ECP-2A: Formalizing and Funding the Governance Council Workstream

Authors

• LPX, Evmos DAO Governance Council
• GV, Evmos DAO Governance Council
• Benny Lava, Evmos DAO Governance Council

Summary

Operating under the community-ratified Interim Constituion of Evmos DAO (Proposal #51), the Governance Workstream has been serving the Evmos DAO and Community without funding for the past six months. We are officially requesting formalization by funding.

Workstream Introduction

Decentralized governance is a double-edged sword with constant challenges to overcome and is often burdened with inefficient processes. It is also the beauty and soul of a DAO, with the ethos of decentralization and equality at the very core. The Governance Council exists and operates as a neutral party with allegiances only to the Evmos network and the guiding values of the Evmos Constitution. While the workstream is tasked with various duties, our mandate is simple: to facilitate and protect the integrity of Evmos’ governance processes and, to the best of our ability, create a fair and transparent environment in which the network and the community can prosper and thrive.

Mission: Protect, improve, and serve the Evmos network and community with neutrality and transparency.

Vision: To see Evmos DAO evolve into a fully decentralized and self-sustainable organization that is capable of propelling the growth of the network.

Values: Progressive Decentralization, Continuous Improvement, Hybrid-Governance

Primary Duties (Ongoing & Planned)

A. Governance Framework Improvement & Implementation

The Evmos Governance Framework serves to empower each member of the community by providing clear and standardized methods of interacting with the wider DAO, thereby defining its future shape and trajectory. It is crucial that we strive to continuously improve our processes, we intend to facilitate that by adhering to the following.

• The Constitution must be completed and amended as committed in Proposal 51, which ratified the Interim Constitution of Evmos DAO.
• Governance proposals that have been passed by the community must be implemented and enforced, as long as they adhere to the Guiding Principles of our Constitution.
• We must be diligent in listening to the community’s feedback on governance pain-points, shortcomings, and inefficiencies.
• We must strive to fix or improve inefficiencies and shortcomings when a viable plan is ideated or presented.
• We must continue our research and observations into other DAOs and remain up to date with evolving DAO philosophies, tools, and scientific research.

B. Continuous Efforts in Increasing Governance Participation & Engagement

The strength of our governance relates directly to the participation levels in both on-chain and off-chain governance. Decisions and proposals can only be as well-rounded and well-defined as the number of participants that played a role in contributing to the ideation and feedback process. Similarly, a decision or proposal is only as credible as the consensus surrounding it.

• The Governance Council will continue to promote and increase engagement by stakeholders in all aspects of the governance processes.
• The Governance Council will work to improve and provide access to the resources necessary to participate in the governance process — for all members of the community.
• The Governance Council should be in constant engagement with the community, in as many mediums as possible.

C. Facilitating Communications and the Flow of Information

Effective communication is a crucial strategy that must be used by the Governance Workstream. Transparent and effective governance requires an effective, reliable, and unbiased communications strategy. Without communication and information flow, it is extremely difficult to facilitate an effective and efficient governance.

• The Governance Council will work to improve and create easier access to the resources necessary to understand and stay up-to-date in our governance — for all members of the community.
• The Governance Council must establish a more consistent, high-quality information feed of all issues and proposals for the community at large to digest.
• The Governance Council, when requested by the community, will act as a liaison to the Evmos Foundation and attempt to seek information and clarity into concerns or issues brought up.
• The Governance Council will remain in constant communication with the Foundation to ensure the alignment of the goals of the DAO, the community, and the core members.
• The Governance Council will work with the Community Moderation & Support team in the ideation of better communication initiatives, as well as pinpointing areas that are in need of improvements or clarifications.
• The Governance Council will host community meetings, project introductions, and public forums when requested.
• The Governance Council will continue to attend, participate in, and — if requested — take on the responsibility of hosting the weekly Governance meetings on Discord

D. Governance and Proposal Assistance and Feedback

• The Governance Workstream will continue to provide assistance to individuals, teams, and projects that are seeking to submit a proposal. This includes all phases, from pre-Commonwealth ideation to the final on-chain submission, assuming that all procedures are being followed properly and in good faith. Our assistance in drafting proposals should not be seen as an endorsement or guarantee.
• The Governance Workstream will always strive to voice all thoughts on an issue or proposal from a neutral, rational point of view.
• The Governance Council will continue to work on improving governance documentation and begin building tools and resources for a more effective, transparent, and user-friendly governance.

E. Onboarding of New Workstreams and sub-DAOs

The Governance Council will assist in the creation of new workstreams. When focusing on accelerating the progress of the DAO, the goal is to grow horizontally via more sub-DAOs (vs. growing vertically). Through more sub-DAOs, the entire org can increase the number of teams trying new approaches to solving and innovating on existing problems and focuses while maintaining the same level of meta-organizational admin/overhead required to run. Our general stance on workstream or funding proposals will be:

• Support funding proposals that presents a decent chance of driving forward KPIs
• Explore funding proposals that may have a chance of bringing value and test the waters
• Support the allocation of more resources to sub-DAOs that are producing results and are looking to expand
• Investigate and potentially look into de-funding teams or initiatives that are not producing any results

F. Protocol & Cross-Chain Collaboration

• The Governance Council will continue to engage with and act as a community liaison with protocols and projects seeking to build or collaborate with Evmos.
• The Governance Council will continue to engage in outreach to projects and protocols for potential collaborative initiatives that could be beneficial to the overall Evmos ecosystem.

G. Evmos DAO’s Treasury Management, Diversification, & Growth

Phase 1

• The Governance Council will deploy a Gnosis Safe multi-sig contract to be used as Evmos DAO’s Liquid Treasury.
• This contract will act as the DAO’s liquid treasury for various purposes, including contributor and bounty rewards, liquidity and incentive programs, asset diversification, and minor expenses that do not warrant its own proposal.
• The Governance Council will make two treasury funding requests. The initial request will fund the development of the projects detailed in ECP-3.

Phase 2

• ECP-3 will be formally proposed when the projects detailed are close to completion, and receives the approval of the Evmos Community.

Projects and Initiatives (Ongoing & Planned)

A. Liquidity Incentives Programs 2.0 (In Progress)

Although we have begun the “manual” Liquidity Incentives Program with our recent “Kickstart Evmos DeFi” proposal, our goal is to ultimately have this process determined by the community on a merit or milestone-based system.

In order to achieve this in a truly transparent and permissionless way, an Off-Chain Governance Framework is required.

(More info in ECP-3)

B. Off-Chain Community Governance (In Progress)

Off-chain governance is often required for decisions in which the ultimate result is unknown and cannot be derived from on-chain data, thus requiring some human input. These decisions should be made with the mission, vision and goals of the DAO in mind.

DAOs work best when the governance burden related to curation, security, and risk can be reduced faster than the natural increase in coordination costs that accompanies the need to have members involved in voting on every decision made. - Tarun Chitra

Optimizing for the right people to participate in governance processes is an ever-evolving discussion in governance circles today. It may not be pragmatic to assume that all voters should participate in every governance decision. Participating in governance is a lot of work—reading and digesting a proposal, providing feedback for discussion and going to vote can be mentally fatiguing. In addition, many do not have the subject matter expertise or desire to participate in proposals outside of their domain.

Off-Chain governance, in the context of Evmos DAO and the Cosmos ecosystem, in simplified terms, can be explained as governance decisions that do not need to commence a network-wide vote through the utilization of the Cosmos SDKs `gov` module.

Off-Chain governance, in the context of Decentralized Governance and DAOs in the Ethereum ecosystem, can be explained as all governance decisions that utilize decentralized data and DID protocols like Ceramic and IPFS to allow for gas-free voting, encouraging the participation of more token holders.

DAO operations will likely be governed by contracts and tooling that are battle-tested and available on the EVM side of the chain. This opens up a new realm of possibilities for governance, trustless contracts, incentive alignment, and community collaboration.

While this is a particularly complex and interesting topic, we do not want to dwell in contemplation more than needed nor do we want to be married to one idea or framework. Our off-chain governance styling, processes, and direction will likely evolve over time, as is common with all DAOs, new and old. (Reference: Gall’s Law)

High-priority items needed for off-chain governance are currently under research and in experimentation phases in some cases; these include:

• Different Voting Mechanisms
• The Alignment of Incentives
• Contracts, Protocols, and DAO Toolings
• Risk Reduction Efforts
• (More in ECP-3)

C. Perpetual Bounty Fund (In Progress)

The Perpetual Bounty Fund is a perpetual, self-replenishing bounty fund that is designed to minimize community spending while helping with network decentralization efforts.

The concept of a perpetual bounty fund is very straightforward and the establishment of the fund would only require a one-time spend request from the community pool.

1. The initial funds are delegated to a distributed set of validators that are in the mid-low ranking.
2. The authz module from Cosmos SDK is utilized to re-stake a minimum “maintenance” amount (to account for decreasing APY rates)
3. Utilizing authz, the remainder of the rewards are sent to a multisig wallet.
4. The daily rewards are then utilized to fund bounty programs for the community.

When compared to a normal community pool budget request, this model would A) take the initial funding amount out of the unbonded circulating supply; B) align with the community goals of striving towards more decentralization; C) provide a steady stream of a workable budget to be bountied out responsibly and methodically.

D. Governance Engagement Initiatives (In Research)

The Governance Council is constantly looking into ideas or tools that may help with participation rate pre-voting on chain.

We strongly believe that the best way to reduce failed proposals is to address all community concerns during the early stages of a proposal. Increased participation in these early stage proposals would greatly benefit Evmos governance, and is an initiative we are taking seriously.

Some projects we are strongly considering in this area are a much comprehensive governance dashboard, engagement tracking, and more.

E. Proposal Summary and Risk Assessment Reports (Planned)

The Governance Council is looking to provide proposal summaries, context, and our risk assessments for all proposals that go on chain.

Talks of potentially integrating these reports and other valuable metadata around a proposal into popular block explorers have been initiated and may be considered.

F. Deployment of Public Goods and Services (In Progress)

The Governance Council is currently looking into public goods and infrastructure that we believe is needed to:

• Attract more projects and organizations to migrate to Evmos
• Attract more developers to build on Evmos
• Allow more flexibility and functionality in what’s possible via governance
• Increase governance participation rate and the flow of information

Some projects that the Governance Council has initiated in this domain:

• Governance Issue Tracker
• Evmos RPC Proxy
• Evmos Datahub
• Webmos React Bootstrapping Kit
• Smart contracts for: token vesting, payment streaming, payment splits
• Dashboard for Vesting Contracts

G. Validator Fairness Initiative (In Progress)

• The VFI Group was created a few months back in an attempt to get consensus on a Code of Conduct for Validators.
• Although currently at a stalemate, there has been great discussions and is now over 100 members strong.
• We must reach a consensus, as the Interim Constitution was proposed on the premise that these difficult but pressing issues would not be forgotten.

Progress Report and Achievements

The Evmos DAO has been operating informally with Governance Initiatives since early June 2022, and was formally recognized by the Evmos Community when the Constitution was ratified on August 31st, 2022. While we realize that we have much work ahead of us, we humbly celebrate the achievements the workstream and DAO members have made thus far.

Evmos Community Proposals

The Governance Council and DAO Contributors have assisted in, provided support to, or played a direct role in the proposals listed below.

After posting the “Passing a Community Proposal, Best Practices” guide, the Governance Workstream and DAO contributors assisted in passing 24 out of 25 proposals for a success rate of 96%.

The Governance Council has been involved with 13 out of 15 passed Community Pool Spend Proposals (Excluding Proposal 66 - Recover IBC tokens from Airdrop). Which covers nearly 98% of the total community pool spend!

• Total Community Pool Spend: ~3.79mil EVMOS
• Total Community Pool Spend with Gov. Council Support: ~3.70mil EVMOS

We are currently assisting in the facilitation and/or drafting of various additional proposals ranging from protocol onboarding to incentives programs.

On-Chain Governance Participation

Evmos on-chain governance participation rate is currently the highest among the top Cosmos chains (as of data pulled Oct. 8th 2022) and is barely managing to maintain an upwards trend. With a participation rate of almost 90%, the Governance Workstream will most likely be fighting to maintain the status quo, as we are almost at the ceiling.

Off-Chain Governance Participation

In addition to all the proposals that have gone on-chain, the Evmos Community has seen a tremendous, sustained growth in off-chain governance participation, specifically on Commonwealth.

Workstream Members and Organizational Structure

Workstream Structure

• The Governance Workstream will function as a two-level hierarchy, consisting of
• This difference in accountability means that decision-making power must lie in the hands of the stewards rather than the contributors, and is the reason for this explicit hierarchy.
• Workstream leaders in their second term are automatically elected to a Governance Council Director role.
• In practice, it is expected that Council Contributors and Council Directors operate and communicate as equals. Stewards will seek to always consult Contributors when making decisions regarding the future of the Governance Workstream.

Governance Council Directors

Governance Contributors

We are looking for part-time or full-time contributors to fill the following positions that play a crucial role in assisting the Governance Council.

Removal and Replacement of Council Members

In accordance with our Interim Constitution, the Community may initiate an on-chain proposal for the removal and replacement of a Council Member.

Funding Request

A. Contributor Compensations

*Vesting amounts are calculated in USD but paid in EVMOS at each funding cycle’s market price.

*For this initial funding request, we will peg the price of EVMOS @0.50$

*Vesting Schedule: 4-year linear, 6 month cliff.

*Vesting contracts are revocable by the DAO. See ECP-1C.

Compensation Rationale

Base: $28/hr * 2.5 VL * 0.9 CL = $120,960/yr

Retroactive: 39,000 EVMOS for past 6 months of contributions

Initial Vesting: Salary * 0.45 CP * 2 AL = $108,864 / 4 years revocable

Base: $28/hr * 2.0 VL * 0.9 CL = $96,768/yr

Retroactive: 32,500 EVMOS for past 6 months of contributions

Initial Vesting: Salary * 0.45 CP * 2 AL = $87,091 / 4 years revocable

Base: $28/hr * 2.0 VL * 0.9 CL = $96,768/yr

Retroactive: 19,500 EVMOS for past 6 months of contributions

Initial Vesting: Salary * 0.45 CP * 2 AL = $87,091 / 4 years revocable

B. Research & Development Fund

As over 109 million tokens sit idly in the Community Pool, the DAO wishes to utilize a relatively small portion in its continued efforts to advance the Evmos ecosystem. As the main driving force in community-led growth of Evmos, we hope that the Community is able to see our vision in what is possible with a workable treasury.

ECP-3 (WIP) lays out our strategic and ambitious programs that will pave the path for a self-sustainable DAO with mechanisms designed to decentralize decision making, incentivize governance participation, and assist with network decentralization.

While most of the underlying research has been conducted, the implementation, development, auditing, and testing of the GOV ecosystem will require a considerable amount of resources.

Our goal is to roll out each program detailed in ECP-3 in a modular basis with the veGOV and Liquidity Incentives Gauge program as first priority (target launch date of mid-late Q1 2023). We have already initiated discussions with developers and DAOs with experience in the creation of similar DeFi programs, and we fully intend to collaborate with and compensate for the assistance received.

The R&D funding requests are rough estimates; unused funds will remain in the workstream treasury as reserves.

Itemized R&D Funding Request

C. Ecosystem Bootstrap and Onboarding Fund

The Ecosystem Bootstrap Fund will be the pre-cursor to the eventual Perpetual Bounty Fund detailed in ECP-3. While the core concept of a self-replenishing fund through delegation is the same, the Bootstrap Fund will have to be manually managed until the deGOV program and Delegation Gauges are ready to be deployed.

The Governance Council is requesting 975,000 for the strengthening of the Ecosystem Bootstrap Fund. 375K will be delegated on the network, which equates to roughly $27K / month at current prices that will be used for bounties and community initiatives. 600K will be kept in reserves for usage in micro-grants and liquidity bootstrapping assistance for new projects deploying on the Evmos network.

D. Treasury Diversification & Future Workstream Compensations

The Governance Council is requesting 1,560,000 to be allocated for treasury reserves and stablecoin diversification. The obtained stablecoins will be utilized for workstream (subDAO) members compensation.

We are currently exploring a few potential DAO2DAO token-for-stable swap with Ethereum-based DAOs that are looking to diversify their revenue streams. This allows for the diversification of our treasury and the extension of our operational runway without creating sell-pressure of EVMOS in the open market.

Non-stablecoin tokenswaps may also be considered to build liquidity and secondary reserves to achieve our long-term goal of self-sustainability.

When an opportunity for a token-stable swap is not available at a moment when the Treasury is in need of stables, no more than 50K Evmos from the Diversification Fund can be sold on the open market per month.

Total Funding Request for Phase 1

The Governance Council treasury will be deployed as a Gnosis Safe with a 4-of-6 configuration on Evmos mainnet.

Upon the initiation of Phase 2 funding as detailed in ECP-3, the Council Treasury will be repurposed or a new contract will be deployed as the main Evmos DAO Treasury.

Appendix

Future Workstream Leaders / Council Directors

We are looking for full-time contributors to fill leadership roles. The goal of these full-time contributor roles is to find the next leaders that will step up and establish their own workstreams. The following is a rough suggestion and ideas of what helpful roles can be filled by the community.

• Department of Education

  • The mission of the Department of Education is to develop, maintain, and promote educational contents and programs for the Evmos Community.
  • This includes the creation of interactive educational content in governance related topics, and eventually the creation of technical content for developers.

• Department of Communications

  • The Department of Communications is responsible for creating and coordinating direct dialogue between the Evmos DAO and the diverse Community Members.
  • Through outreach, communication, townhall meetings, and official announcements from the Governance Council and the various workstreams of the DAO, the Dept. of Communications removes obstacles and barriers and creates opportunities to improve public awareness and involvement in the DAO.
  • The Department of Communications will also be responsible for the creation of documentation and communication channels in non-English languages.
  • The Department of Communications helps build and maintain the transparent, responsible, and accountable governance system that the Constitution calls for.

• Department of Growth & Outreach

  • The Department of Growth will be responsible for the strategic outreach and engagement of developers, projects, and other DAOs for the purpose of ecosystem growth.
  • Through the generation of leads, coordination with biz dev, outreach campaigns, and strategic bounties, the Department of Growth should ramp up community engagement, elevate the Evmos brand and awareness, illustrate our vision, mission, and values, and enable the facilitation of easy onboarding of projects and developers.

• Department of Research & Development

  • The Department of R&D will work closely with the Governance Council to research, develop, and maintain key infrastructure, public goods, and the development of smart contracts.