Temperature Check for DAO Approval: Indigo Foundation Appointment of Simon Peters as Director

Temp Check Discussion
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The Indigo Foundation (approved by the DAO in October 2022) is the voice of the DAO – it was created and exists to implement the votes of the DAO to build and improve the Protocol.

The Foundation is overseen by a Board of Directors. Since it’s formation, the Foundation has had two directors – Eric Coley (CEO of Indigo Laboratories, Inc.) and Eduardo D’Angelo P. Silva (Director of Corporate Services with Zedra Trust Company in the Cayman Islands).

This Temp Check proposes the addition of a third director, Simon Peters. Simon is a co-founders and Director of Xerberus Labs Ltd. based in London, UK. Before joining Xerberus, he held a directorial position at a corporate venture, working for a consortium of German crypto-banking startups. Xerberus is a Risk Rating Protocol designed to provide the probability of default (e.g., being rugged) for any asset. Simon is based in Germany.

Simon was initially recommended by two Indigo Protocol Working Group members and has since expressed his willingness to take on the role and help shape the future of the Foundation and the Protocol. Simon has confirmed that the Xerberus team supports his taking on this role and the possible collaborations it presents to introduce greater risk-management tools into the Indigo Protocol.

As noted in several past proposals and in Discord, one near-term goal of the project from the start has been to recruit qualified individuals to join the Foundation so that the Board can efficiently and effectively implement the votes of the DAO. One key step towards that goal will be the V2 Protocol upgrade in 2024 so that the DAO can vote to use the DAO Treasury to fund the operations and undertakings of the Foundation. Appointing additional Directors now will help position the Foundation to fulfill its intended role after the V2 upgrade in 2024.

As with any time-consuming role, we believe it is reasonable to also propose that Simon receive a 1,000 INDY per month stipend for his service on the Board. A stipend for directors or committee members is common in the DeFi ecosystem and we believe that one is appropriate here. Zedra charges several annual fees to fulfill its regulatory roles as the local director, and Eric has declined any stipend. Of course, the DAO Treasury will not be available to pay this stipend until after the V2 Protocol upgrade; Simon has agreed to await payment of the stipend for the months between now and then until after the upgrade.

(We also want to quickly remind the DAO community that the Foundation does not have possession of or control the treasury; the Governance Smart Contract controls the treasury and can only dispense treasury tokens associated with an on-chain Proposal passed by the DAO. DAO Proposals will be needed to fund the Foundation, and provide the Foundation with any tokens needed to make payments to third party vendors or the like, similar to other protocols which have authorized a foundation to retain staff to oversee its operations (see Uniswap and Balancer proposals).)

As with all Temp Checks, we hope this proposal triggers an active and engaged conversation regarding building out the Foundation and how to best support the Protocol. We ask for everyone’s support and look forward to answering questions.

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I love Xerberus and what they do for the Cardano community. This is a highly respected individual from a highly respected team and I would love to see Simon brought on board!

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Super Bullish!
Having Simon on the Foundation is an amazing opportunity for everyone involved!

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Yes, yes and yes! Bullish

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This looks good! Love it!

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I’m a bit split here :slightly_smiling_face: Xerberus is a great project that has gained the trust of the community for sure, and Simon in this regard is absolutely a highly valuable addition to the Indigo Foundation.
But, precisely for this reason, isn’t there a risk of conflict of interest between Indigo and Xerberus ? What will assure the independance of Xerberus towards indigo in its analysis ?

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Hey, @Garance ! Great topic. I can see where you are going with this, but I personally do not see this as a conflict of interest. For those who do think it may be, I’m curious if they also think that this would mean someone buying and holding a large number of Xerchers (Xerberus NFTs) would not allow Xerberus to remain impartial.

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It’s not about selling NFT. I understand @Garance point of view. I think it’s more in the sense that Simon will give less time to the Xerberus project and more time to Indigo. It’s good for Indigo to have a grouping of brilliant people, but it risks abandoning Xerberus, which is still one of the spearheads in terms of security and warnings on Cardano.

By participating directly in the protocol, its objectivity runs the risk of being altered.

However, I believe that Simon is an important element and that he will be able to make the difference with his expertise.

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Oh, I see. This is definitely a valid concern. I do see the risks you highlight here.

My hope is that Xerberus will grow and expand talent to a point where it is well established and not dependent on any single particular individual.

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Completely agree with you ! Xerberus is an important part of Cardano that should keep pushing limits.

Let Simon join us !

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So one positive way to put it : I would vote Yes, if it means a doubled vigilance of Xerberus on Indigo. I would be happy to hear how Simon sees this. In any case, a great proposal for sure.

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Yes, the idea is that Xerberus is a watch organism on DEFI, and as such may need to be independant and protocol agnostic.

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I can understand the reservations some may have but I don’t think there is any conflict of interest here. The Foundation is an administrative role with no power outside of what has been approved by the DAO. The Foundation cannot act independently.

As for Simons continuing role with Xerberus I don’t see any issues because the nature of that project is to report publicly available data as directed by its users. I don’t see how Xerberus could show any favoritism without immediately being called out on it.

I think Simon is the right person for the job and having someone in the Foundation that is well known to the community is a huge plus. Bullish!

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This is a promising direction, but we need more details about the responsibilities of this role. We also need to understand why having three directors is considered better than two.

Eduardo is merely a rubber stamper, so we shouldn’t view him as unbiased. He is affiliated indirectly by Indigo Labs. Bringing Simon Peters on board is a positive move towards decentralization. The ultimate aim is to separate the Indigo Foundation and Indigo Labs. Eric serving as a director contradicts this objective. At present, Indigo is controlled by a single individual - the DAO member with the most voting power, the CEO of all Indigo’s development, and the majority power holder of the Indigo Foundation are all the same person. Decentralizing this power will take time and can’t be achieved instantly, but with the new proposal to elect Simon, it’s an opportune moment to discuss the plan for decentralization.

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I am a big fan of Xerberus and spoke with the team members on a few occasions. This is a heart warming development and I’m glad to see this recommendation for Simon to take the position come from the PWG. You have my support. If you would like have a Twitter space to talk about thoughts as a Director or for people to get to know Simon before the vote, I would be happy to host as well.

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Simon can still serve as a Director and just recuse himself from doing an analysis on Indigo, leaving future analysis to SCAT DAO and CRCI.

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I agree, it is unclear what the board has or will do. It seems hard to justify a 1,000 INDY per month stipend without any understanding of what the expectations are. What role will Simon play in preparing Indigo for V2 or securing oracle feeds for the expansion of the existing protocol? How exactly will this roll be consuming his time?

I would also like to hear from Simon what he thinks about the conflict of commitments between the two organizations, how does he plan to do a good job being director at both at the same time.

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I’m not overly worried about the compensation amount, particularly when Eric is earning 100 times that each month. It’s a fair amount to have some skin in the game. However, it’s a relatively low compensation for a director’s role, which raises questions about Simon’s exact role.

Some people in this thread are highlighting the conflict of interest between Xerberus and Indigo. Yet they’re overlooking the conflict of interest between Indigo Labs and Indigo Foundation. If the proposal was to replace Eric with Simon, I’d be more supportive. This change would be beneficial for the protocol and ultimately for Eric, as it reduces his risk. We can’t pretend that the Foundation is an independent entity when one person is pulling the strings behind the scenes.

Currently, Indigo is hindered by its centralization. Only three iAssets have been whitelisted. If we want Indigo to thrive and reach its full potential, we need to focus more on decentralization. This will allow us to vote for new iAssets and attract more liquidity.

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Having worked with Simon before I believe he’s well qualified for this role. I agree that there should be a community call to get to know him and his working style.

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This is an absolutely essential question. I’m glad you asked it because it allows me to highlight one of the greatest strengths of Xerberus.

Our Risk Analysis takes on-chain data, examines key metrics, and produces a risk score. This means our risk rating is based on an equation. This equation remains the same for each and every project. In fact, there are some projects currently close to us that haven’t received the best rating.

The equation itself will be open-sourced and is part of the Xerberus governance process. This means we must agree on an upgrade. This is crucial because we view our Risk Assessment both as a public good and as the result of a public debate. What constitutes a good token? Our Beta Testers are already heavily debating this topic and providing input that we’ll share with the public soon.

I hope this adequately addresses the question regarding how we ensure our independence and impartiality.

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