eIP 23: Decreasing the proposal threshold

Simple Summary

This proposal offers to decrease the proposal threshold to 500 EUL.

Motivation

On September 26 the EulerDAO approved the eIP 19: Increasing the amount of votes necessary for the proposal threshold and quorum that, among other things, set a 10K EUL proposal threshold.

Despite there were mainly no critical comments to the proposal (except for one) and it was approved, after eIP 19 came into force, the community raised concerns that the 10K threshold was too high and could affect the principle of decentralization that lies at the core of any DAO.

Moreover some expressed concerns that it could lead to discouraging participation and discussion within the community.

It was also pointed out that having a proposal threshold equal to the quorum would open up to potential governance attacks if someone creating a proposal has the option to pass it unless he/she has votes against this proposal.

Based on the concerns raised and discussions held, it was pointed out that:

• among current public delegates there is only one passing 10k threshold.
• out of 64 wallets with >10K EUL majority belongs to the EulerLabs team members or are affiliated with EulerLabs or EulerDAO investors.
• At the same time, the vast majority of wallets has <100 EUL.
• It means that other 1800 token holders, even with a delegation system in place, are unlikely to be able to reach a necessary threshold. At the same time, it is obvious that the DAO should not rely upon the team to propose and publish proposals.

There was also carried out a Comparative analysis of the threshold metrics of some popular DAOs including those representing other major DeFi credit protocols, including AAVE, Compound, Curve etc. The analysis revealed that the current threshold applied in EulerDAO is 12-14 times higher than the average among other DAOs.

If the threshold is adjusted with the average based on other DAOs it would have to be set at 700-800 EUL.

However, referring to the fact that EulerDAO is at its grassroot level compared to other DAOs from the analysis, the community highlighted that the threshold should be even smaller.

According to the survey conducted among the community members in Discord, the absolute majority advocated for setting the threshold at 500 EUL. Thus, around 20% of holders would be able to create proposals.

Benefits

• empowering more active EUL holders or delegates who want to participate in the governance, including by creating proposals on their own, to able to do so;
• increasing decentralization, which is the core value of a DAO;

Downside

• could, possibly, make the DAO more vulnerable against malicious attacks

Voting

“Yes” - Decreasing the proposal threshold to 500 EUL

“No” - Do nothing