[Temperature Check]: Delegation of UNI to Active but Underrepresented Delegates

Temperature Check
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Link to the snapshot

Summary

Despite being one of the most prominent DeFi protocols, Uniswap’s outstanding voting power does not necessarily translate into active governance participation. In fact, many top delegates with considerable voting power have less than 50% vote participation rate, and some even as low as 10% or 0%. While there have been previous campaigns to encourage delegation by large UNI holders, we have seen that further delegate accountability is needed as many of those who received large delegations barely participated, if at all.

In healthy governance environments, proactive delegates wield significant voting power, ensuring malicious votes are prevented and quorum requirements are met.

Therefore, this proposal requests the Uniswap Foundation delegate 2.5 million UNI to each of 4 active yet underrepresented delegates selected based on the criteria outlined below. To ensure further accountability, each delegate must maintain a 80% participation rate at a minimum (as explained further in Participation Requirements) or is subject to undelegation via the Franchiser contract explained below. In addition, there will 1 year term so the community can revisit for improvements and lessons learned. And if a received delegate is removed without fulling this 1 year term, the role won’t be filled.

Landscape of Uniswap Governance

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Source: Butter

Despite numerous improvements to Uniswap’s governance, there are still several areas that require further improvement. One prominent area is governance participation, which has witnessed a downward trend compared to late 2022 and early 2023.

Another issue is many large delegates are now inactive, and the delegators who entrusted them with delegation are either unaware about this inactivity or simply do not care. For example, there is currently several delegates with more than 2.5 million UNI delegated who never even voted onchain according to Tally, see the screenshot below.

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Source: Tally

Therefore, further distributing governance power to active but underrepresented delegates is a positive step forward ensuring governance is more active, resilient, and robust.

Participation Requirements

  • Must have voted on 80% (or more) of proposals (minus the proposals that were canceled) over the last 3 months (as of the date when this proposal is passed on Snapshot). This includes both Snapshot and Onchain proposals (such as Tally or Agora)
  • Must have actively participated in proposal voting for more than 3 months and have a Delegate Platform on Uniswap Forum under Delegation Pitch

Application Criteria

  • Meets the above Participation Requirements
  • Voting Power is less than 2.5 million UNI (as of the date when this proposal is passed on Snapshot).

Next Steps

  • Should this proposal pass on Snapshot, a 5-day period will begin where delegates that meet the above criterias are encouraged to post their application to be considered for delegation. In cases where there are more than Four qualified applicants, there will be an additional Snapshot vote to determine the top Four. Once Four or fewer applicants are selected (in case there are not enough delegates that meet the criteria), it will proceed to an onchain vote.

Other Clarification

-The term will be 1 year from when 2.5 M UNI is delegated.

-Should the onchain vote be approved but there are three or fewer qualified applicants because there are not enough qualified applicants, there WON’T be a subsequent application period and Snapshot vote after the initial vote to fill the remaining available recipients.

-Should the onchain vote be approved and there are qualified applicants but one or more of them are disqualified in the future due to their low vote participation, there will NOT be a new application and snapshot vote to give the opportunity to another delegate.

-As mentioned by in a previous proposal seeking UNI delegation, there will be deployment of at max four new Franchiser contracts, each one funded with 2.5M UNI (10M UNI total). The owner of these Franchiser instance’s would be the Timelock, while the at max four delegates chosen through the voting process outlined above can act as the delegatees.

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The below response reflects the views of L2BEAT’s governance team, composed of @kaereste and @Sinkas, and it’s based on the combined research, fact-checking and ideation of the two.

We appreciate the proposal and we’ll be voting in favour of it as we are supportive of initiatives aiming to increase meaningful participation in governance.

We’re curious to know though:

  • Where are the 10M UNI that will be delegated coming from?
  • How many delegates meet the participation requirements?

Also, we’d like to suggest that there’s an update from the delegates in 6 months to avoid having to wait a full year for the delegation to expire in case there are reasons to end it before that time.

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It will come from the treasury.

Just looking at 90% participation rate, there were 10 delegates or so that meet the participation requirement. Since this has been lowered to 80%, there will be many more who qualify.

Updates are real time so they can be terminated even in a month if there are reasons to end it before.

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I’m watching the delegate nominations come in and they are all good options. This led me to think about how we might tweak the parameters suggested here. What if, instead of delegating 2.5m UNI to 4 delegates, we delegate 1m UNI to 10 delegates? This would of course would mean that we hadn’t changed the dynamics of who could post a vote. So I would also recommend that we proceed with this proposal from @GFXlabs.

The result would be a larger number of delegates with a meaningful (albeit smaller) increase in voting power, as well as increased access to on-chain proposal power.

Would join a spaces to talk about this at some point if anyone’s interested?

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Thanks for the suggestion. That would be an interesting mechanism as the focus on 2.5 mil was mainly aimed toward to solve the issue of who could post a vote as you mentioned. As the application period will end by this weekend, we can hold off on moving to another snapshot (as originally, if more than 4, the proposal wanted to have a snapshot to choose top 4), and have a space to discuss with the applicants together to talk about the options.

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We’re definitely open to this suggestion as well. More diversity is welcomed while creating something like the CPF would also solve the issue of posting an on-chain vote.

We’re open to discuss this on a space as well with all DAO participants.

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A Twitter space sounds like a great idea. Let me know how 404 DAO can support it.

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For more visibility, application thread for the delegation of UNI can be found here: https://gov.uniswap.org/t/delegation-of-uni-to-active-but-underrepresented-delegates-application-thread/22265?u=doo_stablelab

The deadline will be November 11th 2023 5PM CET.

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Yazzzz! Let’s do that. Hoping for support.

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There are two more days to go but currently there are 5 qualified applicants and unlikely to have 10 qualified delegates apply. However, instead of lowering the requirement or extending the process, I was thinking maybe we can have it 10 mil UNI divided by qualified applicants by the deadline.

So for example, if there are 5 by the end of the deadline, it would be 2mil UNI delegated each, which would allow Wintermute to post onchain votes but for others would still be below the threshold. If there are 6 or more, all would be below the threshhold.

As the point of this program is accountability, it will be easier for the community to track of smaller number of delegates.

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Appreciate you @Doo_StableLab for initiating this conversation. Increasing delegate participation and awarding active members with more voting power is important. Here are a couple of comments to consider before the onchain vote:

There are two functions that this proposal should address.

  1. Diversifying the number of entities that can sponsor an onchain proposal (Sponsors)
  2. Giving more voting power to active, underrepresented delegates (Voters)

*All sponsors are voters, but not all voters are sponsors. A voter becomes a sponsor if they have >2.5M UNI, making them eligible for creating an onchain vote.

Sponsors
To date, there are very few delegates who can create proposals. Sure, you could ask Uniswap Foundation to lend you some tokens for putting up a particular vote, but I think we need a more autonomous way to facilitate the proposal process long term. Going forward–and a part of this has already been implemented with cross-chain deployment RFCs–it would be nice to add a section to RFCs that acts as a call for potential sponsors to endorse a proposal. If a delegate with >2.5M UNI is very much in support of a proposal, they should reach out to the proposing team to help them facilitate the governance process (and vice versa). We can also add a section to the forums that lists all the relevant sponsors, along with their contact info.

Voters
The second aspect, increasing delegates’ voting power, is self explanatory in its merits.

This Proposal’s Format
All this being said, I think we should structure the temp check as “Weighted voting” (each voter may spread voting power across any number of choices). A distinction between sponsor and voter should encourage delegates to give higher weight to candidates that they believe should become sponsors.

The two applicants with the most votes should be allotted an amount of UNI that will make them a sponsor. This would mean that a maximum of ~2.5M UNI can be used to assign two delegate sponsors. The remaining UNI from the 10M total should be evenly distributed among the other candidates (these are the voters). There should be a minimum number of votes, however, that a candidate should receive to be eligible for the mentioned even distribution–we don’t want a delegate who attains a very small number of votes to receive the same voting power as one who attains significantly more. This threshold number is something that we collectively determine.

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I like this idea from @AbdullahUmar a lot. Might be a little jenky in practice to put in words, but having the:

  • Top 3 (or 2) applicants of the snapshot receive enough delegation to get them to sponsor level (ex: 250k votes before, they would get 2.3 votes → enough to get over 2.5m with a small buffer)
  • All remaining applicants who get over “x” votes in the snapshot (10m?) split the remaining votes
  • If the remaining applicants split vote is more then 2.5m, then everyone who received over the “x” (10m?) snapshot quorum for this vote would evenly split the total delegation
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I appreciate the initiative as well as suggestions from @Juanbug as well. But for those, I would rather have it as separate proposal (which can run in parallel) because of practical reason that from experience , the more moving parts the proposal has, the longer it will take to get all the details.

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Actually I re-read @AbdullahUmar 's point and seems like I misunderstood it. It might be interesting and I think it’s really the question for @eek637, whether it would be ok to add 2-3 additional delegates in the governance ecosystem who would be able to make onchain proposals

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It’s not up to me! But it seems like a reasonable experiment.

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The reason I bring the distinction between sponsor and voter up is because 2.5M across 4 entities is too limited in scope (not enough people get UNI), and 1M across 10 is not possible since we don’t have enough qualified applicants–plus it doesn’t resolve the lack of sponsor issue. A happy medium is taking the 10M UNI, using max 5M of it to upgrade two entities to sponsor level, and the rest can just be voters with a higher delegation amount. I don’t think it adds much more complexity to the current proposal.

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We think it’s an interesting idea and it makes sense

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Confirming 7 delegates @WintermuteGovernance @0xkeyrock.eth @Doo_StableLab @kfx @Juanbug @404DAO @karpatkey have qualified for the program, but if there’s a dispute, please share with the community.

Before proceeding to competition poll (or not depending on the choice), would like to hear the options ahead from both the qualified delegates as well as the community. For this forum poll, the voters are visible, and will take qualified delegates’ votes as primary indicator and will take the community’s votes as secondary indicator. Please vote by Tuesday but it’s optional.

  • Top 4 receive 2.5 M UNI each (Original)
  • Split equally among 7 Qualified Delegates (1.42 M UNI each)
  • Top 4 Delegates get delegation till 2.5M is achieved (So likely first 4 delegates achieve 2.5 Mil. 5th gets some)
  • Top 4 Delegates get delegation till 2.5M is achieved. The rest of UNI are split among the rest proportional to their votes won.
  • 1Mil UNI for 7 Qualified Delegates. And 1 Mil UNI each for 3 additional delegates that will be open for all delegates but will have to go via snapshot competition poll of their own
0 voters
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Thanks all for the vote. It was a close vote. However, as

Two qualified delegates voted for “Split Equally” while four qualified delegates voted for “top 4 Delegates get delegation till 2.5 Mil”. Therefore, will be proceed with snapshot vote reflecting “Top 4 Delegates get delegation till 2.5 M is achieved. the rest of UNI are split among the rest proportional to their votes won.”

Thank you!

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Thanks for continuing to push this forward Doo. Can you give me an example of how this will work? I’m not sure i get it.

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