Consensus Check: Raise the proposal quorum threshold from 40M

Consensus Check
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Previous Temperature Check Discussion
Previous Temperature Check Snapshot Poll

TL;DR:

Raise the quorum threshold to 60M.

We believe that this would represent a measured raise in the quorum threshold that not only reflects recent turnout numbers but also takes into account the increased risks of delegate abstention as a substitute for “NO” votes if the quorum is raised too high.

Motivation

Based on the Snapshot vote and discussion in the temperature check, there does seem to be some community support for increasing the quorum threshold in principle. The outstanding question, therefore, seems to be what number the threshold should be raised to.

If we view the decision around raising the quorum threshold in the context of the UNI release schedule, which is pictured below, it is easy to assume that the number of delegated votes will only increase from here as investors and the team see UNI vest and as more and more Treasury UNI is distributed through grants and other programs.

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Moreover, with both the vote for the Defi Education Fund and the lowering of the proposal threshold seeing over 90M UNI in participation, it is clear that the current quorum threshold of 40M is on the low side. Proven high voter turnout means that a higher quorum can quite easily be reached and so rather than making the passage of proposals more difficult, raising the quorum threshold would more so ensure that there is sufficient amounts of consensus before any proposal passes. A risk with a threshold of only 40M UNI, as it is in the status quo, is that lower quality proposals will have an easier time getting passed. Thus the quorum threshold should be raised to help ensure that proposals that pass reach a higher bar of quality.

With that said, @derek raised a great point in our Temperature Check pointing out that raising the quorum threshold might result in delegates abstaining from voting to prevent a proposal from passing. This is not ideal because in the spirit of transparency, voters/delegates should own up to their decisions if they are against a proposal rather than being given the opportunity to abstain and hide their opinion. In short, a low threshold forces large token-holders and large delegates to be actively involved in the governance process. It should be noted, however, that this risk is arguably mitigated by the fact that tools like Tally, Sybil, and Boardroom provide transparency on delegate voting activity. This makes it possible to call out and delegate votes away from actors who continuously abstain.

Keeping the above in mind, we therefore believe the threshold should be raised given, on balance, the benefits of raising the quorum to ensure proper consensus is met outweighs the potential harms of delegate abstention.

Specification:

We believe the best approach is to raise the quorum threshold in a measured way to 60M.

Given that all three successful Uniswap proposals so far have reached at least 60M YES votes, with turnout surpassing ~90M in the previous two proposals, 60M is a balanced quorum level that accounts for this higher turnout while also accounting for the increased risk of voter abstention.

Snapshot:

The Snap Poll for the consensus check will be live for 4 days, from 22:00 EST on July 6th. If the poll passes with a minimum of 50,000 UNI in support, this proposal will move forward to the next phase.

A link to our snapshot proposal: Snapshot

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Thanks for the clear post.

Is this proposal coming as a response to a specific concern/incident (I assume not if only three proposals have been passed)? I just wanted to confirm.

Some considerations in setting the quorum:

  1. As a rule of thumb, one approach would be to set the quorum equal to a majority of all outstanding votes (i.e. 50%). Has this been considered as a more dynamic approach than setting a fixed number?

  2. How does this proposed increased quorum of 60M compare to the largest blocks of votes (in the five historical votes that were held)? [I’m a bit new, so perhaps you could link to where I can see a breakdown of the voting on the five proposals.]

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Thanks Pinotio.com for your engagement. Absolutely, would love to clarify.

The proposal is not stemming from one specific incident, but rather a growing trend towards increased vote delegation and governance participation to the extent that a 40M UNI quorum is now too low as a bar to ensure proper consensus.

Relevant to 2), historical participation stats on the five historical governance proposals ordered from most recent to oldest:
DeFi Education Fund (June 2021): 79.6M FOR, 15M AGAINST
Reduce proposal submission threshold (June 2021): 90M FOR, 0M AGAINST
Uniswap Grants (December 2020): 60M FOR, 0M AGAINST
Retroactive Proxy Airdrop (November 2020): 37.5M FOR, 1.2M AGAINST
Reduce submission and quorum threshold (October 2020): 39.5M FOR, 0.7M AGAINST

It is clear that the quorum must be raised from the initial 40M threshold in September 2020, given the recent participation rates of >90M UNI. Even back in December, participation had reached 60M.

In response to 1), it would be great if you could clarify what you mean by a more dynamic approach. Currently, even if a proposal surpasses the quorum threshold, it must still achieve a majority FOR to be passed. For example, with a 40M quorum in place (status quo), if a proposal gets 50M FOR and 51M AGAINST, it won’t be able to pass as it has not fetched a majority of all outstanding votes. We won’t be changing this mechanism. The quorum threshold simply acts as a safety net. For example, with a 40M quorum in place, if a proposal gets 30M FOR and 25M AGAINST, despite achieving majority approval the proposal would not be able to pass as it has not yet reached the quorum.

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Thanks @pennblockchain .

Dynamic Approach to Quorum Setting
By dynamic approach, I simply mean that the quota could be defined as 51% of outstanding UNI. This way, as we go out in time and more UNI is issued, there is less of a need to keep increasing the numerical value of the quorum threshold via governance proposals. For example, if outstanding UNI is 100M, the quorum is 51M. When it increases to 200M UNI outstanding, the quorum would automatically adjust to 102M UNI.

Size of large UNI voters
Do you have information on how big (measured in million UNI) were the largest blocks of votes in each of the five prior proposals? I think this is also useful information for deciding where the quorum should be.

Thought on size of quorum
I’m not sure the quorum needs to be very large. There is a defined voting process that takes some days. So I don’t see how small groups can easily get a proposal through. Ultimately, the rest of the community will know and can just vote against. Maybe I’m missing a specific concern that you see?

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The quorum should be high enough so that VCs, their proxies/delegates and team members cannot reach it without support from the greater tokenholder community.

There is no point in raising the quorum until we have more transparency into what that number is - of course, taking vesting into consideration.

Due to clear VC dominance in this token ecosystem, raising it to 60m would just be a symbolic gesture at this point.

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Not sure if this is specifically address elsewhere in the proposal, but I strongly believe we should switch from Governor Alpha to Governor Bravo as part of any future governance parameter change (such as this proposed quorum increase). This brings a few benefits, mainly from not needing to migrate to a new contract for parameter changes:

  • Easier for outside services (Uniswap front end, Tally, Boardroom, Fish.vote, Penguinswap front end, etc) to integrate with governance without frequent maintenance
  • Continuous proposal numbering scheme (versus each migration to a new governor alpha reseting proposal number to 0, which can cause some issues for integrators)
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Adding on to @monet-supply: If Uniswap changes to Governor Bravo, it can add a review period (Compound uses a 2-day period) which is a huge upgrade to protocol/goverance safety. The review period allows everyone to check the proposal before voting and set up their governance tokens for voting.

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@monet-supply @Getty We agree that our proposal should include an upgrade to the Governor Bravo contract along with the change to the quorum. Since incorporating this change would likely significantly alter our initial proposal, we plan to deploy a new Consensus Check that pivots the proposal to also include the above suggestions under the theme of improving the efficiency and security of the Uniswap governance process. We encourage voters to abstain from this specific Consensus Check, and await our new Consensus Check.

Thank you to the community for all the suggestions. We are always open to hearing out fellow community members, and actively incorporating their feedback.

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I think if you guys put together a proposal to upgrade to Governor Bravo and a 2-day review period that it would go through governance. If you try to buddle it with a proposal quorum threshold change it becomes a lot less likely to get passed. I suggest breaking it up into two proposals. Take the easy win with the Bravo upgrade and then try to do the quorum change.

PS: Who is on the Penn team? Send me a dm on Twitter if you want to talk more about governance.

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