiative will need an RFP, and that each situation will be different.

Proposed RFP Process Outline

If this mandate is approved, the CGWG will follow a standardized yet flexible process for future governance RFPs. While details may be tailored to each situation, the general framework would be:

1. Problem Definition & Delegate Input: In a scenario where multiple solutions or providers are vying to address a DAO need, the CGWG will discuss with the community and delegates to confirm an RFP is the right approach.

2. RFP Publication: CGWG publishes a formal RFP post on the forum, clearly labeled as such. This post will include:

   • Motivation/Background: Why the RFP is being issued and what problem we aim to solve, with context for vendors
   • Scope & Requirements: Exactly what the DAO is looking for. This section will list the deliverables or services expected, any technical or economic parameters, and the timeframe/term of the engagement.
   • Timeline & Milestones: Deadlines for proposal submissions.
   • Required Response Template: A standardized questionnaire that all proposing teams should answer to ensure comparability. This typically covers key areas such as:
     • Technical Approach & Architecture
     • Implementation Plan / Integration details
     • Security considerations (audits, risks)
     • Economic model (costs, fee structure, any revenue share)
     • Team background and experience
     • KPIs & success metrics
     • Budget and payment structure

   Teams will be asked to follow this template in their replies. Past RFPs have successfully used this approach to standardize proposals.

3. Submission Window: Interested teams/vendors submit their proposals by replying to the RFP forum post within the given timeframe.

4. Review and Due Diligence: Once the submission period ends, the CGWG will compile the proposals and coordinate any additional review needed. In previous RFPs, we have engaged domain experts like Woof and OZ to provide independent analysis of each proposal’s risks and feasibility.

5. Community Q&A (if needed): Depending on the complexity, we may host community calls or ask each team to present their proposal to the community.

6. Snapshot Vote – Selection: After vetting and discussion, the CGWG will initiate a Snapshot vote for the RFP decision. The Snapshot will present the community with the list of qualified proposals side by side in a logical manner.

7. On-Chain Execution: Following a successful Snapshot, the CGWG will help steward the result to an on-chain governance proposal following the results of the snapshot.

8. Oversight & Accountability: The CGWG will help act as an accountability body when needed to monitor the implementation of the winning proposal(s).

It’s important to note that while this outline provides structure, each RFP will be tailored to its use case. The CGWG will apply the above framework with good judgment, ensuring we balance thoroughness with efficiency.

Coordination with Foundation (& Future Entities)

This vote does not make the CGWG the sole team authorized to host governance RFPs on behalf of the DAO in the future. Simply, it allows the CGWG to formalize the prior RFPs and help on future initiatives when relevant, as well as establish a proper RFP process for the DAO going forward.

If future entities such as the Foundation want to host RFPs as well, we will work closely with them if needed to present the best options to the DAO. Again, the CGWG is not made exclusive in facilitating RFPs but is formally empowered to operate this process for any DAO-aligned need when relevant.