Following up on the last conversation, this is Other Internet and Avantgarde Finance’s proposal for how a future Uniswap-Voltz relationship might work.
Authors: Toby Shorin (tobyshorin), Bryan Lehrer (bryanlehrer), Erin Koen (eek637)
What we’re solving for
We’re overall in support of Voltz’s proposal to license Uniswap V3 codebase. However, should the proposal pass, we want to ensure there are proper governance structures in place to ensure the success of the relationship between these two communities.
In proposing such a framework, our goal is to ensure that the governance rights that come along with the token grant are 1) in fact used and 2) that their use does not come at a cost to Uniswap’s own governance.
Instances of the first concern are obvious and widespread. Voter fatigue and lack of governance participation on important issues is a common criticism of tokenholder voting. When those issues are related to a different protocol altogether, it’s reasonable to expect participation to drop even further, and we’ve seen instances such as Index Coop’s metagovernance where this is the case. They have taken similar steps to what we are proposing here, and have empowered a small group to vote on issues when token holders do not reach a quorum.
The second concern is a bit less common but potentially more destructive. We have found that when a significant amount of Project A token and voting power is granted from to Project B, it is costly to use regular tokenholder voting to determine actions taken with those tokens. For example, in May 2021, a significant portion of the AKITA token supply was donated to the brand new GitcoinDAO treasury by Vitalik. Without a plan for how to handle this, the entire Gitcoin steward community got embroiled in discussion over how to handle the tokens, hijacking the governance process and leading to steward churn.
We suggest that Voltz and Uniswap will have a more successful relationship if Voltz voting power is delegated to a small committee of Uniswap community members.
Proposed delegation committee
- Three individuals from the Unsiwap community are selected to represent Uniswap’s interests in Voltz governance votes. Let’s call this the Uniswap Voltz Committee.
- Committee members are selected through a process that includes 1) an open nomination process, 2) a brief interview to prevent sybil attacks, and 2) a snapshot to elect the three committee members.
- The total amount of voting power in Voltz governance is delegated equally to each individual. In this format each individual has 1/3 of voting power. (We are opting not to use a multisig for flexibility).
- The Uniswap Voltz Committee is a paid position, compensated with $1,200 per person, per quarter, denominated in equal parts UNI and Voltz tokens. Members of the committee will hold one-year terms that must be renewed by Uniswap governance annually, beginning on the date of delegation.
- Full responsibility for voting is delegated from the community to the Committee. To facilitate transparency in representation, a new thread on the Uniswap governance form should be created for the Committee to post updates when it conducts a vote. It may also solicit feedback from the community using that thread at its own discretion.
We believe this proposal will ensure the Uniswap community’s interests in Voltz are represented, while also de-risking the token allocation from Voltz’s perspective to ensure that there is a party responsible for the significant amount of voting power it is offering to Uniswap. Furthermore we believe that this framework can be reused for similar types of partnerships in the future where a licensing deal is struck in exchange for a percentage of the licensee’s governance tokens.
We’d like to get feedback on this proposal in the thread below.
Voltz governance is not live yet, so we intend to put together a proper temperature check for this proposal closer to the date of Voltz’s token launch that will incorporate any feedback collected here.
Provided we sense support for this proposal, we’ll put forward a new comment or post with self-nomination guidelines for being part of the committee, and start a search process for members. People who are knowledgeable about tokenomics, have a broad understanding of the DeFi landscape and tokenized financial products, and prior governance experience (especially in Uniswap!) will be very well qualified. This will be a first-of-its kind committee, so it will be a great opportunity to gain governance experience and participate in a meaningful community partnership.
Looking forward to feedback on this.