MakerDAO Know Your MIP, 25 Aug 2022

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From YouTube: Know Your MIP | MIP77 - 79 (Delegate MIP Set)

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Forum Post: https://forum.makerdao.com/t/know-your-mip-kym-13-makerdao-delegates-mip-set/17396

A

Hello, everyone um welcome to know your MIP episode number 13.. My name is yala I'm with gab Alpha, and we are here today to talk about the maker dial delegate, myth set so the quick agenda. It's um Paton will walk us through the mipset, so that's mips, 7778 and 79., and then we'll have a discussion.

A

So before we move into that, I will go through the usual Preamble that the call is being recorded. So we will try to not to speak.

B

A

Each other you can raise your hands, use a chat, and uh this time I will ask you if you can to keep the questions uh for the end for the discussion period. So we can try to focus on a on a productive discussion at the end um for sure as much as possible.

A

If you have like urgent questions, go for it um yeah and before we dive in we thought of doing on doing a little check-in that we call so just try to kind of focus and be together into something um that is kind of completely uh out of what we are doing right now. So I have a little question: I'm gonna, ask you all, and uh if you can answer that it would be awesome.

A

um So the question is: do you collect anything? I can start so do I collect anything. I am kind of minimalist. I I I tend to do a lot of garbage um just to get rid of all my stuff, but I I temporarily collect stuff, so I can say, like I recently collected Stones, very cool stones.

A

um Yeah who wants to go I can nominate someone, so I'm gonna nominate uh David go ahead. Do you collect anything.

C

uh Yeah actually I collect a handful of different things uh over the years, one of those things is knives. I have a nice collection of knives. I also have a collection of two dollar bills. uh Every time I get a two dollar bill from somewhere, I save it and I. Think I have a good, 50 or 60. Now uh and I also have an art collection, so I actually have I think uh about 20 plus pieces, many of which are like oil paintings.

C

Some are acrylics, some are like charcoal drawings uh and and yeah, and so those are my collections.

A

Nice, thanks for sharing, do you want to nominate some someone.

C

uh I nominee Joshua.

D

Yeah um I collect recipes, I, would say um or and and try to develop recipes. So that's my thing.

A

B

Want to nominate.

A

D

Oh um go ahead.

E

I'm, just gonna tell you mated, but uh I'll I'll jump in after you go. uh I was a pretty big rock collector I feel like a lot of kids kind of like that's, like your first thing, to collect uh that quickly, evolved into coins for me and a fascination with money. So maybe that's how I ended up here? Well, I'd still like to waste money on coins, that'll never be worth anything. But I can tell a cool story about uh I. Guess I'll ask Raphael I'm curious. What do you hey.

F

um So what what do I collect um actually more, like not physical things like experiences and places, because I'm traveling a lot so I can't keep a lot of stuff with me, makes it kind of hard to to like get deep into the actual collectors game. So that's it um nominating code night.

G

Sure um I don't collect too much, or do you like to collect I, guess mementos from the different places I visited like maybe like a coffee coaster or a mug or something yeah.

H

And I guess: if I need to nominate someone, I will nominate uh paper.

I

I collect money, I think Tim hasn't gone yet so he can go.

J

And what were you saying what we collect.

F

J

I mean Post-its dude. Product managers are the worst.

C

A

Yeah I already said mine, it was Stones, lately, um I think kyanga, it's a you can go ahead. We are asking if you collect anything. What do you collect? Yes, Stones team.

E

uh You can also go Contemporary Art, we're getting from uh very cool.

B

Go for a minute: I'll jump in um I, don't collect anything but I I tend to build up lots of books and so I've recently moved and so I don't have as many books as I would like. But you can see a small pile developing on the uh shelf next to me, so it had to be books.

A

Great awesome I think we all did it participated cool great, so let's go back a little bit to what we are here for today. um um So thanks. Thank you, everyone uh for being here for joining us. uh So the intention of the day we are gathered here to explore the mipset together and we hope that at the end we get precious inputs to improve it, uh to fight, find some common ground and eventually sketch the final draft.

A

So without further Ado you can go ahead. uh Peyton if you are ready to the presentation.

E

Can you, of course, I close, my one tab, so let me fix that before I press share problem with rehearsing I guess there it is okay.

E

That wants to be the screen. I want Let's Go, full string, I'm, going to share nothing like here, technological incompetent, showing on his own call, but I think we're up and running. uh Let me know if there's any problems uh seeing my screen here, all right, so ultimately we're here today to talk about the delegation nip set.

E

um We really appreciate everyone coming out, uh so we can have this call. Basically, Our intention is to make sure everyone gets a chance to a know. What's in these mips and be engaged uh with with their content uh desired outcome. For this call, uh we would love to walk away feeling like people got their questions addressed uh feeling like we got some good feedback for these mips uh and just a general temperature check on like a is this, an upset that the community is generally supporting uh is cautious to support against.

E

uh Basically, we want to know um this is in request for common space and- and we really do mean that right like we, we want your comments and we want to make this the best possible.

E

um It said we can so I really appreciate you all taking the time to come out here and and help us make this better.

E

So I thought it might be a little helpful before we get uh too into things just to go over like a brief history of Delegation App Maker to kind of figure out where we got here and why um and the quote unquote old days of maker I'm, probably not old enough to say that, but at least in the old days of the Dao uh it was really frustrating.

E

When you'd write a proposal, because uh you know big whales would come in and vote uh most things would get accepted, but every now and then your thing wouldn't be rejected. And uh you wouldn't know why uh every you know.

E

Sometimes the VCS took a step of like coming to The Forum and explaining their reasoning, which is really awesome, but most of the time like really it wasn't a priority for them right their their money managers, they're trying to make money in their investment they're, not trying to explain their reasoning on on every vote that we put up. You know multiple times a week or what have you um so that kind of contrasts with the general decentralization roadmap of the protocol?

E

um And that's because like uh in order to be able to understand like a.

E

Sorry not sure, quite out of phrase that, but when the program when the protocol wants to decentralize right, the delegation was always looked to be a key factor of that, and that's because uh when you're, a delegate you are someone who can say Hey, you know I'm I'm committing I'm opting into being a person that votes for other people. You know I'm willing to express my reasoning to tell you what I think why I'm voting I want to gain more mkr and I want to use it. I want to put it to work.

E

So that's just a much better state for uh governance in general, when people are able to tell you, you know why proposals are are rejected or uh engaged in that feedback. So I linked a blog post on this, so I can add the slides to our form later. But uh this was a blog post from from the maker foundation and obviously room's input in it and I want to say April of 2020..

E

So this was a couple years old and it was basically like all right well for decentralization we're we're going to need delegation uh fast forward a little bit. The foundation starts to dissolve. uh We still don't have delegation, uh so we kind of get to work to that and the Dow is as one of our first priorities from a governance standpoint and we had the first delegate contract spun up in July of 2021.

E

uh I. Think a few people in this room uh were awesome and were part of the kind of stakeholder calls we had when talking about the system and and how we should put it into place. uh One interesting decision from that process was at the onset. There was no formal admit uh defining what delegation was that's, because the process for creating a delegate contract was permissionless and at the time that we spun it up. uh It also had no benefits so I was like.

E

Well, we don't we, we can put out these rules, so we think a recognized delegate should be, but at the time there's no benefits like there's. There's no need to put it through a mitch process. uh When we basically don't even know what this is going to become, and it doesn't require nkr holders um handing over anything as part of the process, but uh eventually you kind of realize. Well, if people are going to be spending a bunch of time uh for delegation, they should probably be paid uh and kind of a broken assumption.

E

We had was that uh that would be sorted once there was enough mkr in the system. Essentially, we assume variable all the dogs aren't going to like the fact that they're not going to be paid so as soon as there's enough of them they'll kind of come together and propose a.

H

E

Structure but conflicts of interest, there's a whole bunch of reasonings. uh Why that assumption didn't quite pan out- and uh eventually we came with Joshua's on- is in the call to to work on nip 61, which defined our initial delegate, compensation that had a trial at least one major uh upgrade to it all that sort of thing, but uh that kind of gives you the groundwork for like okay. Well, how did we decide what what delegates are, how they should be compensated to begin with?

E

um It really is just dog rooting this from from the ground up. We, we started with the need for a contract and then the need for delegates now they need to like pay and and retain those people all right.

E

Making sure I'm not missing anything I think that's a pretty good transition into the the actual mips themselves. um So the three Maps we're discussing today are 77 78 and 79. uh They Define the delegate role, die, delegate, compensation and mkr compensation, uh which is a new addition, uh if accepted so I guess, like I tried to just grab the like, really important uh overtones here, there's a lot of different items. They are a long nipset, uh sorry for being Alpha and writing a lot of things that are dependent on each other.

E

um But here is kind of what I think is important to highlight uh at a base level for what nip77 does.

E

um Obviously, it's really important that we Define uh what what it means to be a delegate, but at the same time we don't want to say, like what is a good delegate versus a bad delegate right like obvious that they need to vote and communicate their votes for for the problems I laid out earlier. But beyond that, like we, don't really feel it's up to go about to say you know this is what makes a good delegate.

E

This is what makes a bad delegate, and it would be better if mkr holders could decide through through their delegation um in the map we Define all these words delegate, delegator, delegate, contract, Shadow, delegate, recognized delegate, uh so there is actually like a a nip If This Were to be passed.

E

That would say hey when we say this word: here's what it means um same thing with becoming a recognized delegate like that's, been a process run by gov Alpha, so we've had documentation published on it, but up until now it hasn't really been formalized and devoted by the mkr holders.

E

um Only the compensation aspect was up until now.

E

uh This includes the don't forget code of contact, uh defining some metrics, how they're, tabulated uh and and even ads in a resignation process, um just one of the oversights I. Think of how we're first thinking about this. We're like oh well, people will just stop delegating and and that'll be it, but you know there are. There may be times where you wish to step down before people stop delegating to you. uh So this kind of helps clear clarify that there are some like big changes in potential controversies uh from this one.

E

The other two MIP slides I, didn't make a slide like this for and that's because I think we'll kind of be talking about issues of like money and compensation, which I think are pretty clear in terms of aligning incentives and us trying to figure out like oh, is that too much or too little, um but I did want to kind of highlight the changes to the system and potential controversies uh as they've been coming up, one that we had a lot of internal debate on was this uh changing metric tracking uh right now, delegates metrics are lifetime.

E

uh Basically, every time they vote or don't vote from when the they become a recognized delegate, uh that'll impact their score, and that score is what is displayed uh to people, um we're changing that slightly and making the primary display a 12-month running score, so how you've been doing the best year as a delegate if you're recognized so again, uh while still maintaining lifetime scores.

E

um Basically, this we think, does a better job of saying, like Okay. Well, the last year is really the relevant part for how your delegates been performing right. If, if they voted in every single poll two years ago, that's probably not too relevant. Likewise, if they haven't voted in a month, that's that's, probably something you might want to have a pretty big impact on on the display scores um cool. So the other big thing uh some of you might recall this was a signal request by hasu that had some controversy around it.

E

We basically said hey. We are kind of planning to put this into a forthcoming MIP, but as of yet we don't have one so uh ASU kind of asked went through a signal process for a reset um that was declined by the community. In part, uh it seemed at least some of the feedback on the Forum was that um they wanted to see a system that could be applied to everybody. So this is that system that that valve for brainstorm, at least it would allow delegates to request one metric reset per 12 months.

E

So, basically, in the last 12 months, if you haven't user reset, you could use one by requesting one on the form, basically giving your reasoning saying: hey I need a reset. uh Xyz happen to me. So I missed this many votes or what have you um and then it would ultimately be up to the government's facilitators discretion wow.

E

The intent here isn't to block like a metric resets but uh I, don't know the the way it kind of interacts with the compensation formula. We basically just want to make it so people aren't trying to uh be like well I get one reset every 12 months. Let's try to use it, um I guess like aggressively or um kind of from a plus expected value standpoint rather than like hey. Something happened to me and I needed this reset.

E

um It's potential that that gets sticky. uh So that might be one area for for feedback I'd love to hear if it does make sense to leave it up to the governance facilitators for that final, okay or not um I think there's trade-offs to doing either way. But this is ultimately the way we decided to go with MIP, uh because it kind of adds a final way of protection of like okay, something fishy is going on here and now at least we're codified to stop it. If we were to recognize it.

F

E

Also clarifies that not voting for an executive will only her participation score if reasoning is uh not promptly provided uh some of you might recall in the Discord, this was kind of a back and forth with uh Chris black when he first started as a recognized delegate uh particularly ejected to the bundling of um of executive compensation, because that incentivized um that basically incentivize you to to maybe enforce a change that you didn't initially agree with um part of that's addressed later.

E

But the part that's valid here is we said: okay well, since there's no way to vote, no one executive, all you can do is not vote for it. uh If you provide your reasoning within 72 hours of that vote, uh then we will count it as participating because you at least let the community know that hey I'm not supporting this exact because of this, which I guess I, don't know, I feel, like maybe I'm, bringing this a little too personal.

E

But uh that's somewhat important for like me as a governance facilitator um because, like let's say, there's an issue where we can't get an executive pass like I need to know why that executive isn't passing like.

E

Is it that that one item is really controversial and the other three would be bass together um and the only way I can know that is if people are telling us why they're, not communicating or why they're not committing to an executive uh and then another change uh kind of resulting from that back and forth is Executives will now be weighted five times more than polls uh to kind of um account for the fact that they are very.

H

E

uh But occur far less frequently than polls do. Okay, so that hopefully gave you an idea of the system changes we are making um Unfortunately. They are all these things do interact with each other quite a bit, which is why we're pushing them forward as a set, uh rather than dropping them like one at a time. uh So I think it is important to start with the main one and get into the ramifications for for these other things um for mips MDA recognize.com should be fairly straightforward for people's already familiar with the mip61 system.

E

It essentially uh is is taking that formula and adding in a a maximum component as well. That's the only difference, um basically yeah. Well, that's the only difference in terms of like the the formula and then it's changing the parameters to the formula as well.

E

So uh in terms of what that means for delegates, uh it is not a huge difference uh based on where your scores are at today, and that's because essentially what we did is we raised the maximum amount, the maximum threshold and change the slope of the quadratic curve there. So basically, you're able to get more compensation by gathering more mkr, but uh your your present amount isn't changed too much. uh Based on this change, which was important to us as we did want this to essentially allow for for delegates to be more aggressive and in.

J

E

Kr for delegation, but not penalize those who have already been participating in the system and and want to continue to do so.

E

One big change that affects delegates is these. Payments would now become quarterly instead of monthly. um That is certainly a disadvantage of fifth year talking about uh becoming a recognized delegate to have your pay split up that much.

E

um However, we would hope it would become more sturdy, because it would also uh dictate that um delegate compensation payments are completely separated uh from from other executive items. uh That, like you know uh just about one or two weeks ago, we had a situation where there was a delay in the floor being broadcast. A potential delay and delegates receiving their compensation uh and uh sakyong is on the quality is expressing the.

F

E

Of frustration with with that system, which is quite understandable because uh in that particular instance, we had an item that had nothing to do with delegate compensation that was ultimately blocking the compensation from from going forward.

E

um So while this would limit the number of payouts to four a year compared to 12., uh we would hope that they would be a little bit more consistent. You would know when they're coming, you know, they'd be by themselves. So unless there was a true protocol level emergency, uh you wouldn't be subject to to getting delayed for compliments.

E

Foreign excellent um I mentioned the cap. One kind of peculiar thing there is like it's really bad. If the cap gets hit on the delegate companies, because it's an overall comp uh cap, which means that if you go over, everyone's pay has to be reduced. uh So the idea there is that delegates in particular uh would be the most active stakeholders who might notice, like hey, we've, added a bunch of delegates who qualify for a bunch of compensation. If we don't change the cap, everyone's gonna get slashed.

E

You know in the next quarter or what have you? um So we believe that this setup does allow enough time for, for that kind of Forward Thinking to take place and say: okay, uh we've got an issue with the cab too. We need to raise the cap. Do we need to adjust how we're paying delegates and then move forward based on that uh there's? Some clarification for metric calculations uh due to contract migration I think that's mostly just uh relevant to people who want to be recognized delegates.

E

Basically, this just makes it quite clear that, like a migration shouldn't affect your your scores, um you know we'll be adding the the two voting weights together will be keeping track of your your voting participation on the contracts that you're able to vote from, and not the ones that you're not all right and then uh finally establishes a process uh for changing any of the compensation parameters. uh Right now you have to go through like a bit for Amendment and um yeah.

E

It's a little bit more complicated than being able to change them, uh specifically by signal uh which this proposes.

E

Cool uh so now, potentially the most uh controversial part of this is MIP 79, which adds delegate mkr vesting. uh This isn't in the slide, but I do feel it's important to say this has been kind of a goal of called Alpha for a while. uh We don't have any opinion that is still like what the split should be between die comp and mkr.

E

Comp um we've proposed levels that we think are reasonable based on community feedback, but for us, what it's really more about is this idea that um mkr compensation is especially vested in KR. Compensation is much better for alignment than dye compensation, uh so having an element that is tied to the performance of nkr uh has has been kind of a goal for for our core unit, because we think it makes a more robust uh delegation system to have this in place and that's why we're proposing it.

E

uh We drew heavily from our own plan of how we propose uh and get our investing for our team, and that's we think it's it's a good plan uh that allows the Dow plenty of chances to intervene, uh while also um kind of being very crystal clear on how much mkr is being allocated, um because it's based on how much dye has been earned over the period. That means that uh you know it's a very simple math process.

E

We say all right. This much to die was uh earned. Here was the moving average over 12 months for mkr. That means the delegates are eligible for this much uh in garagesting, uh that's preferable in our opinion, to uh kind of a maximum cap of saying, like hey, you know up to this amount. If all delegates were to join, you know basically trying to to say all right.

E

Well, we can't have any more than this, uh but it'll be based on when people join, uh so we're going to ask them, get our holders to approve up to an amount and then clarify it later.

E

um It makes sense why you would want to do this as a core unit, but I think it's much less messy for the governance side to look at an actual amount of nkr to approve um cool I. Think I get all the slide points, except for the last potential uh most controversial is that it would apply it towards the entire history of the delegation program.

E

um This is in there because we don't think it's fair. uh The the pioneers of the program would get left out by it. So uh-huh we would be taking uh anyone who had been a delegate for up to six months um before this uh passes and applying it uh backwards. For those who have been a delegate for less than six months. Your time will kick in If This Were to be passed uh when you cross the six-month period.

E

uh So this is just our way of accounting and making sure that um everyone uh who served as a recognized delegate uh can be treated fairly, and um you know, particularly the people that took a chance on on a new program, are left out to dry when we compensate the people that that came in later.

E

Okay, uh my mouth is tired. I've been talking for a lot, and hopefully that wasn't like just a huge um what you want to call it rant. That's the word I'm. Looking for uh sorry, I'm gonna have a little break for an Energizer here, passing back to Gala get engaging before we talk about some of the points I laid out.

A

Yeah thanks uh Peyton that was cool, um yeah, so Orlando and Energizer, so that we then we can go ahead and do the discussion.

A

um So the idea of this little game is to um once again re come, come all together into an activity. So what's the goal here is to be able to count to 10..

A

um The thing is how we're gonna do it is everyone is going to turn off their cameras and no one is allowed to speak uh like over each other. So we have to count to 10 and then, if I say one and then someone goes two but then at the same time two people say three: then we restart and we have to get to 10.

A

yay. So let's go ahead and start right now.

F

G

B

H

F

Three three.

E

G

Two three four.

I

B

I

F

F

F

E

Six foreign.

F

H

H

A

No, we can totally do it once again, like let's try it once again, one.

E

F

B

I

J

F

Seven, eight nine.

E

A

Okay- let's say that then we could do it collectively, like that was the number we could all overlap.

J

Youtube YouTube will be so pleased.

E

Yeah that'll be a fun little break in the recording.

A

Great that was awesome. Thank you very much, so we can go ahead and start the discussion.

E

Yeah, let me get my slide back to the correct one um and yeah the reason we do that, like obviously it's hard when you can't talk like you start doing, social cues I, don't know if other people were like looking for mics, like I, realized, I needed to wait and see. If someone was on muting, you know little things like that and uh I think it kind of helps us remember like how easy it is like misinterpret to speak over each other to coordinate uh when you're, not communicating.

E

It's just really difficult, um so I think that's a great lead into this discussion topic where we talk about like all right. Well, has this proposal like we, we worked really hard internally, we talked about a bunch of these things. We sought feedback from others, we put it on a community, um but that doesn't mean that it's a good proposal and really the judge of whether it's a good proposal is like kind of the input and the value of stakeholders.

E

um So I really appreciate everyone who's here on this call and want to give everyone a chance to kind of weigh in ask questions uh and just have discourse about this. If it's a good idea, if there are changes that would make it a better idea, um we're also respected, we will also listen if, uh uh if you think we need to put the brakes on and the scene isn't ready, so um I just kind of want to iterate like this is as much the community's proposal as it is Arts um and yeah.

E

Thank you for being here and for helping shape.

E

E

Excellent Discord.

E

um Interesting because I made it full screen, it's confused. Sorry about that funk.

E

All right I'll make it full screen.

E

So obviously these three proposals have been in the uh RFC period for a little bit of time, which means we have got a lot of feedback on them uh on the Forum, uh I tried to grab like Salient points and questions uh and condense them on here, and if you don't see your point, it's not because I didn't think it was good uh just because I was trying to quickly uh grab as much as I could from the three different threads.

E

um So some feedback was that there's still no availability requirements for delegates. In the case of like emergency right, like we don't say, Hey, you have to always be able to respond in a next amount of time.

E

um That might be a good um thing to add in for for expectations of uh recognized delegate and also might not so uh I think that's potentially. All these are are good, jumping off points for the discussion. If any of them speak to you great, uh if they don't don't worry about them, I'm just gonna run through them, real, quick and and we'll see what the group here wants to talk about.

E

um We had a question of shouldn't. We be incentivizing like good voting, not just voting in general heard feedback that, if we're talking budget phrases for core units, uh should we really be talking about increasing Max delegate comp a lot of talk about compensation in general right, like our delegates, underpaid now like how much should they be paid, particularly if you add in nkr pricing, are they overpaid um and then finally, like?

E

Are we comfortable with this idea that you can self-fund a delegate right like either by delegating yourself, or maybe you have a friend, you have a bunch of mkr? You can essentially encourage them to go through the delegation process. Give them your stack of mkr and you've kind of just hired someone to work for a dow um on the government's end. That's like exciting right permissionless.

E

You can just onboard someone, but it's also potentially dangerous right, because people with access to mkr I can just decide that the protocol is now I'm going to start paying uh all the people they decide to give their mkr to um and that's the trade-off where we're dealing with cool, so I think that does a pretty good job of framing some of the feedback and I bet we'll have more here. I've already seen some questions come in so I'm going to go ahead and stop sharing and we'll go to General discussion.

E

um Gala I, don't know if we want to start with. Maybe some of the questions that came in earlier or if you have a preference, how we do that.

A

um You mean on the chat right now.

E

uh Correct I saw a few coming in earlier um yeah.

A

There was um foreign.

A

Then there was cold night uh concerned about the president retractive compensation sets for core units. How do we distinguish between good and bad requests for retractive compensation.

E

That's a fun question for me to answer, because I get to do the governance of the call it's up to you guys to decide, um but to try to say something uh helpful on the matter.

E

um The way the system works, people can always propose things retroactively and in some cases it's it's better right like to be able to say Hey. You know uh you weren't sure if this was going to work out or I took the liberty of doing all this work. Now it's been completed and you know I would I would like to receive compensation for it um that that could be a totally normal and perhaps even preferable route to go for some things.

E

uh The issue is, we don't know uh without pulling the community and asking what times that would be more appropriate or less appropriate, um so I think the work kind of speaks for itself to a certain extent right, like anyone can ask for a retroactive request and if a bunch are getting requested, it'll probably encourage more people to to request them, um but I will say so far. We haven't seen that many retroactive requests and of the ones that we have seen uh the community has been fairly supported of them.

E

um I would hope that, like you know, I wouldn't want that to be the element that that sinks, this mipset uh in particular because, like I said especially for for early delegates, they really did go out of them and say all right. Well, we don't know if we're going to get paid, how that's going to happen like we want to participate, we're taking on all this legal risk and like let's go, let's, let's try and do something uh totally fine.

E

If the community thinks it's not appropriate to compensate that, um but I I, you know we we did think about our reasoning, for including and in the proposal and Delta was justified.

A

Yeah there was also well Rafael, just wrote: how can we make it mitigate conflict of interest here.

F

Yeah, so basically, the question is a kind of delegates voting on their own comp is super like just like really um not not an easy thing to do, because, of course, like I mean I love getting paid right.

F

um So, like I, wonder if you, if you kind of, have some thoughts about how to approach that.

E

Definitely and yeah I think first step is to acknowledge that it is a sticky situation. Right, um you guys are, are the people that vote most frequently in the protocol and that vote with a particularly large weight um our arguments, essentially in the past, in terms of why you know we don't have specific rules about if delegates can vote in matters of delegate comp or any of that stuff as well I mean there's a few different arguments, but one that I personally kind of took to was you know these.

E

These are the people that are kind of in control of the protocol. uh A few of them can already collude to do things and in particular we trust them with a a lot of changes and and other things that that could potentially break die right. If you know, we think about worst case scenarios and bad decision making, uh you know essentially some delegate decisions could could destroy a decent portion of the D5 ecosystem.

E

um So we feel like the responsibility and the call to being a delegate is already quite High um having to vote on. Your own pay, like doesn't seem like it is, is exceeding that level at all I understand it's it's sticky for those that are involved and especially for outcome for Outsiders. Looking in it's like an easy point to say like oh, you know a conflict of interest. People are paying themselves that sort of thing um But. Ultimately, like uh delegates are the decision makers in the protocol.

E

They have to be trusted to to make decisions based on their delegators, and the fallback is essentially well if they were to propose something or approve something uh too extreme for themselves. Assumingly they're delegators would would hear about it and then undelegate from them, and then the next batch of delegates could could fix that overstep.

E

F

I think that that's a that's a fair point really um also like I thought a little bit about like alternative mechanisms but, like I, think everything gets so convoluted once you go down to the path. So that's you just sticking with the system and just trusting it is, is probably best for me, like the damn care. Harvesting issue is like like code night at that point, it's like it's tying into some difficulties with that that we see like across the board, not just with mkr. It's like how are the mkr surprised? What's the cliff?

F

What's the worst thing, is it a stream or a payout so, like um personally, I've said that in the chat that, like less die and more mkrm um compensation, I think that's just aligning interests well and also probably even having a cliff and then a vest over a longer period, so that there's like really um that thing but I think we already discussed that one more thing that I just have thought about is like. If you think about delegates, it's like protocol, politicians then have you thought about like the term limits to delegates.

F

Does that make sense or.

E

Yeah, that's uh certainly a valid consideration um that is kind of in a roundabout way wide delegate contracts expire every year. um That's kind of like a pseudo-turn limit. I guess you could say is because all right well, every year, at the very least, if they're going to keep their voting weight, their delegators have to reaffirm that they want to keep it with them.

E

um So that's not so much a term limit as it is a re-election, I guess, but uh hopefully functions in a similar way.

E

We're still young, so I think it would be kind of hard to come up with what might be a good term limit right now, like you know, do we follow politicians, let's say four years: it's like well delegation's been around for a little over one, and it was in really nice in stages in the start, uh so I'm not sure if we're ready to make that call on what an appropriate time frame is for for maximum um okay yeah.

E

That's why it's not in there uh half considered it, but uh ultimately kind of think that um delegate migration, the the leader to reaffirm your choice um at least solves for the issue of people. Just passively going along with uh whoever is there at the moment.

E

And go for it. Yeah.

D

Yeah I wanted to speak to this briefly, um so uh term limits is an idea like we can already do term limits. People uh you know make her maker could just undelegate from um the delegates every now and then so.

D

um I think what you mean term limits is kind of like a default uh agreement that um you know delegates will only serve for a certain amount of time. uh Okay, um so it it's. It's been in the like, adding something like term limits. Basically changes the defaults, um but but we'd still want to be able to um for a really outstanding, helpful delegates. We want them to be able to continue serving uh and for delegates that aren't really doing a great job. We'd like them to be.

D

You know, um you know, lose lose their uh influence sooner than the terminal term limit expiring. So um I guess what I'm trying to say is that uh having something like term limits is um actually just changes uh like it.

D

It sets like a default amount of time for these kinds of decisions to be made, but um you know it doesn't really change um the ability of maker uh to delegate an undelegate whenever they want I mean and then the other thing I guess is like job security like delegates want to know that they're, um uh you know that they can assume that they will. They will have yeah maker compensation for some uh default amount of time. But again um you know in the uh political Arena we we have. These things called recall.

D

Elections um that could be, you know in some jurisdictions can be um triggered by uh a certain number of petitions. So um again it's it's a it's a really a question of defaults, whether we want to default to having a certain amount of time or um or not, and whether we have those defaults or not. Like the actions of you know, a delegate um staying in office or or being uh forced to leave offices is we still have that ability to make that happen, whether we have these defaults or not,.

E

Thanks shash uh yeah, so they're probably a lot to consider and then there's enforcement to that side as well, um but that doesn't mean that, like the trade-offs weren't worth considering for sure, so thanks for bringing it okay, uh so David asked if there were any event charts yet for delegate com um says he knows here. Optimism has delegates in a lot of different places.

E

Have delegates as well uh I might actually call on paper here as I think you might have the most recent experience with looking into other systems, but on our end, I was going to pay one of our Alpha contributors to look into it and essentially was that there are very few other systems for uh compensating delegates and the ones that do exist. uh At least my assessment were largely based off of our uh formula. Come on, like I said, I know paper. Yes,.

I

That's correct: yeah, there's no compensation at um optimism, yet they are about to launch committees which the Committees will have some compensation, but delegates overall won't in the Committees I think are just for a trial period of three months or two months: um I. We are um gfx and flip side and another delegate are actually about to propose a Compensation Program at Hop. But again as p as Peyton says it's kind of modeled after maker, or at least at least at the very beginning,.

F

Always thinking about something as well, but the the proposal I've seen in in draft is also quite similar to ours. They want to innovate on that, though, like they see our model as like kind of the starting block to to then think about which, which I think is amazing, so yeah.

E

Yeah, it's a cool problem to have for sure it's like well we're kind of groundbreaking, and you know I see people mostly copying us, um but yeah. It does make it a little hard when you're trying to say like all right well, what's a fair number really depends what your benchmark is.

E

um I think I guess this might be a good time to address too, when when we present it on the GNR there's like some pushback that, like maybe we were presenting this because we felt like the the delegates- weren't good enough, um hopefully defended ourselves on that call saying, like that's gonna, be farther from the truth.

E

uh What we do think is there is like a very tangible limit to like how far a single person uh can go as a delegate right, um yeah yeah, so I was laughing at the can't count to 10 comments exercise earlier, uh but yeah. So there's a limit to like how much as one person you can really do um just in general and then particularly as a delegate.

E

Obviously you one would come back. This would be to form a delegation team uh and we've in fact, seen several teams uh join maker. For for that purpose, uh however, our compensation uh strategy or allocation, however, you want to describe it- was like very clearly meant to be like one decently paid person uh running running the delegation, so we felt like there was something converted.

G

E

And like we felt that the comp parameters might have been kind of artificially capping the the capacity of delegates, um Philly style, is kind of our our suspicion because, like I said boom you, if you're on Max salary is 144k, uh you can maybe hire one more person out of that plus you, depending on what your circumstances are, maybe two or three, if you're in a cheaper place, but uh basically uh with with The Gap at a 144k annually. The amount of outside help, whether it's legal or research, or even even just assist it right.

E

Like I, mean I, know, I get a ton of messages. So I can't imagine how many messages delegates get as well with people advocating for their programs. That sort of thing um so yeah roundabout way of saying, like uh not meant to to be a take on on the professionalization level of delegates, but rather uh an acknowledgment of of the type of um like self-selection. We were. We set up the initial program, basically yeah.

E

If, if you were someone who's really interested in in maker, uh it was very attractive because you could really leverage that personal knowledge a lot. uh But if you wanted to have broader ecosystem effects, uh I I think it is quite clear that you know we look at core unit budgets. For example, we see that, like there's very few, that come in under a million a year, and that makes sense because core units hire multiple people and they do multiple things.

E

So we're capping our delegates at 144k uh we're kind of severely limiting their their potential output of how they would like to pursue a delegation.

E

Cool, that's a bit overreact, sorry, but I do feel it's important to acknowledge that, like we are very appreciative of the delegates we have, and particularly the risks that they've taken on a new system um and our our primary goal is just to design a really good incentive mechanism that rewards people that are willing to put in more time and effort uh towards being at owner.

A

So we are getting close to the end of the call. uh Is there any like last question or comment?

A

um I see young guys coming there.

E

Yeah, that's a pretty good one too. If you don't mind me stepping and go or basically like the question is like how much available in character- and it's not really asking that but making the point that uh it seems like there's not a lot of available in KR to bring into uh the governance contract. uh Yeah I think that's something paper is as I could before as well between like custody concerns just general funds. Holdings liquidity pools uh it's hard to increase that overall number of open KR.

E

And yeah I guess I have a few different feelings right, because I I do suspect that the quote-unquote, easy sources are largely gone right like people are, are aware of them. uh They can apply to like a 16z, or you know, speak to to the funds that that old, uh large funds. But it's like pretty apparent to where the the super available ready to vote in KR is- and it's kind of just been being passed around between delegates.

F

E

For the most part on the contract, um Carver New Capital can always buy mkr from from these liquidity, pools right, there's just a ton of it just sitting out there waiting to be swapped.

E

um So that's one Avenue for pursuing more mkr uh we're also seeing more mkr vesting for core units. uh Now we're proposing it for delegates as well to be released. So we expect that would be in KR. That's also highly motivated to to participate uh if to not delegate outlay um but yeah.

E

We frankly, we don't suspect anyone to hit the the new cap of I think it was 30k mkr that we propose um at least not immediately um because yeah there's just not a lot to go around so unless some of the major holders decide to concentrate their Holdings, which isn't advisable to them, um we'll probably solve struggle to to get much higher than I. Don't know. 15 20 seems to be like kind of a reasonable maximum at the moment and Mark avenue comment that we should partner with exchanges to facilitate smaller delegations.

E

Yes, I think that would be hard doesn't mean we shouldn't do it, but uh just getting them to integrate the custody platforms was quite difficult on our end, uh so I imagine enabling small hotel delegation would be an even greater list.

E

And let me see, Raphael mentioned that'd be cool if delegated in care. It could still be used for something besides boating.

E

And I can be jazzed up and keep talking Governor's things all day, but I will let you do your line down, though.

A

Sure so, thank you very much for also thank you. Everyone for joining. um Let's give the discussions going on in the Forum and um we are having a call right after this one so meet your delegate number 18 with yeah no Ahmad and Zid. So if you can join us, that would be awesome. I'll drop the link here on the chat yeah. Thank you very much.

E

Thank you, Gala for hosting, and everyone for coming out uh really appreciate you, leaning into our participation and having an engaging, call, see you next time.