[WIP] Road to Decentralization

Projects such as Compound, Synthetix, and the recently launched YFI have shown us different approaches to pass the control of the protocol to the community and we learn a lot from their experience.

Today, with this piece, we would like to shed some light on our plan to decentralize Perpetual Protocol. But please keep in mind that nothing is set in stone yet at this moment and we welcome any feedback from the community.

Near-term (~3 Months After Mainnet)

For Improvement Proposals

This forum will be the main place to propose and discuss the pros and cons of new ideas in the foreseeable future.

For Governance

Due to the nascency of the protocol and the importance of iterating fast in the early days, team members of the Perpetual Protocol will make most of the decisions in this timeframe until we have an on-chain governance portal ready for all the PERP holders. That being said, we’ll take the community’s feedback into consideration before making any decision, and we’ll share our rationale behind a decision in this forum as well.

For Software Development

Currently, we do not have a technical documentation for external developers to reference and implement the proposed ideas themselves. As such, in this and next stage, the PP team will be the main developers to modify/add functionality to PP’s smart contract in accordance with the passed improvement proposals and deploy the modified code to the Ethereum mainnet.

Mid-term (~6 Months After Mainnet)

Here is a list of things we should have in place at this stage:

  • An improved and comprehensive technical documentation that allows builders to tinker with our system and build something useful on top of the protocol themselves
  • A well-running developer grant, bug bounty, and smart contract-based referral program established
  • An on-chain governance portal for stakers to vote on proposals and propose new proposals with their staked PERPs
  • Allow stakers to delegate their voting right to other people

The proposal that stakers vote on in this stage will be at a higher level as opposed to executable code. The major implementation and the deployment of the smart contracts will still be done by the Perpetual Protocol team.

Long-term (~9 Months After Mainnet)

Here is a list of things either the community or we should have built at this point:

  • A compensation guideline to incentivize tech-savvy community members to turn the high-level ideas on the forum into executable code
  • A reward program set up to encourage people to 1) deploy the smart contract after the proposal is passed, 2) run keeper bot to provide better user experience for the traders, and 3) run a mirror governance portal themselves

The proposal that stakers vote on in this phase will be executable code only (similar to Compound’s current governance model) and the actual implementation and the deployment of the smart contracts can be done by literally anyone – even the ones without holding any PERP tokens.


Any feedback on the plan?
Any tools that you suggest we should use to reduce the reliance on the 3rd party?

Leave your comment below and let’s discuss!

3 Likes

road to decentralization is a long way to go… keep up the good work!

1 Like

What about rewarding those who spend significant time on the governance side of things? A lot of DeFi and other projects are keen on rewarding the “hard side” of the universe (lines of code) but less cool about the “soft side” (governance). When this happens, you “get” what you “pay for” - consider aligning your reward structures to promote all of the behaviors you are interested in fostering.

Regardless, best of luck!
-Ivan
P.S. If interested: Check out my Medium posts on DAO culture where I talk about the above a bit deeper:

  1. The Human Side of DAOs
  2. DAO’s: If You Build it, They Will Come, But Will They Stay?

Totally Agreed, but I think it’s hard to quantify the soft-side though.
Do you have any recommendations on how to get started?
BTW, Synthetix has a tipping system in their discord but I don’t have a strong opinion on that.

The medium posts are great. Give me some time to digest them.

I think it’s hard to quantify the hard side too! Quality of code vs quantity etc. (but let’s not rathole)

To get started - define what you expect in the “soft side” (I’m happy to help you [whoever “you” is] get to an answer) governance portion and estimate what a "best"contribution amount would be. Then determine a fair rate, and set aside that amount for governance rewards. We can figure out a specific distribution method next.

Happy to help, and reach out with any questions (ivanthinking@gmail.com),

-Ivan