Proposal: Gauge Voting w/ "DAO Treasury"

Intro

As we expand with various workgroups, we will see more controversy and disagreement around approval of funding, fair valuation of services, and contestation of comparability. This is to be expected as we have members from all over the world with various experience, opportunities, economic and socioeconomic conditions. In short, “the right price” is something no one agrees on.

Proposal

  • Create a Grants Budget Pool that receives a total budget of $USDC each Quarter (3-months). Decided separately in “Budget Vote”.
  • Every Quarter, run a Gauge Vote for determining allocation to WG’s
  • WG’s are added or removed to the Gauge Voting options via DAO proposal.
  • Display the requested amount next to each WG on the voting UI
  • Display if requested amount goal has been reached or not during live vote.

UI Example:

Operations:

  1. Each quarter WG’s can submit reports on what they have done, what they wish to further do, and the nominated amount requested.
  2. Voters use their voting power to distribute their preference for funding to each Work group for that quarters budget. (Multiple Choice)
  3. Jupiter voting power will have a ‘post-result’ ratio evaluation as to how much $USDC each vote represents. See formula below;

Formula

a = Total budget for Quarter
b = Total Votes (JUP)
c = Ratio of $USDC per JUP (Rate)
d = Votes received by WG
e = Allocated amount for Workgroup

(a / b) = c
(d * c) = e

Example with $500,000 Budget, and 30,000,000 JUP used for voting
(500,000 / 30m) = 0.0166
(d * 0.0166) = Allocated amount in $USDC

w/
1m votes out of total 30m votes = $16,660 out of $500,000 budget
15m votes out of total 30m votes = $250,000 out of $500,000 budget

Rationale

By giving voters direct influence over operational budgets each quarter, we introduce the incentive for WG’s to meet the expectations of the DAO over and on-going basis. This also gives the DAO a method of recourse if voters become dissatisfied with any of the WG’s efforts. In this way, the DAO acts like a shareholder or sponsor of the working groups, while the groups themselves can operate more independently and autonomously. This is essentially giving the option to support centralized entities ‘on top of’ decentralized authority.

By removing the criteria of on-going consensus after approving release of funds, this creates the opportunity for gaming the system with good campaigning, only to fall short or walk away from delivering. We’re all too familiar with this if we think about our governments for a moment – the issue is not the centralized compartmentalized structure, it is the centralized authority over the Treasury.

It is important to integrate quarterly epochs of funding and funding requests – not only to put a control check on potential waste, but also because of the need for flexibility with estimating and changing costs over time. What we don’t want to see, is large-sum bulk requests for annual expenses and approving these with no guarantee (or in the case of this proposal – no need for a guarantee).

With gauge voting, we’re not approach requests with a binary yes/no – we’re essentially saying “lets see what you can do with this amount over the next 3 months”. Doing this encourages WG’s to be more efficient and resourceful, whilst demonstrating their value to the community on a more regular basis. This model also accommodates additive bonus/incentive where voters may wish to grant a working group more than they requested for the quarter.

Lastly, handing further responsibility over to voters to become more directly involved in fund allocation, will strongly encourage more engagement and thoughtful consideration around creating new workgroups. As it stands currently – any group can propose any amount of funding over any duration, and that goes to a coin weighted vote. There is a strong potential for exploiting this vulnerability – and objectively that vulnerability is ourselves; humans and their opportunistic disposition. It is something that need be control, but not via trust and promise – rather by removing the opportunity and temptation. Democratizing the Treasury removes that opportunity and temptation.

In saying that, I would like to say that most people are honest, fair, and simply want to contribute their value to the best of their ability. This approach I believe will also rewards that kind of merit and demonstration much more as voters show their appreciation and ongoing support. Perhaps a better resolve than endless haggling and disagreement.

Thanks for your time, do add your feedback and thoughts. If you’re interested in how this system can further integrate into other more ambitious ideas, feel free to check out my previous post here

12 Likes

I really like this idea. Your presentation seems very polished. has this model been implemented elsewhere? Though to be fair, that wouldn’t stop my ‘yes’ vote for something like this, but i’d love to see an example of successful implementation if one were available.
I see the potential of a large number of WGs in action at the same time, each with their own initiatives and budgets, and having a single dashboard to participate, track and perform oversight into the various WGs could be super beneficial. the level of granular control could incentivize more robust participation as well…say you voted for a pet project and it’s being worked on by a WG…well if you initiated that project, then you would have to keep going back to it to approve continued funding…this way you can’t just flex your vote and forget it, you would have to follow it, and continue funding it.
This is a very elegant solution.

I have a bit of interest in alternative methods of governance and this proposal aligns well with that.

I see a lot of two things…either we rubber stamp something and hope it works out, or we nitpick the shit out of something until it dies by committee. (Not in Jupiter, but in other DAOs i’ve participated in)

This proposal gives the approval for wide action over a larger time horizon, as well as maintaining oversight along the way.

If i were to offer any critical feedback at all it would be to your presentation. it is elegant and well formatted, but very dense and kinda technical. I understand that dense and technical is required sometimes, especially with complex topics like governance. Maybe throw out a solid TL;DR for those who might not engage with such a technical topic out of ‘Fear of Stats’. For real, i almost closed you out wen i got to the math…EEEEEEEEEEEEEEEEEEEEEEEEEE!

No thank you lol

I would have missed out though…so ya, a good TLDR

1 Like

Hey thanks for your feedback. To answer your questions here – yes and no. The voting method itself (Gauges) is used in Curve.Finance, and the previous project I worked for also implemented Gauges. Difference being – I haven’t seen it used for this kind of application before; funding workgroups.

Curve Finance uses Gauge voting to determine how much token emissions the DAO wishes to add as boosted Yield rewards for any given LP (Liquidity Pool). Projects first propose to be added to the Gauge vote, and then DAO members can disperse their voting power over whatever LP’s they want to vote for.

Example of Curve finance and the scalable use of Gauges with multiple vote options.

image

https://dao.curve.fi/gaugeweight

I’ve been working on many of these ideas before this project launched. I’ve tried other approaches and systems before; dework, coordinape, leaderboard systems ect, and these tested with multiple working groups. Its a good balance this way with gauges – has more positively aligned incentives, less conflicts between community, and eliminates critical vulnerabilities that will otherwise be exploited.

I have considered making things more concise, but then you have others that will ask you to expand and be more thorough haha :smiley: As long as its understandable, then those that will give it the time are more likely to give constructive feedback.

Thanks again for your feedback.

3 Likes

This is a lot clearer than the previous post. I heard you talk about this system on the CWG office hours as well. Very interesting concept! Nice graphic to help explain it also.

1 Like

Great post indeed. Hopefully we see something like this implemented in the near future.

1 Like