Thoughts after attending Decipher's Governance Roundtable on xGovs & ARC-33 Proposal

I attended Decipher this year, and spent over an hour talking and listening with Massimo, Adri, and Michel from the foundation and I wanted to share my thoughts on Governance going forward, as well as thoughts on their recent ARC-33 proposal. You can find that proposal here.

Decipher Governance Discussion
The session started with Davroop, an MIT fellow in Economics giving a presentation on applying Ostrom’s 8 principles to blockchain-based governance/DAO systems.

We then had an open discussion with Massimo, Adri, & Michel from the Foundation where they were quite candid about their feelings about how Governance had gone so far. I would sum up the notes in regard to this as:

  1. It hasn’t moved fast enough
  2. xGovs have taken too long to implement
  3. A clear roadmap for Governance going forward is missing
  4. Participation has been great and development by projects to make Governance liquid has been great.

I didn’t take notes at Decipher so if @Massimo or @Adri want to add anything here, please do!

A few themes that were brought up and acknowledged and discussed by community members & the AF members included:

  1. There needs to be more transparency. Transparency reports are coming (we’ve gotten one since Decipher, albeit lacking a bit)
  2. We need to figure out a way to get more of the community involved in the process.
  3. Accountability is lacking and there are no concrete goals/expectations to hold the AF to.
  4. Splitting (metaphorically or literally) Governance into different verticals such as “Defi, Gaming, Social Impact, Developers, etc.” could increase productivity.
  5. Voter education is hard. Letting thousands of people into the process…there are many that don’t spend enough time in the community, don’t understand as much context as others, or are uneducated or unfamiliar with topics. There has to be a balance of not handing the keys to the kingdom over, while still increasing the level of decentralization.
  6. @Adri joining and focusing heavily on this will speed up Governance development and a roadmap will be delivered.

Again if @Massimo or @Adri want to add anything here, please do!

ARC-33 Proposal
Recently the AF posted this in github to start outlining the functionality to xGovs.

I think what is in the ARC so far, mostly makes sense…but it’s more that it doesn’t seem like a complete system. I have more questions reading it than questions answered. Why is a token needed? How do rewards really even come into play with the xGovs. I think if we can leave rewards completely out the design of how it will work is advantageous. What will happen if the system relies on checks and balances that include rewards, if rewards go away in the future? (They will at least by 2030). I think overall it just needs a lot more defining on how it’s built out.

Governance Thoughts Moving Forward
I’m not going to write out a complete system for how I think Governance should work but I do have a collection of thoughts or ideas that could guide the discussion for a framework and I’d be interested to hear the response.

  1. Governance should have categories for all of the verticals. The AF has a “Head of Vertical” for each vertical, already. Including: Developer Tooling (Alessandro), Social Impact (Matt), DeFi (Daniel), Web3 (Shamir), Gaming (Piergiacomo), this isn’t meant to be exhaustive, add as many verticals as needed!
  2. Have each of the “Heads” of verticals, form a committee of 7-9ish builders or influential leaders in Algorand who have proven to be dedicated to Algorand but are not part of the foundation. Examples like @cswenor would be great for Dev Tooling committee.
  3. Have these committees meet once per month/quarter, or whatever is deemed necessary to discuss the priorities for what each vertical needs (within reason) from governance. Either host a Twitter space for this (would be awesome), or meet privately but share notes from the meeting with the community on what each vertical’s current thoughts on the ecosystem are.
  4. Allow these committees to come up with 5-10 proposals each, to the xGovs.
  5. Let the xGov’s vote on which proposals are worth being pushed to the greater community to officially decide.
  6. Yes that means xGovs still can’t propose votes on their own, but the expected mechanism is for people with serious proposals, whether they are xGovs or not, is to bring the proposal to a conmittee member in whatever vertical their proposal applies to, whether that’s asking them directly to nominate their proposal or interact with a forum of some sort to pose the proposal to the committee.
  7. Qualifying xGov’s based on wallet metrics really only works though if you allow people to qualify by combining multiple wallets. Is there an easy way to sign a transaction from each of your wallets for aggregation? For instance, I’ve used a different wallet each period, because of things like Algofi Vault.
  8. Start with a smaller number of xGovs (in the hundreds), and slowly scale it up as the kinks are worked out. Infinitely easier to add more than it is to remove. How many people really deserve to even be xGovs? There are barely 50 people that consistently provide insightful, thoughtful analysis on this forum. Don’t be scared to start low and piss off the community because someone with 10K Algo isn’t included at first.
  9. Cap voting power by any single wallet by either, limiting a single wallet to 1 million votes, or by only giving .2 votes per algo owned after the first 1 million algo. We need to curb whale power in voting or everything is pointless. If they are willing to create 200 wallets with 1 million each to game the system, so be it.
  10. Please continue to lower or remove Governance rewards. It will keep people from voting for voting’s sake to get rewards, and only people who truly care and are knowledgeable will vote going forward. It’s also inflating whales bags disproportionately. If this bear market continues for 3-4 years, the AF needs to be funded and have the ability to give grants to projects, and fund its own survival long term. A well-designed and funded Foundation with more decentralized governance deciding on grants and decisions is important…and again it will need funding long-term.
  11. Accountability in some form at the AF is needed if this will truly work.

Summary on Governance
My thoughts immediately above are not meant to be the final solution, but a first step in decentralizing the decision-making. Just like people think consensus is either Decentralized or it’s Not, people will say the above gives too much power to the foundation. The foundation right now is controlling everything, this is a great first step, we can’t decentralize overnight, just like consensus doesn’t decentralize over night…its a sliding scale that we must continue to decentralize over time. One of the most important things is to get each vertical in the AF to start leading WITH the community. The AF can even pick those in the community they wish to work with, I understand that in itself is a form of centralization but its a big step from where we are now. Another reason splitting up into verticals is important, is we need communication and direction. We keep voting on random measures, but there is NO vision for governance currently. Allow each vertical to start building its own narrative via twitter spaces with the community, which then get published into a newsletter each month/quarter. Allow the people at the AF who are in each vehicle to tell us what the vision is! Lead the community, if you make it clear to us that you have a vision and see a path to go down…tell us, show us, and let us support you…but communication is key. I would have expected after Decipher that @Adri or @Massimo would inform the community of the event on governance and give us thoughts or notes on how it went. Communication is key!

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Thanks @Conscious for the summary and feedback!

All relevant points.

We have worked on the involvement of community thougth leaders through verticals. @Adri is organizing a twitter space in the next 24hrs to go throught that as well. Staci will join the space as well.

I totally agree also on long-term strategy, we can have a long term framework, encompassing changes by votes and proposals as in the initial design.

On transparency we always had them semiannually. Increasing the frequency, involving the new CFO office and having more focus on governance are all things to be done.

Finally, the decision to go through ARCs was to have as many inputs from community as possible. Please join that process, even just to confirm some of the features proposed. The sooner that is through, the sooner we will have this game-changin feature.

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Thanks indeed @Conscious for the excellent summary and feedback!

I echo Massimo’s comment and would like to invite you to tune in to our Twitter space, where we will talk a bit more about the vertical advisory groups, that are being created not only to inform Governance but also to improve communication more broadly, as well as ARC 33 and ARC34.

Your ideas and suggestions are most welcome, and we would appreciate it if you would add your comments on GitHub as well.

You can set the reminder to the Twitter space using this link: https://twitter.com/nonfungibleab/status/1602825846061903872?s=20&t=cFTMWqRNASOkVoA1Jw4u5w

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I like a lot of the ideas you’ve mentioned! I’d also like to generally comment on one point you mentioned on interaction within the forum. I think one aspect is coming here to a forum is not a ‘usual’ medium that i would consider today, and generally would go towards Twitter, Youtube, Reddit, email newsletters, etc. Of course, i cant speak for all but have noticed a growing sentiment of not knowing any sort of plan and what Algorand is working towards (foundation or inc).

I was just watching on YouTube Charles from Cardano doing an AMA (and he does whiteboard sessions). Quite frequently he will answer questions, give estimates on timelines, and provide information of the future of Cardano. I’m not saying we need exactly someone like him, but it is undeniable how quickly I can receive information directly from him on future plans vs with Algo.

I would love for more extensive information as to the workings of Algorand, foundation and Inc, and i believe others would share a similar mentality.

Other than a few random postings I barely saw much from Decipher. Last year i had the digital pass and was able to watch quite a bit personally, though, it wasnt even offered this year and no recordings to my knowledge.

Overall, just feeling disconnected and to gain more information is getting increasingly difficult.

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Dechiper 2022 videos are available on Youtube.
I began to make a rudimentary Dechipher 2022 Table of Contents.

There were AMA sessions long, long ago. My questions were never answered, somehow…

Still, I think that AMA sessions would be essetial for Algorand. Even with Prof. Micali once or twice a year.

Agreed, organizing a more standardized communication procedure with regular updates from the AF would be very helpful.

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Thanks for your summary from Decipher and thoughtful comments, @Conscious. I agree with many of your points, although there are a few I want to respond to, specifically:

#1. I am a bit wary of defining categories too narrowly, as some grant applicants may not fit neatly into a category. This could leave applicants–particularly those with the most creative, interdisciplinary ideas–in an awkward position of not fitting neatly into any category and being at a disadvantage.

#2/3/4. Forming committees to generate proposals is highly exclusionary and in tension with the inclusive goals of Algorand and governance programs. I think such a system would be widely panned by the community as private councils of the AF’s friends.

#6. xGovs should absolutely be able to propose votes on their own. Without this, it would be like a legislative body that can only vote on an agenda created by some separate council that may not even be comprised of members of the voting body. I am struggling to think of a democratic institution that operates this way. Perhaps it will take some time to build tools to enable it, but the xGovs should be able to control their own agenda.

#7. For practical reasons, the qualification criteria may need to be kept quite simple. Your comment in #8 about certain people not being able to qualify at first may also apply here.

#8. Are we requiring KYC? If no, then you can’t limit the number of human xGovs. See my next point.

#9. The governance programs should never incentivize Sybil-style behavior/attacks in which wallets are split or combined to game a system. We should either commit to a principle such as “1 Algo, 1 Vote” or go the KYC route so that programs can be run on the basis of known human participants. The former seems to be the obvious choice and is consistent with Algorand’s protocol consensus mechanism.

I am going to try to find some time soon to integrate some of my thoughts about how the xGov structure could be bootstrapped in an intuitive way.

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Thanks for the response!

#2/3/4. Forming committees to generate proposals is highly exclusionary and in tension with the inclusive goals of Algorand and governance programs. I think such a system would be widely panned by the community as private councils of the AF’s friends.”

100% agree, but this is 100% better than the current system. We need to slowly include more decision makers over time. I don’t know that the AF is willing to just open the flood gates and let every xGov into the proposal props. I stated in my original post, this is a stepping stone to including more and more stakeholders over time, just like we slowly decentralize the consensus mechanism over time.

#6: If AF is indeed ok with this, I 100% agree. I am just not sure they were willing to give up so much power, so a committee seemed like a stepping stone in between.

#9: The issue with 1 Algo, 1 Vote kind of leaves us at a point where the entirety of the decision is in the hands of just a few people, and really all of this is pointless though. It is going to take time for all that Algo to slowly decentralize itself over new buyers. Years and years.

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I’d like to touch on the latter two points as well.

In the case of “committees”, I like the example the newly formed Algorand Ventures is setting in their structure with what amounts to Heads of various committees already, which we’re simply calling “Verticals”. It would seem intuitive to have our xGovs organized in a similar manner in order to neatly fit into Ventures’ workflow as well when it came time to putting all proposals from xGov and Ventures to the general vote. There are probably other ways to accomplish this, but this seemed the easiest solution to me. This, in addition to @oysterpack’s ARC-33 comments allowing an xGov to abstain from a vote without penalty, would seem to allow xGovs to naturally file into variously aligned xGov Verticals according to their knowledge-base.

As to the 1 Algo 1 Vote vs KYC. I would argue that any solution that retains a designed balance of power within xGov with built-in checks-and-balances, as ARC 33 seems to suggest (referencing lines about “suboptimal behavior” and possible consequences therefrom), and a way for xGovs to self-govern (with or without the Foundation depending on the severity of a given incident), would not necessarily need KYC as a requirement. The challenge will be to design the system in such a way that “suboptimal behavior” such as Sybil-style attacks would do more self-harm than harm to the ecosystem and should be actionable by their fellow xGovs with the full support of the Foundation.

Hi @Adri @Massimo,

my feedback regarding the published info about xGovs.

I have bad feeling that what you want to achieve is bad solution.

Let me go first through your list of questions:

The types of reward-bearing activities that SHOULD be included in the qualification list (ie. general governance)

If your intention is to create list of qualified stakeholders in the community, it should not be only rewards based from the foundation.

I suggest following: Major youtube and twitter influencers, node runners, everyone who successfully delivered product to AF grant, general governance

However i would prefer categorized delegation. If i know someone good in IT, i may delegate my voting power to him and he can decide on git pulls. I should be able to see the list of economic governors and i may select one of them according to his previous votes.

Whether xGovs MUST vote on all measures to keep their status

I believe the general governors should not loose their rewards. Call the governance reward just DeFi support and hack to compare with other cryptos where they must lock in order the network to work. Make governance decisions just value added for the distribution to support DeFi.

I hope you want to do good and frequent questions in xgov, and it makes no sense to loose status if one goes on 2 week long vacation and does not have internet.

Whether xGovs tokens SHOULD be sold/transferred or SHOULD be burned when exiting the xGov DAO

Please think of better solution, such as in the VoteCoin standard with delegation of voting power.

Do we really need another governance token for algorand?

Whether xGovs tokens expire after a year or gain more voting power if the stake remains in the DAO

Please change concept of you see the governance. Algo token is fine to do efficient governance.

Whether there SHOULD be a minimum and a maximum amount of Algos required to become an xGov

I believe there should be only one algorand governance. One where people can delegate their stake in knowledge based manner. If i trust for example Ryan in IT, i should be able to delegate my voting power to him. If I vote, Ryan will not get my voting power, and if I do not vote on specific matter, Ryan will get my voting power. Lets call people with minimum of voting delegation Governors, and lets give them more power such as asking a question.

The maximum does not make sense because all users can split their accounts. Only if you would do KYC.

Whether there be a maximum amount of Algos that can be locked by xGovs for the each period, limiting the total number of xGovs

Lets see it from the perspective of person who owns 1 billion algos. He has quite waste of algos that he cannot sell (he does not want to dump price). If the xGovs will be deciding on projects which will receive grants, i would say he splits his accounts to number of xGovs accounts so that he has majority there and decides at the end of the voting session.

So if you want only whales to decide again, feel free to set the limit on total number of xGovs

Whether xGovs SHOULD be disqualified and lose their status if they behave in a suboptimal fashion

I dont understand this question. I hope you are not trying to say that xGovs will loose their status if they do not vote accordingly how someone wants.

What types of suboptimal behavior would trigger disqualification or loss of status?

None.

Whether new xGovs be allowed into the pool at every quarter or only once per year

If you do it correctly, people may change delegation every block. Thus delegators may loose their gained xGov status.

Community members can add their own questions and solutions to the above list
Question 1: Encrypted voting

There is reason on why government votings are hidden. The reason is that with open voting the weight of those who vote first is smaller because during the voting session it may encourage others who do not agree with the decision to step in.

Please addopt encrypted voting for duration of the voting session. The Vote Coin received the grant from AF to do this. If you are not open for cooperation, just copy it…

Solution

Please change your concept of the governance with following checklist:

  • Algorand governance should be able to decide on any DAO matter, mainly pull requests to the github, algo distribution to good projects and building community, and fee distribution
  • Algorand governance should be long term sustainable and cost efficient
  • Algorand users should have means to delegate their voting power in knowledge based manner
  • Participation in governance should be rewarded, extra work should be rewarded
  • Fairness of voting must be ensured. Encryption of users voting ballots during the voting session must be allowed.
  • Voting must be auditable and secure

Please check the vote coin standard and its implementation. A lot is already done.

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@Conscious @averagezen

I reread an old Medium article by @Massimo in which he wrote that the AF envisioned:

“A system for listing proposed measures, which is open to anyone in the Algorand community.”

I would need to hear an extremely compelling reason to be convinced why proposals should only be formulated by a closed committee.

I have no reason other than I didn’t think the AF was ready to let the floodgates open, I’d happily accept that…I was just trying to outline baby steps to get there, rather than go all in. Anything is better than the current system of deciding on what gets voted on, which is the AF comes up with a half-baked idea that doesn’t get implemented because no one is even in charge of Governance (until now).

The problem I think is that we are approaching the challenge of governance too lightly (a 70-line document on github, a topic in a forum and a twitter space to talk about it is not enough).
Such a complex topic requires a certain transparency and parsimony in doing so.
We need to structure the issue at the grassroots and with a road map that can give goals, broaden the discussion through speeches, roundtables, articles and academic papers in such a way that we can address the big issues of governance at the grassroots, above all for a good success in a still very unexplored terrain we must not be in a hurry - better safe than sorry -

At the communication/information level, it would be nice to implement:

  • An information hub must be created where all informations on the issue are accessible.

  • Clear and concise road map

  • Create even bi-weekly appointments to manage informal discussion spaces through speeches and roundtables with expert also outside the algorand ecosistem.

  • Concept maps to start simplifying information to a wider audience

At the level of deconstructing the problem I would like to see:

  • organigram to understand who is working behind

  • Open teams organised by a moderator in forums and calls to address a specific topic within the governance process. example requirements to become an xGov

In conclusion, I am afraid that we will never get to the bottom of the issue, only to have to face a thousand obstacles in the future because they have not been addressed before.

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