This question comes on the heals of SundaeSwap’s launch of their dex (run by a few community selected stake pools) and then watching Charles Hoskinson’s video response to Moxie Marlinspike’s article titled “My first impressions of web3”.
I realise that there’s no easy, straight forward path to go from fully centralised (The team at Indigo making the protocol) to fully decentralised (DAO). I’m going on a few assumptions here and keep in mind that I’m just a guy NOT living in my mom’s basement so please correct me if I’m wrong about these assumptions:
1. The Indigo Protocol will exist as separate code on SP (stake pool) servers 2. The community is made up of INDY holders 3. INDY holders will be able to make proposals regarding iAssets 4. INDY holder will have voting rights regarding the protocol 5. The Indigo DAO be made up up exclusively of INDY holders 6. The Indigo DAO will be responsible for changes/upgrades/decisions related to the protocol
Given the above assumptions I have these questions:
1. Will Indigo run the SP’s or will they be run by indypendent SPO’s? Or some hybrid approach moving from one to the other? 2. Will the SPO’s will be voted on by the community or selected by Indigo (Pre DAO)? 3. If you go the SPO route, what are the parameters/characteristics/criteria (eg. no multi-pools, certain stake thresholds, number of blocks minted, age of the pool, etc.)? and… 4. Will the parameters/criteria be explicit? 5. If yes, what are they? 6. Will the protocol be launched fully decentralised or will there be an explicit path that will lead to it’s eventual decentralisation while remaining fully operational? 7. If launched fully centralised, when will tokens be distributed? and… 8. How will you securely shift control over to the DAO? 9. Do you think having the protocol controlled by the DAO is the best route to go assuming the frozen-in-time nature of decentralised protocols (Moxie’s comments about email and IRC) and how uninformed and ignorant, however well-intentioned, some of the INDY holders may be (I include myself in this group) AND how difficult decentralised governance is to get right? 10. What amazingly insightful question have I failed to ask? (besides this one)
Indigo won’t be running on SPs. Indigo’s smart contracts will live on the Cardano blockchain.
Assumptions 2-5 are correct.
The Indigo DAO doesn’t hold responsibility for upgrades or development related to the protocol. The DAO however is in control of what changes can be made. INDY stakers will have the right to vote on proposals and control the DAO treasury. So INDY stakers could vote to spend funds hiring a third party to develop proposed features and perform upgrades. The DAO itself however won’t develop the features since development will be outsourced.
You can think of the DAO as an executive team that has authority but doesn’t actually do any work themselves. Instead they hire others to do the work on their behalf.
The current Indigo team is the initial chosen team to undertake development on behalf of the Indigo DAO.
There’s no plan for a SPO. We’re currently working with the Cardano Single Pool Alliance, so if the community votes for a pre-launch token distribution then we’ll likely be partnering with single pools. More information about this will be published in the future.
Parameters will be explicit.
There are no finalized plans at this time. The next step is a community vote.
The protocol will be launched as decentralized as current technology allows. It’ll be possible from day one of launch to be able to download the Indigo application and run it yourself. However, for improved usability we may have to rely on some centralized components for hosting the application and making it available on the web because we can’t expect everybody to have the technical capabilities to run the application themselves. We are working out which options to proceed with.
The DAO will be community owned upon launch. The Indigo development team have their tokens vested and so have the same limitations when it comes to voting rights as the rest of the Indigo community. Anybody participating in the protocol will be able to earn INDY and gain voting rights.
For the long term success of Indigo, yes, having the protocol owned by the DAO is the best route. This type of decentralization is very new so there will of course be many hurdles during Indigo’s journey. We’re doing a lot of research into this to make sure Indigo is set up correctly. As we finalize our plans we’ll be releasing more information on this topic.
If anybody has any more questions they’re welcome to ask.
The DAO will be managed by INDY stakers and will be responsible for distributing funds and hiring key leaders. So while the DAO won’t vote on every small issue or be involved with the day to day decisions, it’ll be involved with the larger vision and future plans.
What does the Indigo dev team envision for the next 2 to 5 years? Do they see themselves continuing to be the sole dev team for the protocol? Is there a desire for that at this early stage (too many cooks in the kitchen philosophy), or are they hoping the DAO can create meaningful incentives to attract outside dev teams to continue the work?
Hey Swoops, this is a great question! I foresee the next 2-5 years after launch that the Indigo Development Team will be able to distribute some workload to open source contributors, DAO-funded initiatives, as well as maintained by the Indigo Development Team.
The DAO Treasury will be an excellent mechanism for users to provide contributions to Indigo Protocol. However, I foresee users providing more value to third-party products and infrastructure to the protocol.
There really is no knowing what will happen in 2-5 years, but I beileve that the DAO Treasury Funds can be used to provide protocol stability and new features.
Assumption 1 does not make sense. The protocol runs on the Cardano ecosystem. Assumption 6 is not true. Indigo Labs the company will work on behalf on the Indigo DAO to roll out changes/upgrades. The decisions related to the protocol will be up to us, the holders of the $INDY token.
Are there any safeguards in place to thwart hostile takeovers of the governance process…by say DAOs? Does the distribution of voting power sufficiently guard against this?
I am also surprised that the team may propose a single SPO distribution. This seems more of a marketing strategy than a decentralization/governance strategy and that is great too. But looking at growth over past few weeks, is it better to us ammo to incentivize protocol use?
Regarding the next 2-5 years, are there any goals for the protocol? For example, is there any planning going into expanding to a less tech or financial savvy audience?
Traditional finance is generally understood by the public and there are financial advisors to help people manage investments. This may be an issue for the INDY stakeholders, but considering these groups could legitimize the protocol (and crypto in general) in the eyes of the general public and significantly increase the adoption of the protocol.
In short, is there any plan or expectation for the future with regards to these avenues?
I think maybe I don’t understand the purpose. of single pool operating If it is to distribute INDY then my thinking is that it would be in better interest to use that allocation for incentivize protocol use. And then the “single” in single SPO gives a feeling like INDY would not be distributed in a wide enough way for instance if single pool becomes saturated.
Anyway thank you for taking the time to help me out.
There are currently 316 SPOs we’ve identified that could potentially qualify for distribution of INDY. This is a larger number of pools than other Cardano projects have utilized to distribute their tokens.
There are more SPOs than MPOs. Having the SPOs become saturated is a good thing for both Cardano and Indigo.