[Proposal] Governance Process Revamp

Background

As Perpetual Protocol matures, our governance process has become more and more important and we need a clearer process for managing protocol governance.

This proposal is the governance process along with general guidelines and a checklist for a vote.

Purpose

The ultimate goal of Defi is to create a new financial system that is owned and controlled by users, from the bottom up. In order to achieve the vision of a user-owned, inclusive, transparent and provably fair financial system, a system of governance is required to allow users to take ownership of the system components.

Like Defi itself, this governance process is in active development. Wherever possible, Perpetual Protocol seeks to turn ownership of decision-making over to the user community. This is an ongoing process, and we welcome any community effort to advance or improve governance of the protocol!

Governance Process

  1. Post the proposal

    • The proposer needs to post the proposal on gov forum (https://gov.perp.fi/)
    • Relevant implementation details must be provided in the proposal, such as parameters change, what chain to use, appropriate timeline, etc.
  2. Temperature check

    • Once the post is published, submitter with more than 4000 PERP voting power can start the temp check vote anytime
    • Votes are held in the Temp Check snapshot space
    • Voting format: Yes / No
    • Voting period: 3 days
    • Temperature check quorum is 200k voting power (any combination of PERP and vePERP)
  3. Discussion period

    • Discussion period: 7 days
    • Optionally start a discussion in a Discord thread, community call, or Twitter space with meeting notes in order to collect feedback
    • The core team will confirm the technical feasibility and participate in the period
  4. Official vote

    • Requirements:
      • The core team needs to confirm the technical feasibility of the proposal before the vote
    • Criteria and process:
      • Voting period: 7 days
      • Vote must achieve a quorum of 10% of all voting power to pass
    • Voting rules:
      • Voting power is calculated according to the state at the snapshot block
      • Voting power is the sum of PERP and vePERP (see details below)
      • After launch, a vote cannot be halted except when the vote content unintentionally differs from the proposal content, e.g. major typos, omitted sections.
  5. Implementation
    Currently the foundation team will be coordinating the implementation, if any technical issues are encountered, the proposal may require modification or revision.

General Guidelines

  1. About the quorum
    All governance will be handled by PERP and vePERP holders. In line with industry standards, we propose the following methodology:

    (1) Calculate the total amount of voting power at the snapshot block (Ethereum Mainnet), which is the sum of circulating PERP and vePERP
    (2) For the official vote, there’s a minimum quorum requirement of 10% of the total voting power calculated in (1)
    (3) The relevant quorum information will be posted under the proposal

    For an explicit example: If there is 1M circulating PERP and 9M vePERP, then the quorum of 10% is 1M votes required. These votes can be in any combination of PERP and vePERP.

  2. Conflicting or interrelated proposals
    If proposals are made simultaneously that contain overlapping, interrelated or conflicting actions, effects or goals, they will be voted upon in the sequence the proposals were posted to the governance forum, and earlier votes must complete before later votes can begin. If an earlier proposal is blocking a later proposal due to feasibility issues or is abandoned by the proposer, it can be superseded by a later vote.

  3. Re-launch of proposals
    Following industry standards, all proposals will be treated as new and must complete the launch process again.

Checklist for an official vote

The following is the checklist for a launch of an official vote. The core team will be in charge of coordinating the steps with the proposers.

  1. Make sure the proposal content has been reviewed by the core team and confirm it’s technically feasible

  2. Make sure it’s been 7 days in gov forum and includes active discussion

  3. Make sure it passes the temp check

  4. Request proposer to post vote info to the forum

    • Title
    • Description
    • Vote options
    • Proposer address (for whitelist)
  5. Launch vote

    • Add proposer address to whitelist
    • Request proposer to launch vote, provide instructions / coordinate via Discord ticket if needed
    • Remove proposer address from whitelist
  6. Get quorum info

    • Get snapshot block
    • Get timestamp of snapshot block
    • Get voting power with script according to timestamp
    • Update quorum in Snapshot
    • Paste snapshot data from script to the forum under the proposal
  7. Announce the new vote in Discord #community-news

Pilot governance vote

In order to test the process and make sure it runs smoothly, we will launch one vote (Perpvangelist Funding Proposal) using the process described here. Next, we will hold a vote to ratify this voting method to be used in all future votes.

2 Likes

This is not true. The goal of DeFi according to who? This is like saying “the goal of Bitcoin is…”. It is just your opinion/speculation, and I happen to disagree.

In fact I think PERP so far is evidence for why this concept doesn’t work well, and won’t be the model for the most successful DeFi protocols going forward.

Hi and thanks for the comment! It’s an interesting perspective because most defi and crypto people I know do have this view, and having a different perspective is important.

A key challenge in “decentralized finance” aka defi, is how do you decentralize the development, operation and management of a financial product or service? I am not familiar with a lot of defi projects, and the ones I do have some familiarity with, seem to follow the model of letting users decide major issues.

I’d love to hear more about your thoughts on governance and how this key challenge stated above can be addressed!

1 Like

You can have decentralization of user funds without giving user’s control of major issues. There are a lot of variants of decentralization.

It’s not uncommon for “the people” to disagree with a team’s decision and then later agree with it when they see the outcome. For example the outrage at the new Instagram logo initially. Or the initial mocking at launch of Apple’s Air Pods, despite them being a very popular product today.

Liquity’s LUSD is a non-upgradeable contract with no governance. If they want to change something, they deploy a new contract and users must choose to migrate to it. There is no DAO.

You may have heard of the crypto projects Ethereum and Bitcoin. They have no DAO.

Curve defines parameters that can be voted on in their DAO, and user’s vote on those. The team can’t change non-upgradeable smart contracts.

In the case of Perp, the team has massive control over everything, while user’s are given votes that the team chooses to obey but isn’t forced to. This has not much to do with DeFi, you can do that model without a decentralized ledger if you wish, although I suppose it’s convenient to make the voting more transparent.

Users can vote and have power. But a successful project needs exceptional people with above average capabilities to be daring and lead the charge.

If you make every decision a vote of the people, then you just get average results and fail compared to the well lead projects.

Vote is live!

https://snapshot.org/#/vote-perp.eth/proposal/0x0538375f38350d4ad07f21cd7aadc0add66587622d9bade66cf7c7ac6b697e73

Quorum (Circulating Voting Power * 0.1)

Query timestamp:
- Mon, 31 Oct 2022 11:17:23 GMT
- UTC timestamp: 1667215043000
- Mainnet block number: 15867689
- Mainnet timestamp: 1667215043
- Mainnet UTC: Mon, 31 Oct 2022 11:17:23 GMT
- Optimism block number: 33081887
- Optimism timestamp: 1667215045
- Optimism UTC: Mon, 31 Oct 2022 11:17:25 GMT
- Circulating Supply: 85,108,686.962
- Circulating Voting Power: 104,418,930.241```