[Phase 1] HIP-52: Change POH Governance

HIP: 52
title: Change POH Governance
author: fnanni
status: Phase 1
created: 2022-07-05
conflicts with: None

Simple Summary

Turn governance into a board of DAOs with skin in the game. This HIP has 3 goals:

  1. get funding
  2. get important players in the Ethereum ecosystem more involved in the project
  3. make governance stronger

Abstract

Funding

Getting funds for the DAO has been difficult so far. The DAO currently holds 3.8M UBI and 46.48 WETH, which was sent during the initial UBI distribution and by Kleros in exchange for UBIs, respectively. It looks like Gitcoin grants have provided 72k USD at the time of writing. Although we will likely see more funds coming from gitcoin grants in the future, it is still a single, small source of funding that doesn’t directly increase adoption nor technical involvement in the project.

This HIP is intended to open a new channel for yearly funds, as each DAO member of the board will have to contribute 50k USD per year to POH. The hypothesis is that DAOs may be willing to join the board and contribute, given that they will participate in the governance to make POH successful according to their vision while their governance token will have an additional utility and could become more valuable.

Adoption

By including other DAOs in the POH governance and requiring funding, it’s expected that these DAO’s communities and dev teams will get more involved in the project and potentially build and promote ways of increasing adoption.

Governance

Although governance has been virtuous and good so far, it will likely weaken as POH grows. Sooner or later, a bigger democratic POH will give place to malicious or negligent, popular leaders who won’t have anything to lose by corrupting or weakening POH. This lack of skin in the game and alignment in incentives to make POH succeed is a threat to the DAO in the long term.

By diversifying governance decisions among multiple DAOs which have both strong interests in POH and skin in the game, the long term governance will have better chances of remaining solid. Moreover, I believe that it will get stronger as the board grows.

Motivation

Attract projects which have an interest in POH in order to get more funding and a stronger governance system with better incentives towards making POH succeed.

It seems that the community is currently focusing too much on UBI vs Kleros, but I believe we shouldn’t get into defensive and protectionist positions. Quite the opposite, we should try to cooperate and open the POH doors to the whole ecosystem.

Specification

Requirements for DAOs to join the board:

  • Get registered in a curated list that ensures that the DAO governance is decentralized, not a scam and aligned with POH.
  • Get the current board approval by simple majority vote.
  • Contribute 50k USD to the POH governor per year. If the DAO provides valuable resources through other channels, they can be discounted from the 50k USD. If this is intended, it should be specified before the board approval vote.
  • Make a one time contribution of 50k USD to UBI, either by buying and burning it, hodling it or sending it to the UBI governor.

Special considerations:

  • UBI DAO. The UBI project has had great importance in the initial growth and adoption of POH. It was the first dapp integrated to POH and currently there is a dev team working on UBI v2. As UBI depends on a solid sybil resistant human registry to succeed, its interests are aligned with those of POH. For these reasons, the UBI DAO will join the board automatically without any of the above mentioned requirements.
  • Kleros DAO. The Kleros cooperative and the DAO have also contributed tremendously to POH. Kleros has been working non stop for almost 3 years on the development of POH and POH v2. It has also provided technical support, paid for bots which subsidize submissions, provided funding to the POH DAO, incubated POH/UBI related projects, helped to submit HIPs to the governor, etc. Needless to say, PNK holders have an incentive to make POH a global success, as it would showcase the virtues of Kleros services. For these reasons, the Kleros DAO will join the board automatically without any of the above mentioned requirements.
  • POH DAO. The members of the POH DAO have shown huge interest in improving and promoting the system as can be seen in social media, governance forums, github contributions, the HIPs proposed and voted so far, etc. It seems natural that it should have a place on the board without having to contribute anything to itself and therefore it will join the board automatically without any of the above mentioned requirements.

Each DAO will have 1 vote on the board. If the board has an even number of DAOs, then the POH DAO’s vote will count double.

All decisions will be decided by simple majority except for manual additions and removals to the registry, which should be decided by unanimous vote.

Implementation

(To be further defined for Phase 3)

  1. Change the snapshot strategy according to this HIP.
  2. Create a list in Curate to whitelist DAOs candidates to the board and define the policy of the list.
9 Likes

A pesar de que el financiamiento es una cuestión relevante, esta propuesta parece que pretende transformar la única DAO democrática en otra plutocracia más.
En principio estoy en desacuerdo.

Although financing is a relevant issue, this proposal seems to be trying to transform the only democratic DAO into yet another plutocracy.
In principle I disagree.

1 Like

I agree with you that being the only democratic DAO is awesome and something we should be proud about. However, I disagree that being a democratic DAO is the goal of the DAO itself. In my opinion, the goal of the DAO is to be the biggest, most secure and most widely used decentralized identity protocol. I’d like to challenge the idea that keeping the current governance model will help us achieve this goal.

4 Likes

el registro es legĂ­timo porque el desarrollo es elegido por sus participantes.
Si esto cambia ya no sera atractivo para mi, y creo que para otros tampoco.

the registry is legitimate because the development is chosen by its participants.
If this changes it will no longer be attractive for me, and I think for others either.

1 Like

Esto pretende transformar una organización democrática en una Cámara de DAOs, lo rechazo fuertemente.

First, I would first wait to what HIP 49 has to say about Kleros involvement in Proof of Humanity before putting them into a board.
Second, this basically kills the 1p1v that made Proof of Humanity proposals, unique.

2 Likes

Did you read Aleix’s mind? Wtf. We discussed this and he reached the same conclusion.
My conclusion was “1p1v with no skin in the game breaks PoH”
His conclusion was “DAOs are the interested parties so 1 DAO 1 vote”

3 Likes

Version en español abajo


Just like I am interested in HIP-49, this proposal also gives me great hope.
I’m in favor of seeing how this HIP rolls out, just as HIP-49.
I wouldn’t want ONE to pass before the other, but comparing both and deciding on the best solution for POH.

“Skin in the game” is a very important factor as Fede mentions, and I believe the current HIP-49 is based on political pasionate grounds, but still lacks technical and economical perspectives, wqhich are which impact mainly on how blockchain and decenrtralized products (DAOs) work.

Deffinitelly interested on backing this proposal up to see how it evolves.

–

Al igual que me interesa el HIP-49, esta propuesta también me da muchas esperanzas.
Estoy a favor de ver cĂłmo se desarrolla este HIP, al igual que el HIP-49.
No me gustarĂ­a que se aprobara UNO antes que el otro, sino que se compararan ambos y se decidiera la mejor soluciĂłn para POH.

La alineación de intereses (“skin in the game”/“carne en el asador”) es un factor muy importante como menciona Fede y, en mi opinion, el actual HIP-49 se basa en motivos políticos pasionales (y comprensibles), pero todavía carece de perspectivas técnicas y económicas, que son las que impactan principalmente en el funcionamiento de la blockchain y los productos descentralizados (DAOs).

Estoy muy interesado en apoyar esta propuesta para ver cĂłmo evoluciona.

7 Likes

One interesting switch on the idea is doing mixed governance. The following parties have the following weights:

50% Humanity (1p1v, as before)
50% DAOs

Extra concerns: why give all DAOs 1 vote? aren’t some DAOs more important than others?
A way could be to give more weight to DAOs depending on their importance. Or even sell a PoH governance token that DAOs can use? (but, this creates new issues)

But, I gotta say, giving one DAO 1 vote is an interesting concept. Just be wary because it could cause irreparable damage, make sure to study the edge cases.

Another way is, just give the DAOs some hardcoded weight values. (Examples, dont take them at face value). Kleros 15%, Yubiai 5%, DemocracyEarth 10%…

3 Likes

I won’t support a proposal that goes against the democratic decision making process that makes our DAO unique. In that sense I find it very incompatible with what with stand for. That said, I think it’s good to start thinking about mechanisms that can align our DAO to other DAOs.

For instance, building liquidity pools with UBI and tokens of other DAOs could be quite possible and we do have a budget of UBI to offer.

But I simply don’t feel comfortable breaking the young democracy we have created.

5 Likes

It would effectively be a bicameral model. This has actually been discussed before when we debated the split of the UBI DAO. The reason to make each DAO represented by one vote I think would help create a perception of PoH as a federation of DAOs. That in itself sounds interesting.

If we don’t lose the 1p1v component and this helps onboard resources from other DAOs, the debate is definitely worth it.

1 Like

We could make it a requirement that any DAO that wants to JOIN, they must implement any improvement proposals that would impact the proof of humanity DAO voting, to use a 1h1v mechanism.

Eg: If Kleros DAO votes, their voting should be the result of their DAO using 1h1v, same for all daos.

POH already does this, UBI too, but includes the voting power of quadratic. Both are good examples of what could be required for DAOs to participate on the governance.

It would still be 1 DAO 1 vote, but we would be certain that those votes were democratically decided by humans

1 Like

DAO networks and alliances

A board of aligned DAOs is interesting, it is an emerging governance pattern used by some successful DAOs. It encourages network effects among them, creating a network of DAOs structured like economies.

DAO alliances are an important piece of building the DAO economy. These alliances are closer to nation state alliances than corporate M&A.

A significant DAO-2-DAO token swap is like the NATO agreement, which partly serves to protect each other and not step on each others’ toes.
- Shreyas, Llama Community founder

Mission, objectives, priorities

It is easy to get distracted by the agitators of the moment with too much free time on their hands and no skin in the game while the ones with skin in the game are busy building and executing. The PoH DAO would benefit from setting explicit objectives for itself to keep the community focused on the PoH mission, especially if there are other DAOs involved. These objectives could be set typically by quarter.

The DAO will need to identify and rank the immediate priorities for PoH:

  • Decentralization?
  • Inclusiveness (maximally supporting every minorities as a top priority)?,
  • Composability/interoperability (many integrations with other protocols as an identity protocol, cross-chain) ?,
  • Sybil-resistance hardening (bounties for getting duplicates registered? cf. this MolochDAO Grant Proposal from last November).
  • else?
4 Likes

To me PoH’s mission is to provide the best sybil-resistant identity solution as a primitive for other DAO’s to use in a way that increases fairness of their own protocol or community.

To achieve this mission, the DAO does not have to be 1p1v maximalist. There is no practical reason for it apart from idealogy. Vitalik himself has said that he does not believe that direct 1p1v is a good way to make governance decisions for a DAO (loosely paraphrasing).

6 Likes

Two possible consequences if this HIP passes:

  1. It would quickly make everyone loose interested if the voters are not playing in a leveled field against larger interests.
  2. It would de facto make the DAO a mercenary to some other DAOs. Selling the DAO to the highest bidder is not the way to mature a democracy.
2 Likes

Add DAOs to your governance in exchange for funds? when a HIP is being discussed about being more descentralized? (sorry meant “… being more autonomous”)

Maybe it is not the right time to get this going.

We should look for ways to open the doors to the ecosystem but not the doors of its own governance.

PoH governed by PoH.

6 Likes

I think we can think of mechanisms that the DAOs MUST implement in order to be part of the governance.

Large DAOs would still have 1 vote, no matter their size, or maybe I’m not understanding the statement.

2 Likes

Thanks everyone for joining the conversation.

What development? Which participants? What could happen with democratic consensus and development when POH reaches 1M humans? As an external project (e.g. UBI), I’d trust POH if sybil resistance and adoption look good now and moving forward, and that has nothing to do with governance itself. Note that you can use a successful POH to build as many democracies as you want.

  1. I think it makes sense to prioritize this HIP. HIP 49 would go through if UBI DAO and POH DAO vote in favor of it. I think it’s actually better, because both DAOs can expressed themselves independently. Kleros, if member of the board, might be more willing to keep contributing and participating, as they are planning to use human courts in v2 and third party projects using POH and UBI might still use Kleros services (like Yubiai using the Kleros escrow). If not, maybe the UBI DAO and POH DAO can vote to remove Kleros from the board?
  2. Saying that it is “unique” is not an argument against nor in favor of this, it’s just a romantic statement, isn’t it? The important question is whether 1p1v governance will be safe and sustainable in the long term or not. I’m pessimistic about it.

Note that HIP49 and HIP52 are compatible.

I don’t know how we could quantify importance.

Something that I thought about when I wrote the proposal, is normalizing votes of each DAO instead of the less expressive binary vote. I’m not sure which is better so I chose the simplest model.

I absolutely agree. We should also be aware that irreparable damage can also happen in full 1p1v governance. Perfection does not exist.

Do you think this is important for every single DAO decision? This HIP could fragment governance if it makes sense. For example, let the board of DAOs handle de governor assets but changes in the policy or social media decisions (telegram groups for example) must be decided with 1p1v (just thinking out loud).

Mercenary is an unfortunate word to use in this context. It’s like saying that democracy is the equivalent to selling the DAO to the most charismatic politicians. Making sure that you are building something valuable for as many players in the ecosystem as possible looks like something very healthy to me.

Not only funds. We should make sure that they have genuine interest in POH and are committed to its success (that’s the curate + board approval for). This is not a HIP about less decentralization.

6 Likes

(English version below)
La governanza de la DAO de PoH en manos de los protocolos que “usan el servicio” de 1wallet 1humano?
Me suena muy raro.

Comprendo que dichos protocolos pueden estar interesados en mejorar la calidad del registro, y que serĂ­a interesante e inteligente alinear los incentivos. Pero no creo que sea el modo correcto, para nada.
Sin embargo me parece una idea interesante de debatir, para ver que nuevos conceptos aparecen tras el debate.

Estoy en contra de esta HIP, pero me interesa seguir debatiendo estos conceptos. Sobre todo, buscar formas de involucrar otras comunidades en la mejora del registro. Pero no dándoles la governanza de este protocolo.

-------- (automatic translation) -----------
PoH DAO governance in the hands of protocols that “use the service” of 1wallet 1human?
It sounds very strange to me.

I understand that such protocols may be interested in improving the quality of the registry, and that it would be interesting and intelligent to align the incentives. But I don’t think it’s the right way at all.
However, it seems to me an interesting idea to debate, to see what new concepts appear after the debate.
PoH DAO governance in the hands of protocols that “use the service” of 1wallet 1human?
It sounds very strange to me.

I understand that such protocols may be interested in improving the quality of the registry, and that it would be interesting and intelligent to align the incentives. But I don’t think it’s the right way at all.

I am against this HIP, but I am interested in further discussion of these concepts. Mainly look for ways to involve other communities in improving the registry. But not giving them the governance of this protocol.

8 Likes

I think that this proposal is interesting and points out to a particular issue, only one group of stakeholders is represented.

  • End user (people registering) get all the votes.
  • Team members and developers are not represented.
  • People building applications on top are not represented.

Here we could get inspiration of the Kleros Cooperative where founders, workers, intermediate users (people building applications on top) and end users are represented.

We could have a system where different college could be given a different share of the vote. I would still give most of it to end users, but we could do something like:

  • End users (registered people): 50%
  • Intermediate users (people building on top): 25%
  • Team members (people working on the project): 25%

We could still have a 1 person = 1 vote DAO used for other purposes.

9 Likes