Following the resounding success of DAO Resolution Part 1, the DAO has clarified its purpose.
We must now clarify how we can accelerate towards accomplishing that purpose.
This post will focus on a - highly theoretical - Representative system. It is not intended as a proposal, but rather as a chance for public debate. Depending on how sentiment goes, we can go to a proposal accordingly.
Option 1: Representative System
After dozens of conversations and multiple proposals in the Jup Research Forum, it’s become clear that there are several problems with the current pace and scale of voting.
Problem #1: DAO is slowed down by vote backlogs. The DAO has grand ambitions, and must be able to act quickly to make those ambitions real. When the DAO was incepted it was imagined that every voter would participate in all of these things. But in order to ensure that all voters have a chance to weigh in on each proposal, we are often left with vote backlogs, slowing down the DAO’s progress.
At the time of this writing, there are at least 7 upcoming proposals that need to be voted on. If we were to space these out, 1 every two weeks, it would take us until the middle of Q3 just to clear the current backlog - assuming nothing else new/important comes up! Some votes are also time-sensitive and affected by external factors, making vote scheduling even more complex.
Problem #2: Some stakers are asking for fewer, but more meaningful votes. To paraphrase the great Biggie Smalls, mo’ votes, mo’ problems. With so many stakers, it’s unrealistic to expect every voter to be actively engaged every single week. There is a certain degree of bandwidth and attention that every vote requires to become adequately informed. Voters have lives, they have work, they have shifting priorities. In short, they are humans. They are not voting-machines. In times when we have tried doing many votes, back-to-back-to-back, voter dissatisfaction has grown dramatically. The DAO should ask something of its stakers, but it should not ask too much.
Currently, the Jupiter DAO functions as a direct democracy. Every vote requires the input of every eligible voter. This is not the way the real world works, and for good reason.
Instead of overwhelming ALL voters with every decision, Option 1 is to create a Representative system, where a limited number of Representatives vote on “small” proposals, while the full DAO votes on “big” proposals.
The Representatives would be democratically decided based on Delegated Stake Weight. The top 301 wallets by Delegated Stake Weight would become Representatives for other DAO voters only on proposals that require less than $350,000 (USDC + JUP) in funding. Anything above that threshold would still go to a full DAO vote.
The number of Representatives was chosen to be big enough to enable participation from a large number of community leaders while still keeping coordination manageable.
When a vote comes before the DAO Representatives, each Representative receives only 1 vote, regardless of their amount of Delegated Stake. This ensures equality amongst representatives so that no smaller groups can control the outcome of a representative vote via large amounts of stake and crowd out other voters. Further, each wallet could only delegate to a single Representative, to avoid whales being able to split their stake across multiple Representatives and controlling governance.
Any $JUP staker could campaign in the community in order to attract Delegated Stake. Even a small staker who can make a compelling argument or demonstrate their credibility can, in theory, accumulate enough stake to become a DAO Representative.
The beauty of this system is that any individual staker who WANTS to be involved in every proposal can still change their Representative on a vote-by-vote basis, in case their previously chosen Representative is voting against their interest. In this fashion, no one is disenfranchised, and can actively participate if they want to. But the vast majority of stakers would not need to pay close attention to governance on a day-to-day basis unless they wanted to.
The upside of this system is that the DAO would benefit from faster decision making (via Representatives who can vote weekly) and more agility. Stakers who are less interested in governance benefit from being able to rely on the opinions of trusted community leaders who attract delegated stake. And Stakers who are very interested in governance can change their delegation on a vote by vote basis to ensure their opinion is always heard. Further, it would create a class of Community Leaders who campaign, make their voices heard, and network within the community in order to attract Delegated Stake. This system relieves the vast majority of the stakers from having to remained involved in the day-to-day discussions of “small” budget decisions. The downside is that there may be some people who want to directly vote themselves on every issue - big or small - and in this scenario they’d have to find a Representative who matches their viewpoint and moving their Delegation, rather than voting themselves directly.
Both the specific number of Representatives (e.g. 301) and the budget threshold ($350k) are up for discussion - would love to know your thoughts below!
Option 2: Opt-In Delegation
The alternative system would be to create an OPTIONAL delegation program.
In this system, every single vote would remain a full DAO vote. But individuals who didn’t want to participate could simply delegate their stake to someone else that they trust.
This system has the added benefit of helping those with multiple wallets consolidate their voting power into one wallet, rather than needing to manually vote with every wallet they have.
The upside is that everyone directly votes from their own wallet in every decision unless they decide to actively delegate away their voting power. It will continue on the DAO’s path of widespread voter participation and ensure that every single DAO vote has a more direct social mandate, since every vote is offered to everybody.
The downside is that every vote will still require coordinating across the entire DAO, rather than a concentrated number of Representatives who can, in theory, move more quickly and remain more engaged. That means, likely, fewer votes to avoid voter dissatisfaction.
Logistics of Both Systems
We’d begin by creating a new governance website that lets all JUP stakers delegate their stake to another wallet. On that website, each wallet’s prior voting history would be shown, along with their jup_research and discord username (and, optionally, their Twitter username). With 1 click, a JUP Staker would be able to delegate their stake to any other wallet.
In option 1, the top 301 recipients of Delegated Stake would then become DAO Representatives. Stakers can delegate to themselves or to another person with the entirety of their JUP. We will not allow the splitting of stake, to avoid a situation where individual whales are able to divide their stake and take control of governance.
In option 2, anyone who has voting power would vote directly.
Active Staking Rewards
Delegating stake is a valuable activity - by delegating your stake, you are identifying and empowering community leaders. Under the J4J ethos, this valuable activity should still be rewarded.
In Option 1 (Representatives), a delegator would receive ASR on Representative Votes only if their Representative actually voted. This provides an incentive for stakers to ensure they are delegating to active Representatives who are paying attention.
In Option 2 (Opt-In Delegation), a delegator would receive ASR for every vote they participate in, since every vote would be a full DAO vote.
The Decisions In Front of Us
There are three questions to figure out before we take this to a full DAO vote.
- Should we have optional Delegation, or mandatory Representatives (limited to small budget-impact votes)?
- If Representatives, how many should we have?
- If Representatives, what should the budget threshold be for something to be a Representative vote, vs. a Full DAO vote?
As always, looking forward to seeing your ideas below!
