PIP-66 - Deprecation of the Governance Committee

Authors: @Laita and @SEEDGov

Abstract:

With the introduction of WakeUp Labs’ new automated distribution system in PIP-55, the main role of GovCo is now not needed anymore. Additionally, the currently established delegate structure allows for a more trustless process for PEP approval than the one previously assigned to GovCo.

Considering the operational overhead the structure creates (5000 usd/month), we propose to remove this structure, and instead reorganize the signers of the GovCo wallet (the fee claimer wallet multisig in Ethereum).

Additionally, we propose that now Express Proposals be approved not by an internal vote of GovCo, but rather needing approval from either service providers or top delegates.

Goals & Review:

The Governance Committee was a new governing body introduced along with PSP 2.0 to control the uncertainties of a system that was highly experimental and untested in DeFi. Thanks to the introduction of the committee, it was possible to assess how the new system was doing, propose alterations during the trial period, and introduce Express Proposals as needed.

The initial framework of the GovCo, which has been updated and is therefore currently in effect, establishes that its duties are:

1. Determine whether a proposal qualifies as a PEP and publish it for a vote on Snapshot.
   • As per usual, anyone will be allowed to publish their own PEP.
   • Once the proposal is considered ready for publication by the author, they request the Governance Committee to post on Snapshot.
2. Handle the creation of the recurrent transactions needed to support PSP 2.0 operations:
3. Upgrade Module sePSP1 unstaking, withdrawing, and approval
4. Support for future manual transactions specified on their own proposals
5. Verify and sign transactions needed to support PSP 2.0 operations
6. Monitor and report potential vulnerabilities or unintended uses of the Social Escrow PSP system, and trigger Emergency Measures if necessary.

It should be noted that, with the exception of duty ‘1’, all other duties relate to the creation, verification, signing and execution of transactions and the monitoring of PSP 2.0 operations, specifically in relation to fee distribution, which are managed from the Fee Claimer Wallet multisig on the Ethereum Mainnet.

Despite the benefits that GovCo brought, the structure was meant to be a temporary centralized effort until a more trustless solution was found, which has been introduced thanks to the ‘PIP-55 - Reward Mechanism Automation’ approved last December and the development based on it that has culminated in the successful implementation of automation in the calculation and execution of the fee distribution and gas refund transactions. Now that distributions are verified by the entire DAO through oSnap, this function of GovCo is not performed anymore, so this structure has lost its main purpose.

Besides the signing of distributions, the only other role GovCo was to determine whether a proposal qualifies as a PEP proposal, according to the current framework for PEPs voted in PSP-IPΔ22: PSP 2.0. This, too, was a temporary centralized solution, and despite helping ensure that not all proposals counted as PEPs it still relied on less than 5 members to advance Express Proposals. Since then, ParaSwap DAO has advanced significantly in its delegation and participation system, allowing for a more professional set of decision makers to make these kinds of decisions.

In consequence of the above, this proposal wishes to discontinue the Governance Committee and propose an alternative for the following reasons:

1. Simplification of redundant DAO governance structures.
2. Reduction of running costs (~5k USD per month)
3. Decentralisation of decision making and verification.

Means:

The means of this proposal can be divided in the two roles that GovCo is currently taking: the ownership of the GovCo wallet and the handling of Express Proposals.

1.- GovCo wallet ownership:

We propose the following mechanism to restructure the GovCo wallet:

• Approval System: 5/8 signatures required.
• Signers: - One representative from the Foundation – Ensures alignment with the broader mission and provides continuity. - Four representatives from current DAO service providers. Specifically: * Mimic - @brunitob * Laita Labs - @Laita * WakeUp Labs - @WakeUpLabs * SEEDGov - @SEEDGov If new service providers are incorporated in the future and express interest, they may be added as multisig signers in even numbers. The signature threshold will be adjusted accordingly to maintain a similar ratio between total signers and required signatures (e.g. 7/10, 8/12, 9/14, etc.). - Three top delegates by voting power and active participation in voting and in the forum, excluding SEEDGov – Delegates will have to be existing recognised delegates with a Delegation platform established at least 30 days, with the voting power being present at the time of the designation as signer. Every three months a review will be conducted to assess the voting power and active participation of delegate signers, in order to update the signer composition if any changes occur.
• Signing Timeframe: Transactions are expected to be signed within 24 hours of creation, except in urgent cases where a shorter signing window may be required.
• Signer Commitment: All signers are expected to remain active and sign within the established timeframe. If any signer repeatedly fails to be available, steps down, or shows disinterest in fulfilling the role, the remaining signers may replace them with another active community member according to the following process: - If the signer to be removed is a DAO Service Provider, another potential new future service provider not yet onboarded may be added as a signer to maintain the same number of signers. If no other service provider is available, no replacement will be made, and the signature threshold must be adjusted to maintain a similar ratio between total signers and required signatures (e.g., 5/7, 4/6). - If the signer to be replaced is a Delegate, they will be replaced by the next Top Delegate with the highest VP avaiable who is active both in voting and on the forum.
• Compensation: No compensation is foreseen for signers, as the task requires very low dedication, appealing to a collaborative spirit to play an important role in the DAO’s operational security.

2.- Handling of Express Proposals: We propose instead for the process to be more open. Instead of requiring a closed vote by GovCo, new Express Proposals will have to be approved by either two of the existing service providers (as of the time of writing, Mimic, Laita Labs, WakeUp Labs, SEEDGov) or by 3 of the top 5 delegates.

If additional service providers are incorporated, the threshold required to approve whether a proposal qualifies as a PEP will increase by one for every two new service providers (e.g., 3 of 6, 4 of 8, etc.).

Delegates will have to be existing recognised delegates with a Delegation platform established at least 30 days, with the voting power being present at the time of proposal creation in the forums, and active participation in voting and in the forum.

As GovCo’s role has not been needed since the last WakeUp distribution, we also formalise that Epoch 30th will be the last compensated Epoch for GovCo.

Implementation Overview:

1. Immediate GovCo deprecation.
2. Replacement of GovCo signers for the new stakeholders above mentioned, subject to their acceptance.
3. Communication to GovCo members of the latest proposal, were it to pass.
4. Distribution of final GovCo payment.

Time of Implementation:

The proposal will be implemented immediately after its passing.

Budget:

The current proposal does not require a budget, and instead would free the DAO of a 5k USD a month commitment.

Risk Assessment:

We believe this proposal represents meaningful progress in decentralizing both the operations of the DAO’s Fee Claimer Wallet on Ethereum, currently managed by GovCo, and the approval process for determining which proposals qualify as PEPs.

The only major concern we can see from this new proposal comes from the Express Proposal decision, although the proposed mechanism which provides for two variants of approval allows for flexibility and speed in decisions. We remain open for alternative ways of proposing PEPs in addition to the one we stated above.

Regarding the GovCo wallet, this proposal will serve as a first test for decentralizing the operations of a DAO-managed wallet. Based on its performance, it will be possible to assess in the future whether this model can be extended to the DAO’s other wallets or not.