Revised Collateral Requirements for Proposals

Temp Check Discussion
1

Currently, submitting an on-chain proposal on Indigo requires a 100 INDY collateral, which exponentially increases based on the number of concurrent proposals that the user is submitting (200 INDY for the second, 400 INDY for the third, etc.). This collateral is taken if the on-chain proposal does not pass a vote as a protective measure to prevent users from spamming the DAO with frivolous proposals or those that are not well thought out.

There are a number of governance “power users” such as the members of the team, the Protocol Working Group (PWG), and the Protocol Outreach Group (POG) that frequently submit well thought out and well intended proposals that may not pass an on-chain vote for any number reasons. Furthermore, the loss of all collateral on a simple “No” vote (which may not even be the majority due to the Adaptive Quorum Biasing) could potentially hinder users from taking that last step of submitting their proposal on-chain for fear of losing their funds.

As such, I’m proposing the following revisions to the INDY collateral requirements for submitting on-chain proposals:

  1. Collateral NFTs: For every 3 proposals that pass that were submitted from the same wallet an NFT will be minted and sent to an address controlled by that wallet. This NFT is transferable can be usable in lieu of any INDY collateral required to submit another proposal. This enables power users who submit quality proposals to be able to submit proposals that may be more contentious without the risk of losing funds. It also enables them to “sponsor” proposals from other individuals to help onboard them to the governance process. To prevent an abundance of NFTs existing simultaneously in the ecosystem, each NFT will only be valid for use as collateral within 366 days of its minting date, after which they expire. Additionally, a maximum supply of 50 functional NFTs (not expired) will be allowed to exist simultaneously.
  2. Revised failure requirements: For the purposes of withholding collateral (whether INDY or collateral NFT) an on-chain vote will have three possibilities.
    1. The vote passes and the collateral is returned.
    2. The vote fails with a “Yes” vote greater than or equal to 40%. The proposer’s collateral is returned.
    3. The vote fails with a “Yes” vote of less than 40%. The proposers collateral is withheld.
  3. In addition, to aid Indigo working groups whose job it is to suggest and submit proposals, wallets controlled by the Protocol Working Group (PWG), Protocol Outreach Group (POG), and the Indigo Foundation will be whitelisted to no longer require collateral for proposal submission.

These proposed changes will require an audit as the code substantially changes the dynamics of the governance process.

7 Likes
2

So let’s bring the ruling elite class of the government to the world of crypto and Indigo? Hard no vote from me.

If the PWG thinks a proposal is contentious, then they should risk funds to propose it. Everyone is equal in decentralized crypto. Everyone is not equal in your temp check here.

3

I don’t see a problem with how it works now. This is a no from me, for now at least.

4

So let’s bring the ruling elite class of the government to the world of crypto and Indigo?

This is complete nonsense. PWG and POG members are elected by INDY holders to do a job which requires submitting proposals that are put forward to a vote and must be passed by INDY holders. In most democracies elected officials propose and make laws, many of which can be passed by a vote amongst themselves and not the general public. INDY holders always have the final say here.

I don’t see a problem with how it works now.

It may not seem like a problem from the outside, but it’s a pretty significant pain point within the working groups. Most working group members aren’t particularly wealthy and the exponentially increasing collateral is a significant burden to them. There are at least half a dozen proposals that have been delayed or haven’t been submitted altogether because we can’t predict the sentiment of INDY holders, which can turn on a dime depending on market conditions. PWG members have lost funds on proposals that eventually passed, but contained a numerical or wording error in the original submission and therefore had to be retracted. I would venture to guess that the most recently failed RMR + interest adjustment didn’t pass because it should have been two separate proposals instead of one bundled one…but when it costs exponentially more to submit a new proposal people start trying to lump everything together to save themselves costs.

4 Likes