DAO Resolution #2: The Proposal Process
The Jupiter DAO was not born perfect. But the beauty of our DAO is our ability to take steps towards perfection with each proposal.
Today, we propose a draft of DAO Resolution #2, all about the proposal processes. Specifically, we want to revisit and solicit community feedback on 2 key dimensions: thresholds for the passing of votes and Work Group $JUP allocations.
While contained together in this post, each area would receive its own vote, so that voters can express opinions on each area individually.
DAO Resolution 2A: Voting Thresholds and “Abstain”
The power of a full DAO vote is to give a resounding social mandate to the proposal in question.
When done well, passed votes are unimpeachable indications of voter sentiment around a proposal. Ensuring that every “Passed” proposal is widely accepted as the will of the DAO is an important piece of legitimacy and credibility for DAO proposals.
Right now, DAO votes are passed by simple majority. But that can result in some cases where a rather large minority are unhappy with the decision of the rest of the DAO.
The principle here is that DAO votes should be widely agreed upon by a supermajority of the community. The DAO treasury and the Jupiverse as a whole are precious - they should be leveraged only when there is a very clear agreement to do so.
Consequently, we propose increasing the passing threshold to 65% for simple yes/no votes.
This would have the clear benefit of ensuring that the only things that the DAO executes on are things that have a broad base of support. Proposers would need to do more coalition-building, take into account more perspectives, and campaign more actively for their proposals. This is a net improvement to the state of the DAO.
But for this system to work, we need to remove Abstain as a default voting option.
On a principled level, “Abstain” goes against the core concept of Active Staking Rewards. ASR is given to those to give their opinion/perspective to the DAO - “Abstain” is not an opinion, but rather a lack of opinion.
On a practical level, Abstain is regularly getting 10-15% of votes on each proposal. This is diluting the social mandate of the DAO, and making it harder to understand how people actually feel. Further, from the perspective of a supermajority voting threshold, Abstain functions as a “No” vote, making it unnecessarily difficult for proposals to pass the supermajority.
Together, these two changes (increasing the voting threshold and removing abstain) will make the DAO’s social mandate substantially stronger while ensuring that the DAO has a clearer gauge of sentiment from its voters.
DAO Resolution 2B: Work Group $JUP Allocations
One of the most contentious parts of any Work Group vote is the $JUP allocation.
Many voters have reasonably said that the FUD arises from a lack of alignment and accountability. Because $JUP allocations are requested in advance of the work being completed, there is the potential for a Work Group to coast to the finish line of their term and receive their $JUP, regardless of how they performed.
While we have not seen this happen in practice, it is indeed a theoretical problem worth solving to future-proof the DAO.
The ideal system would instead only allocate $JUP at the end of the term, and should be tied to the scale of the impact the Work Group had towards the DAO’s mission of accelerating the growth of Jupiter’s products, community, and ideas.
The ideal system would have variable rewards, such that those who perform better receive more $JUP, and those who don’t receive less $JUP.
And the ideal system would have a clear and defined accountability vote for every Work Group.
For that reason, we propose 4 changes to the current Work Group structuring:
First, future Work Groups should be limited to 1 year term per proposal. Currently, WGs propose for a multi-year JUP allocation along a single year operating budget. If this proposal is passed, future WGs would only think in 1 year increments. They can, of course, propose a renewal, with a new operating budget for year 2.
Second, future WGs will not include $JUP in their initial budget proposals. Currently, they do. Future WGs would instead receive $JUP retroactively at the end of their 1 year term, based on their performance (more on this below).
Third, each WG would be required to include formalized Measures of Success in their proposal that directly relate to the DAO’s mission. Currently, there is a suggestion for WGs to include this information in their proposal under the recommended proposal guidelines. To enable flexibility, these Measures do not need to be specific milestones (e.g. 1m Views on Youtube). But it is important that each WG can articulate what specifically they are doing to help the DAO. Likely, this will be a small set of metrics (1-5), both qualitative and quantitative, that can be used to evaluate performance at the end of the 1 year term.
Finally, each WG will get a formal Performance Evaluation Vote at the end of their 1 year term. The DAO (or Representatives of the DAO, should they exist in the future) will vote on the size of the $JUP bonus, based on the Measures of Success the WG identified in their initial proposal.
None of these changes would apply to the previously approved Work Groups, since their conditions were set/approved at the time of their vote. These changes would purely be forward-looking.
Benefits of the $JUP Bonus System
We believe this system is better for Work Groups, for the DAO, and for Jupiter as a whole.
The Work Groups remove the #1 FUD vector from their proposals. As anyone who has experienced will tell you, going through the vote process is extremely difficult. Removing the primary point of contention will make life substantially easier for Work Group members.
The DAO benefits by having a clearer sense of accountability and ensuring that $JUP is going to those who have put in the work to earn it.
And Jupiter benefits by becoming more of a talent magnet. Currently, the FUD around $JUP allocations is preventing many talented folks from participating in the DAO. By creating a standardized system that enables talent (from both outside and inside the community) to have more predictability, we increase Jupiter’s growth potential.
Structuring of $JUP Bonuses
We propose that the $JUP bonuses should be allocated on a tiered basis, rather than decided for each WG individually. Doing the latter will again stir up FUD and resentment, just at a later date than the initial proposal.
Instead, we ought to create pre-defined tiers for $JUP allocations that apply to all Work Groups, regardless of their scope.
These tiers would be tied to the number of people in the WG itself.
Our initial suggestion (very much up for community discussion!) would be something like the following:
Tier 1 (Below Expectations): for WGs that have done substantially less than expected, the $JUP bonus pool will be 25,000 $JUP per member. This would be the bottom tier in order to ensure that all WG Members know that there is some JUP coming their way for the energy and effort they have put in.
Tier 2 (As Expected): for WGs that have done some good work, but not up to the initial expectation, the $JUP bonus pool will be 75,000 $JUP per fulltime Member.
Tier 3 (Above Expectations): For WGs that have done an adequate job, the $JUP bonus pool will be 100,000 $JUP per fulltime Member.
Tier 4 (Critical for DAO Success): For WGs that have crushed it, the $JUP bonus pool will be 150,000 $JUP per fulltime Member.
In all cases, the headcount would be determined by the size of the initial WG in the proposal. This creates a natural incentive not to bloat the WG over time and add more headcount just for the sake of it.
There are likely other ways to also determine how large the bonus pool should be (e.g. including part-time contributors, making it a flat amount irrespective of number of people in the WG, making it a % of operating budget, denominate it in $ terms defined at the beginning of the WG’s term rather than in raw $JUP for more predictability, etc) -would love to hear ideas in the comments below!
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*This is a draft proposal - to get to final form, we need your thoughts! Please drop your ideas, suggestions, and revisions down below. *
J4J.