https://gov.optimism.io/t/looking-ahead-long-term-onchain-governance-architecture/9014?u=dansingjoy
We’re thrilled to share some updates and our vision for the future of onchain governance within our ecosystem. As many of you know, Agora has been instrumental in moving the governance fund onchain, and their upcoming proposal [link when available] marks a significant milestone for us. This move not only aligns with our commitment to transparency and decentralization but also opens up a conversation about the future of onchain governance within our ecosystem.
As we navigate this transition, we’re looking ahead at the longer-term future of onchain governance and how it can evolve to better serve our community. Currently, the Operating Manual serves as a robust framework guiding our governance processes. Translating its full functionality onchain presents challenges and opportunities that we believe are crucial to address in the open.
Proposal Permissioning: Balancing Innovation with Prudence
As we move the Governance Fund onchain, an important next step to consider is proposal permissioning.
Industry Standard vs. Current Model
The industry standard for onchain governance involves minimal barriers to proposal submissions, relying on token-based thresholds to filter proposals.
Our current model, which requires delegate approvals and adheres to voting cycles, offers a more granular system that we believe is crucial for maintaining the quality and relevance of proposals. However, this is enforced at the social layer by the Optimism Foundation—meaning only the OF is authorized to propose onchain, and offchain proposers must trust the OF to post their votes onchain:
Why a Direct Move to Permissionless Could be Problematic
Most DAOs use a token-based threshold requirement for permissionless proposal submission to prevent spam or malicious proposals from entering the voting process. A low barrier to entry can lead to an overwhelming number of proposals, many of which may lack substance or relevance to the community’s goals. This not only clutters the governance process but also dilutes the attention and resources that could be directed towards more impactful proposals. The main issue with using minimum token-based thresholds as a filtering mechanism is that it reduces participation relative to our current system (which allows the top 100 delegates to provide approvals) and creates plutocratically-gated proposal rights, which is antithetical to the principles outlined in our Working Constitution.
Additionally, the industry’s standard proposal structures don’t allow for logic encoded in our Operating Manual, which protects against common attack vectors including vote buying or borrowing, bribery, non-standard voting periods that can take advantage of voter apathy or advantageous ordering, malicious proposals, etc.
While these concerns could be partially mitigated by increasing the token-based thresholds required to propose, this presents a fundamental, plutocratic-favoring tradeoff—the higher the threshold, the less participatory governance can be, and the more “agenda-setting powers” are concentrated into the hands of large token holders. This means that proposal thresholds are an active subject of contention in many other communities, and go against the principle of anti-plutocracy outlined in the Working Constitution of the Optimism Collective.
Our Vision: A More Granular Approach
As we consider the future of onchain governance, we believe that we should strive for a system which mirrors the sophistication and nuance of our Operating Manual. This means creating an onchain governance model that allows for different types of proposals, and for rules and requirements which can be dependent on the specifics of the proposals in question.
As an illustrative example, imagine the following:
We believe that such a system would not only preserve the integrity of our governance process but also set a new standard for DAOs and onchain communities.
Next Steps: Bridging the Gap
To achieve this vision, we believe that initial focus should be on replicating the full functionality of the Operating Manual onchain, with a focus on Gov Fund proposals first. This work includes:
- Delegate Approvals: Implementing the ability to gate proposals on multiple delegate approvals, as currently specified in the Operating Manual, with thresholds not reliant on token-based balances.
- Voting Cycles: By requiring that proposals are only submitted within [1] day of voting cycles, we can preserve the current cadence of voting cycles specified in the Operating Manual.
- Type-aware Permissioning: By implementing these rules with an awareness of proposal types, we can incrementally bring permissionless proposals online for additional proposal types.
Short-term Open Questions
While the above work is straightforward enough, some questions do remain which we’d like to open up for community discussion:
- Ossification of Voting Cycles: In the past, we have changed voting cycles’ and seasons’ dates. Moving this onchain opens the question of how to proceed: either we permanently set voting cycles, or introduce a permissioned role which can change them. We propose that, to start, since the Optimism Foundation will retain a veto right over Gov Fund allocations that the Optimism Foundation can just hold this role to start.
- Additional Size-based Safeguards: One open design question is: are there benefits to implementing more stringent requirements for proposal submissions, such as requiring more delegate approvals for proposals allocating higher amounts of OP? This would be a divergence from the Operating Manual today, but could be appropriate given the transition to permissionlessness.
- Proposal Edits: How can we accommodate changes to proposals during the review period without compromising the voting process? Is it sufficient to allow arbitrary edits, but have any edits to reset delegate approvals?
Future Work: Expanding Our Governance Toolkit
Looking ahead, we’re excited about the possibilities of further enhancing our onchain governance architecture, which extends beyond proposal permissioning. We wanted to share what we see as some of the big architectural challenges in the long-term:
- Onchain Citizens’ House Voting: Integrating Citizens’ House voting directly into our onchain processes, allowing for bringing multi-house decisions fully onchain. While there is some bare-bones work which needs to be done no matter what, we believe that further testing and refinement of the Citizens’ House Veto mechanism is required before we can finalize this architecture.
- Onchain Citizenship Selection: Allowing for onchain governance to expand the Citizen set over time presents an extremely large design space, with less prior industry work to draw from than token voting systems. Because of how complex this design space is, more experimentation and clarity is needed before any productionization could begin.
- Emergency Off-cycle Votes: We think the community should consider developing mechanisms for addressing urgent matters outside of the regular voting cycles.
- Delegation Programs: Moving delegation programs like the Protocol Delegation Program and Chain Delegation Program to onchain mechanisms presents an opportunity to provide stronger guarantees to stakeholders.
In conclusion, the move to onchain Gov Fund execution represents a significant milestone for us, but it’s just the beginning. We’re committed to building a governance model that is not only robust and transparent but also flexible and inclusive. We look forward to engaging with the community as we embark on this exciting journey together.