Disclosure: Jose here from Delphi Digital. Delphi Ventures holds positions in both YFI and ANJ
I totally agree that governance in itself is a library to import rather than a product to pay for. That said, while “governance as a service” is what Aragon provides (and it is indeed free), it’s not what Aragon Court provides nor is it the point of this proposal.
Simplistically, courts in the traditional world act as an external, independent third party which individuals/organisations can access in case others act in a way which doesn’t abide by either: a) their predefined contractual relations b) the governing law. While b) doesn’t exist in crypto, a) does, representing the wet and dry code individuals agree to when coming together to form a DAO.
I understand the concerns regarding sovereignty, but from my perspective Yearn’s governance would still be self-sovereign. The Yearn community defines the rules and values by which it seeks to operate while the Court merely enforces them in case they’ve been broken. Crucially, it seems to me that this enforcement role must always be played by an independent, neutral, external third party since it is effectively a bug in the governance system and thus cannot be solved recursively by the very governance system where the bug lies. For a simple example of this, see the link on DAO 51% attacks that Jorge posted.
To use an analogy from the traditional world, Yearn would still remain the legislative and executive branches, creating the laws, making decisions and executing them. The Court would be the judiciary, an independent branch acting as a check on faulty governance decisions. In the long term, separation of powers ensures Yearn can be run optimistically, with an agreement specifying Yearn’s values and by-laws, and a few appointed people making decisions quickly, all held in check by the possibility of being taken to Court.
To be clear, Yearn should still ensure its governance is as robust as possible such it is mostly self-sovereign and the Court is called upon as infrequently as possible. Court cases and decisions will also help this by providing data to the Yearn legislative branch (i.e. the DAO) which can be used to alter the by-laws to ensure cases don’t happen again… That said, I believe the Court should still always be there as a safety valve or governance insurance layer to protect from governance bugs, i.e. actions that aren’t in accord with Yearn’s values/by-laws.
In terms of rent-seeking, similar to a Layer 1 PoS system, the Court’s security is based on its market cap and it’s pretty important that a robust fee market develops to sustain this (as well as to prevent Sybil attacks in the form of spurious claims). Over time, the fee market should trend to the cost of security with minimal to no rent extraction on top of this. In addition, as should be clear above, the Court should be used as little as possible and merely exist as an insurance layer, with the agreement being altered by Yearn holders in response to each case to prevent future disputes. That said, I agree its current market cap is a serious security issue and would endorse gradual adoption where multi-sig users retain veto power.
Further down the line, I also see the Court as potentially playing an interesting role in facilitating inter-DAO collaboration and agreements. Given the size of YFI and the number of verticals in crypto that it touches, it seems to me the Court could be a pretty important piece of infrastructure to enable it to keep growing synergistically alongside other DAOs and expanding the design space for potential collaboration.
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