RFC - Governance Revamp (Hybrid System)

Governance
1

Governance Revamp - Hybrid System

SUMMARY

This governance proposal aims to restructure Decentraland DAO’s decision-making processes by introducing a multi-faceted approach to governance. This approach combines using the current token-weighted system for certain types of proposals while also integrating a token & reputation-weighted strategy for other proposals.

ABSTRACT

This proposal seeks to distribute decision-making power equitably among stakeholders while fostering community engagement and accountability. This will be done by combining token-weighted mechanisms with reputation-based signaling and introducing a body of temporary councils composed of recognized community members for more critical proposals, like larger grant allocations.

MOTIVATION

Ultimately, the approach a DAO chooses for its VP structure will depend on its specific goals and the type of decisions it needs to make at any particular stage of its governance process. Different approaches to VP distribution have benefits and drawbacks that may vary between DAOs, depending on their needs and goals.

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Currently, Decentraland DAO could best be described as a stake-weighted voting system because voting power (VP) is directly associated with the amount of stake that a user has (e.g. 1 VP = 1 MANA). VP is accrued through LAND ownership (1 LAND = 2,000 VP), MANA holdings (1 MANA = 1 VP), and Name ownership (1 Name = 100 VP). While there have been some changes to Decentraland’s VP system since the DAOs formation, all modifications remain within the stake-weighted voting modality.

The question of VP distribution has continuously received community scrutiny, as large, single-wallet votes – whales – were able to pass measures and grants when there was not broad community consensus, or in the face of broad opposition. In other instances, a vote was made at the last minute, “flipping” the outcome of a vote and leaving no time for community mobilization or response.

INTRODUCING REPUTATION TO THE GOVERNANCE SYSTEM

This approach advocates for the allocation of distinct weight and significance to various forms of involvement in the DAO’s decision-making processes, such as voting, facilitating discussions, crafting successful proposals, publishing wearables, and more. Through this methodology, participants have the opportunity to cultivate a reputation within the organization based on their active engagement history.

Leveraging the badges system, this reputation framework will serve as a mechanism to either restrict access to specific types of proposals or unlock additional benefits within the organization, thereby acknowledging and empowering the community’s contributions to the decision-making process.

Reputation functions as a form of incentive and as a way to safeguard DAO’s long-term interests and its treasury. As this could be seen as initially intangible when specific statuses correlate with increased decision-making influence, reputation emerges as a key factor within the governance system. Participants with a higher reputation may have more influence over decisions, reflecting a level of trust built over time. Using reputation as a criterion for membership or access to certain ‘privileges’ can help filter out bad actors and ensure that participants with a positive track record have a greater say in governance.

A HYBRID SYSTEM

A hybrid system that combines the existing stake-weighted approach with a reputation system could offers several benefits:

  • Safeguards the interests of digital assets and NFT holders while maintaining their relevance and importance in decision-making
  • Allows participants regardless of their token holdings, to earn influence through demonstrated expertise and dedication
  • Participants holding influence through both stake and reputation are incentivized to act accountable in the long-term interest of the platform, mitigating risks of short-term manipulation.
  • The flexibility of a combined system brings more scalability and modular growth for the governance system and allows tailored decision-making approaches to different contexts, enhancing overall efficiency and effectiveness of governance processes within the decentralized organization.

RANDOM FACTOR

Introducing a random factor into selection processes can significantly enhance the transparency, fairness, and diversity of viewpoints within the governance system. By utilizing raffles to determine the composition of different groups that will enhance the decision making process, the risk of manipulation or bias is minimized, fostering a transparent process where every eligible participant has an equal chance of selection. These raffles will be organized by assembling pools of candidates who meet specific skill criteria and possess a certain level of reputation. The pool of applicants and the random selection process will ensure that only suitable candidates are chosen through an unbiased mechanism.

SPECIFICATION

Governance system and decentralized decision-making mechanisms will be set up in three different layers. Badges that will be taken into consideration, though not exclusively, for the following purposes include:

Existing

  • Land OWNER

  • Metaverse Studios

  • Decentraland Legislator

  • Wearable Creator (Mid Tier)

Potential (not limited to)

  • Grantee (Grant finished, no revocations)

  • Working Group Facilitator

  • Platform Contributor (GitHub merged PR and/or Canny request implemented by Foundation).

  • Ecosystem Service Provider (Bid winner, no revocations)

To access all levels of governance, possessing a NAME will be a fundamental requirement aimed at partially mitigating potential sybil attacks, and to demonstrate a certain degree of “commitment” through an initial investment in DCL assets.

1- Token Weighted Governance + NAME

Maintain the current token-weighted voting power (VP) system for all general DAO proposals and projects funded by the DAO below USD50K (Lower Tier).

General Binding Governance Proposals will now be “Constitutional Binding Governance Proposals” (CBP). CBPs will represent all binding decisions adopted by the DAO through the three-staged governance process that are not related to protocol smart-contract updates.

2- Token Weighted + NAME and/or Reputation (Badges)

Introduce “Protocol Governance Binding Proposal” (PGB) as a new type of proposal for voting on smart contract protocol updates (MarketPlace, Wearables, Catalysts, LAND), requiring holders to possess a NAME and certain badges, indicating their contributions to the platform.

[Governance Process]

  • PGBs will adhere to the standard three-stage governance process. However, when advancing a draft proposal to a binding status, if it pertains to a protocol update, the author must indicate this option. Conversely, if a Binding Governance Proposal suggests a smart contract update without being identified as such, it will be deemed invalid.
  • Community members holding a NAME and X badge(s) will have the opportunity to submit and cast their votes on these proposals utilizing their entire voting power.

3- Grants Council - 4 possible approachs

For projects funded by the DAO +USD50K (Upper Tier). Includes Bidding and Tendering framework.

OPTION 1

  • Establish a temporary council of 9-12 members to approve/reject grants.
  • Applicants must hold a NAME and specific badges, have a certain tenure in the platform, at least 6-months participating in the DAO, compliant with the Code of Ethics. Members will be selected through a random raffle process. → RANDOM FACTOR.
  • Every 6 months, new applications are accepted, and a new raffle is conducted. Council members in active service may seek to renew their mandate for only one consecutive term.
  • Within the 9-12 Council slots, there will be a specified quota allocated to each group of members based on their distinct skills and reputation.
  • Removal: Failing to cast a vote results in immediate removal. Members can also be removed with a 2/3 vote from the rest of the council.
  • Compensation: Each member of the temporary council will receive USD X for each assessment and vote cast, with this compensation covering gas fees (if on-chain voting is implemented). → NOT MANDATORY, OPEN TO DISCUSSION

[Governance Process]

  • For submitting funding requests (Higher Tier), proposals are initially presented in the forum Governance section for community and council feedback. After a 5-day feedback period, proposals undergo final adjustments (3-5 days) before formal submission. As a last step, the requester will submit a proposal for a voting with a 7-day duration or a variable voting period based on the scale and impact of the proposal, where each council member will vote (1 representative, 1 vote).

OPTION 2

  • Establish a body -pool- of ~20 members based on reputation and a random selection of 5 members for each Grant review/voting, to approve/reject fund allocations.
  • Applicants must hold a NAME, be MANA holders, hold specific badges, have a certain tenure in the platform, at least 6-months participating in the DAO, be compliant with the Code of Ethics, and be selected through a random raffle process. → RANDOM FACTOR.
  • Within the 20 Council slots, there will be a specified quota allocated to each group of members based on their distinct skills and reputation.
  • For each funds allocation voting, a raffle will be conducted and 5 council members from the full body will be selected to vote based on the funds request category.
  • Removal: Failing to cast a vote results in immediate removal. Members can be removed with a 2/3 vote from the rest of the council.
  • Compensation: Each member of the temporary council will receive USD X for each assessment and vote cast, with compensation covering gas fees. → NOT MANDATORY, OPEN TO DISCUSSION

[Governance Process]

  • For submitting funding requests (Higher Tier), proposals are initially presented in the forum Governance section for community and council feedback. After a 5-day feedback period, proposals undergo final adjustments (3-5 days) before formal submission. As a last step, the requester will submit a proposal for a voting with a 7-day duration or a variable voting period based on the scale and impact of the proposal, where each one of the 5 raffled council members will vote (1 representative, 1 vote).

OPTION 3

No matter how Council members are selected, the Council reviews, assesses and votes, but the result will be to decide if there will be an open voting for the community (filtering-gatekeeping). This will mean that the Council will be just another instance before the community voting with a BINDING outcome.

OPTION 4

Either OPTION 1 or OPTION 2, but a voting in the DAO will run in parallel. The community voting result will have a weight of 1 VOTE (could be more heavy weighted, X votes) in the Council voting.

IMPACTS

  • Empowerment of active contributors through reputation-based incentives.
  • Enhanced transparency, fairness and accountability through community feedback mechanisms and introducing the random factor.
  • Promotion of platform development and innovation through targeted and strategic grant allocations.
  • Sybil attack mitigation.

IMPLEMENTATION PATHWAYS

  1. Governance Squad will develop the technical infrastructure necessary to integrate reputation-based incentives into the governance system.
  2. Define which, contributions, badges and tiers will allow community members to apply for the council
  3. Establish clear criteria and procedures for council member selection, rotation, and removal.
  4. Review compensation options for council members, considering $X per review + assessment + vote. → NOT MANDATORY, OPEN TO DISCUSSION

CONCLUSIONS

This governance proposal outlines a comprehensive framework for enhancing decision-making processes within the Decentraland DAO. Combining a token-weighted mechanism with reputation-based incentives and establishing a rotating Council, will enable us to create a governance structure that is both inclusive and effective in driving the platform’s development forward. We believe that these changes will foster greater community engagement, transparency, fairness, and accountability, ultimately contributing to the long-term success of the DAO and Decentraland ecosystem as a whole.

2 Likes
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Firstly, the title is very misleading. It should be “Centralization of Decentraland DAO.”

Even after creating the expensive Grant Support Squad and Revocation Committee, you still can’t control the “BAD ACTORS” these Sqauds can pause or revoke grants. What’s the point of these squads if they’re not effective?

The phrase “REPUTATION BASED” refers to favored individuals who always listen and obey the corrupt position holders. These are the people who don’t apply for grants themselves but benefit from various grants worth thousands of dollars and execute voting by discussions in private discord chats . They are the same names, same 20 people present at town halls because others are not active as the DAO is a very well gatekept and is a centralized castle.

You keep making these useless proposals just to appear busy, turning the entire ecosystem into a joke. The grant pause was a total political event based on internal discussions that the squads will continue to get grants, which was highly misleading if someone reads all the proposals. There was no alignment and meant something else and something else was executed. I hope people wake up and see how some central players are ruining the ecosystem for their own benefit.

In short: Anything which gives power to a small group or group of people is centralisation.

1 Like
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First I noticed Fehz was typing, then Fehz stopped and Ivey started typing. whats going on. Don’t worry about my comment; you’ll be able to pass it. I’m already familiar with your list of reputed people. The VP holders are helping you, and you’re helping them get grants and positions. It’s a great collaborative effort.

It will pass without the real community noticing, just 20-30 people running the DAO for their personal gain. Also, don’t worry, I’m not applying for any grants or upset about it. A man who has nothing to loose cannot be controlled rest all are following your corrupt system blindly.

1 Like
4

Which core unit submitted it?

Who voted for it?

Go back to tweeting about how people are trying to have you killed and stop disrespecting Fehz

You’ve drained as much from the dao as anyone and have more then enough money to live like a king in your country for the rest of your life.

Get over yourself

2 Likes
5

Maybe this is the first time when we follow the same wind direction.

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Hi People. I support the hybrid system in some form. We dedicated several strategic sessions with Fehz to discussing badges and how the DAO can leverage them. I believe badges have significant potential if approached carefully. Although there’s a big risk of gameability, I think there are ample ways to mitigate it.

I have the following comments:

  • Let’s test the system with non-financial proposals or allocate a separate test budget for it. We need statistics and analytics to make further decisions about its viability.

  • Rushing to diminish the stake-weighted voting system could create uncertainty about the project, lead to panic selling, and cause disappointment. A test period can mitigate centralization risks, where a few highly reputable members may sway significant decisions, and new participants might find it challenging to earn reputation, especially if established members already hold significant reputational weight.

  • I am strictly against centralization and do not align with gatekeeping proposals by a centralized ‘Grants Council’ , which does not fit with the spirit of Decentraland imo. I would support it if it were non-binding, serving merely as recommendations or reviews.

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Great ideas @Fehz ! I personally as have brought up several times think Capitalistic Voting would be the more logical and easier solution. Where Peoples VP is tied with how much USD value they contributed to the platform/DAO. And instead called GP (grant power) make it a completely different category form VP. Examples You spend $10,000 in Wearable Submission fees and $8,000 of it goes to the DAO you get 8,000 GP. And when someone pitches a grant for $60,000 they need to get 60,000 GP to get it not VP. Then it passes they GP then gets sent to the grantee they can then cash in for DAI or USDC etc. This will eliminate all vesting process’s since can just be replaced by escrow systems. It will also speed up process’s for example as @lastraum mentioned takes sometimes months putting a lot of development behind. This will also eliminate all legacy whale CarteL’s we have today, as some you call it lol. That stole their assets. The original owners would have already spent their GP. Either way thanks for continuing to make the system her better Fehz!

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After considering the possible advantages to implimenting a hybrid system, I am against this proposal. In my opinion, it further complicates an already unappealing process while simultaneously consolidating the decision making to a select group of chosen individuals.

The general sentiment of the community I have observed over the past several years is that we would like a diverification of power. This proposed solution seems to further disenfrancise the average community member.

I believe safeguarding the DAO treasury from bad actors is important, but not at the cost of further dividing our already broken community.

Diversify the power, don’t consolidate it further. Create a pathway for the average user to accrue VP over time, and utilize the existing squads to snuff out bad actors. I still think VP for L2 wearables is a good starting point.

1 Like
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I want to add that if the reputation based weight could be elaborated on I could reconsider my stance. From what I understand, repulation seems largely depenedent on participation in the DAO, with the exception being consideration for wearable creators.

  1. Are there additional actions/participation in the ecosystem that would allow for badges to be earned? For example, attending and hosting events, networking outside of the ecosystem to bring new users in, purchasing or holding assets, ect.

A large portion of the userbase has no interest in participating regularly in the DAO for various reasons.

  1. How exactly will the weighting be implimented? Will additional VP be granted, will it simply be a multiplicative factor of ones’ VP from assets they hold?

  2. How will restrictive badges work and what determines if a person is given a restriction badge? Does this mean they will never be able to participate in any voting? Is voting a really a privilege, or a right?

Example: Someone is proven to be a ‘bad actor’. Will they simply be excluded from grant requests, or would this restrict them from voting on any proposal.

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I’m against this solely for the “be compliant with the Code of Ethics” … they are vague and can easily be abused as a way to gate keep and as stated in this write up, completely eliminate people and their assets/influence on DCL.

I’m sure there are other reasons to not want this, ie people have invested real money in the current voting system. Changing the voting system further devalues DCL assets attached to Voting Power.

Active and contributing people in Decentraland already have plenty of “reputation” weight in the current system and votes, just by the sheer fact that people notice their works and deeds here. People with voting power support them and their efforts greatly for what they do. That is apparent in the votes themselves.

Are there not already safeguards to protect against bad actors? Couldn’t a new system be abused/used by bad actors just the same?

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Hi! Just my two cents on the matter.

Over the past months there were several discussions on how we could improve things and our current governance system was targeted as one of the causes of this discontent. The fact that large VP holders can nearly single-handedly pass a proposal due to their stake is naturally something that undermines the confidence in the voting system and compromises overall participation. This is the chance to do something about it and it requires a keen eye but an open mind as well.

There’s no perfect system, but the aim here is to have at least a balanced one. A hybrid system is one where large VP holders meet with average community members in the decision making. Each of those actors have their own interests and expectations and the system won’t account for those differences but will make them sit at the same table and discuss where we want to allocate our funds - and that’s huge. That, with the random factor giving an unbiased composition of that table, is what I believe to be a step in the right direction.

Lastly, I don’t believe this is somehow in detriment of decentralization. I honestly consider that the linear read organization - centralization just brings noise to all discussions and doesn’t allow for any productive outcomes. Several DAOs have faced the very same challenges we are facing and implemented similar solutions. We need to stop thinking we are somehow better or that we are the gatekeepers of decentralization when there are very specific issues that need to be addressed and maybe we can learn a thing or two from other people in the ecosystem.

Probably you partially agree with some of the items and disagree with the others and that’s perfectly reasonable. The proposal was drafted to be flexible and outline some key principles that then can be fine tuned and discussed so hopefully we can get right to it.

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This is not balancing, this is giving power to the people you wish to have power. This proposal will just shift the power to a different specific group of users decided by the writers of this proposal.

I also don’t believe in community voted councils, people will vote on their friends rather than for the appropriate skills.

Badges are bullshit, very arbitrary, distributed by a squad. Those badges could be specificly made to give power to the people the gov squad and facilitation squad want to. They will also likely by game-able and are likely to be farmed and abused.

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Hi! The reputation aspect is definitely a key component of the system and a couple of these Qs were discussed in the working groups so happy to take a shot in answering below.

  1. There were several actions recognized as valuable for the community and that should be rewarded (The list is in the summary of that working group session). Naturally the list could go on forever and it’s expected to be reviewed and updated but as a first step that was the draft. One thing worth mentioning regarding events is that the DAO HQs will have some features only available for certain badge holders (mostly related to participating in DAO events).
  2. Originally the thought was to have a multiplicative factor to existing VP but a recent Draft Proposal is proposing a 1:1 ratio for allocating VP to wearable creators. I guess we’ll see how that voting unfolds but for the future the multiplicative factor might be applicable.
  3. So there are no “restriction” or “bad actor” badges, sorry if it was a misunderstanding. The basic idea is that getting certain badge/s would allow you to vote on certain topics, that’s why there are 3 different voting tiers but all community members will be able to vote and naturally participate.

Hope this answered some of these!

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Hi! The CoE requirement is certainly a fair point to discuss and just to be super clear - by no means assets are compromised by it’s aplication. The spirit of the CoE is to draw a line on coexistence principles and how we treat each other, nothing more and nothing less, and it’s naturally tied to context and to the multiple reads of the same situation. We considered the requirement as such because most of community members don’t have any sanction whatsoever and they can engage and participate actively without falling into behaviour that passes that thin line. Anyway the requirement as such can be discussed!

On the other hand, I think you are describing exactly were our system is at: stake vs reputation. The aim of the proposal is to have those actors discuss on the same table and try to align before going into a voting. Members who have invested and hold VP and members who don’t but are valuable to the community should be working closely. We think that this system would bring more consensus to proposals and thus a clearer view on were we want to focus our efforts on.

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Ivey

1m

There’s a whole lot of assumptions in that comment HP. How would we exactly decide the group of users? There’s even a random factor for selecting them to avoid any potential bias.

Regarding community voted councils, there’d be specific requirements so doesn’t matter who’s friends with who and the badges are the ones that we discussed during our working group sessions so nothing about being tailor made whatsoever.

As I said, this is a draft and super open to some honest recomendations so happy to hear some from you.

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A random selection of CartL members stays CartL members…

That quote by itself is contradictory, of course the people in those working group sessions will tailor the badges so it fits themselves…

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Well not really, people discussed about general contributions to the community like Canny requests, attending events, submitting werables and what not. I don’t believe that brainstorm was out of personal interest. Also rewards are not delimited yet so it can be something as simple as getting a recognition as far as VP (i.e I don’t think the working group facilitator badge should have VP)

And I think that it’s highly unlikely that the whole composition aligns, the idea is to have a plural debate before going into a voting.

Again, would love to hear how this proposal could be improved.

2 Likes
23

I fully support the idea of incorporating a reputation-based approach into the governance design of the Decentraland DAO. In recent years, we’ve observed how community members holding significant voting power (VP) but who do not actively participate have single-handedly passed proposals or influenced vote outcomes without community recourse.

The DAO’s governance mechanism, originating from the early days of decentralized governance, is now outdated. The token-weighted voting model has faced criticism from various quarters, not necessarily advocates of centralization while reputation-based voting is actively being tested in multiple DAOs as a way to fight power concentration (see references in Vitalik, Token Engineering Academy). While a complete overhaul of power distribution is challenging due to resistance from major stakeholders, a hybrid approach that empowers active community members who contribute positively to the ecosystem is a viable starting point. This approach may not fully address all governance issues but represents a significant improvement.

As the leader of the Governance Squad, responsible for implementing the technical solutions needed for the DAO’s operations, I confirm that the ideas proposed in this discussion are technically feasible. Additionally, while badges are currently awarded semi-automatically, they could be issued automatically based on governance proposals. Once a proposal defining a reputation badge and its criteria passes, we (or any future DAO maintainer) could develop the code to automatically grant badges whenever a user meets the specified criteria—similar to our current system with the Legislator, LAND owner, and Top Voter of the Month badges.

Regarding the implementation pathway, I support the use of VP multipliers for badge holders and the formation of a Projects Council (preferring ‘Projects’ over ‘Grants’ to prevent confusion with bid projects). This council should vote transparently, ensuring the community also has a voice in these decisions. Therefore, I endorse option 4 for the Council’s structure.

I would also suggest exploring other ideas already presented to the community in various Strategic sessions that could work alongside this revamp or on its own like the unused LAND VP decay or limitations or disincentives to last-minute proposal voting.

Finally, based on community feedback, I suggest that this proposal should be published and voted on point-by-point, similar to our approach with the Grant Restructuring program in 2023.

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You should be the last person to talk about respecting people. I feel sorry for Esteban for liking your troll-like comments, even though he is a victim of your madness and trolling.

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DAO officials are receiving enormous paychecks, and all we have are attempts to make the DAO more closed and centralized. Badges will be abused and given to a certain group, and we will have a “Grants for Friends” council.

Poor solution!