Adopt Snapshot + Aragon for binding governance

This proposal raises a lot of questions for me. I’m sure Jorge has good intentions but looking at the proposal as it is raises a lot of questions and risks, while giving very few benefits.

My first question is, what exact need does it solve for the yearn community today?

Second, if the multisig is proposed to keep a veto right (for a very long time as stated) then why is there a need at all?

Third. Governance questions are really hard. Is the goal if yearn to be a fully fledged DAO? How should it be run in that case? Direct democracy (on-chain voting), representative democracy (public multi-sig owners), anonymous multi-sig, separation of governance and treasury control, another way? a combination? As in all development, before the goal is very clear, you should probably not select the solution (and even less the tool).

The Aragon process seem to be very complex, with many dependencies on both code level and system level with intricate interdependencies with other systems and initiatives. Is that what is needed right now? The rent seeking question is also opened above.

In the proposal it is hard to understand the real benefits for the yearn community, but there is a long explanation of the benefits and token price increase that should follow for ANT holders.

My suggestion would be to not rush things. Let Aragon launch the system and let some other project run for a considerable amount of time, so that the deployed system can be evaluated. Then take up the discussion again if the yearn community if a specific pain point is solved with this.

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The default is paying a fixed fee per action that gets submitted that could be disputed in Aragon Court. That fee is currently $0, but ANT holders are in control of that parameter and will probably not always be 0.

Also in the default case, it would be the user interested in getting something executed the one that pays the fee, similarly to how right now a user that sends a transaction that causes a vault to rebalance ends up paying the gas for everyone.

The Aragon Association (a Swiss non-profit with a mandate to support Aragon) has historically been funding development and maintenance, it has a healthy treasury and over 15 years of runway at current burn rate. The Aragon Network DAO will have an internal treasury as well that is directly allocated by ANT governance.

Governance proposals could transfer the powers given to the DAO to some other system.

+1. Perhaps YFI Holders could delegate their votes to known, vetted Community representatives as an alternative approach for limiting gas fees.

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@danielzak those are amazing questions! Replying one by one:

Yearn’s governance and treasury is currently in the hands of a very small (and surely well intentioned) set of people. They currently hold the keys to a growing ecosystem of financial products. If the multisig doesn’t sign, the system cannot move.

Moving to a completely decentralized system would make yearn more anti-fragile.

Because this way we prevent relying on Aragon Court for all the security of the system. I think removing the multisig is inevitable for having a fully decentralized system, but I think it is a good idea to get there progressively.

My take is that we should get the DAO deployed and give it responsibilities that make sense progressively. It doesn’t need to be the ‘official yearn DAO’ from day 1, and I personally wouldn’t recommend that.

Happy to provide a bit more of color on specific parts and context on why we decided to architect some things the way we did. Also open to improvement suggestions!

I was very explicit about this on purpose to clarify how Aragon can benefit from yearn (or anyone) adopting the system for transparency’s sake. It would have been easier to keep that part out and inside documentation that some people here might not have read.

I understand this concern and I was very open about that instead of somewhat hiding it. I think this can be considered rent seeking in the same way that you could consider miner fees to be rent seeking. You are paying for a service and the more money that goes to these service providers the more secure the system is (since fees should have a direct impact on market cap).

As commented above, I think deploying a DAO for yearn and progressively trying it out for lower risk endeavors could be a good idea.

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Thanks for patiently clarifying the questions from the community. Appreciate it.

Given that you guys are also proactively interested in working together, if the community feels the need for a governance system, Aragon has my vote. It could be a win win for both projects and strengthen our respective network effects. Also yearn’s resources might be better spent focusing on other areas rather than reinventing the governance wheel. The key would be for more experienced community members to validate if Aragon would be a good fit for yearn. All the best!

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This is a very interesting proposal. I have a question and a few comments.

I am concerned about your mechanisms to deter illegitimate actions. Making these prohibitively expensive if judged wrong seems completely counterintuitive to your organisations principles, specifically that of free and fair access. This seems to suggest that only someone with significant financial assets, and willing to possibly loose some, can challenge decisions. It also means that someone with ‘fuck you’ levels of money can still challenge actions that are detrimental to them to cause disruption to the wider ecosystem while delaying implementation of proposals (for their own benefit). Not to mention, creating a system dependant on rational actors is inherently flawed, as humans are often irrational (or just wrong). This seems like a key design flaw in your proposal.

So the question is: How do you reconcile this with the principles your organisation espouses?

I do want to say, though, that this does seem fixable. The economic deterrent does make sense, but rather than having one actor be able to challenge it, how about requiring a certain about of collateral staked to challenge proposals? I would suggest that there exist a threshold of capital that must be reached to activate the Aragon court, and that any one person can contribute to it, but it would require $X from X amount of people in order to be effective.

You could further democratise using quadratic voting (see this primer by Vitalik Buterin). In that $1=1 vote, $25 = 5 votes, $100 - 10 votes etc. This would further decrease the potential for whales to have outsized influence on governance decisions and incentivise more community action which is what this space is all about.

I also have a few comments.

  1. I think this proposal could do with some further effort towards clearly communicating core concepts to lay users. I think some basic graphics could illustrate the points being made here effectively, showing the way that Aragon governance would insert itself into the yearn decision making process. See the primer I linked for Buterin’s (2019) explainer on quadratic voting as an example of what I mean, or any of Chainlink’s research papers. In my view one of the most important aspects for any organisation in this space to focus on is effective communication of complex concepts to lay people.

  2. With regards to security, the multisig veto is absolutely crucial to start off with. This allows Aragon to insert itself into the decision making structure, but also removes any potentially binding flaws. I am a big fan of this and would support rejecting the proposal outright without this.

  3. I am a big fan of agreements working optimistically, this is good project design.

  4. This proposal seems to primarily benefit Aragon in the short term in terms of bootstrapping adoption, while not providing any significant value for Yearn. However, if successful, it would have significant long term positive benefits for the community that we are trying to build. This is something that Yearn and Andre have voiced support for in the past.

Overall, I am very interested in this proposal. I am a strong believer in the need to bring subjective human judgements on chain. A purely objective view is an incomplete picture of the world which is inherently doomed to fail because it fails to account for key sources of intangible value such as sense of community and trust.

The successful creation of this type of framework, a standard for decentralised governance, would yield dividends in successful project management in the long term. I don’t believe that adopting this is of strong immediate benefit to Yearn itself in the short term, but I do think that the goals it sets out to achieve are consistent with those of both Yearn as a project, and that of Andre, who built it.

Given that Yearn has an ethos for supporting the build out critical public good infrastructure in this space, I believe that this proposal is worthy of further consideration. However, in my view there have been some key questions raised in this thread that need further exploration before proceeding.

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Hey, excited to see this proposal being discussed and about the Snapshot + Aragon integration in general. I work at Aragon One, so noting the obvious bias, I do think this solution is a solid way to further decentralized yearn’s governance and reduce risks for both multisig holders and token holders.

Making these prohibitively expensive if judged wrong seems completely counterintuitive to your organisations principles, specifically that of free and fair access.

In order to prevent illegitimate actions it’s important that taking those actions comes at a significant cost, otherwise the system would not be particularly effective.

Free and fair access in this case, isn’t that the mechanism is free to use, but that nobody is restricted or disadvantaged in their use of the solution.

This seems to suggest that only someone with significant financial assets, and willing to possibly loose some, can challenge decisions. It also means that someone with ‘fuck you’ levels of money can still challenge actions that are detrimental to them to cause disruption to the wider ecosystem while delaying implementation of proposals (for their own benefit).

I think this hits on a really important point. When you challenge an action, you are delaying a proposal from being executed, if you can do this at low cost it becomes possible to grief the community by slowing down the proposal process.

There is a natural tension here between making it cheap to raise disputes and cause delays, and the desire to execute proposals efficiently.

Not to mention, creating a system dependant on rational actors is inherently flawed, as humans are often irrational (or just wrong). This seems like a key design flaw in your proposal.

While no system is perfect, I think one of the big advantages of decentralized systems is their resilience and robustness in the face of irrational, wrong, malicious or otherwise unexpected actions of various actors.

The status quo depends on and entrusts security to multisig holders, even if we assume that they are honest and will continue to remain so, as the value they secure with their keys increases they become more and more vulnerable as individuals to attacks from others.

Moving to a more decentralized model, helps to reduce these risks and creates checks and balances between multisig holders, token holders, and a decentralized third party (Aragon Court).

The economic deterrent does make sense, but rather than having one actor be able to challenge it, how about requiring a certain about of collateral staked to challenge proposals? I would suggest that there exist a threshold of capital that must be reached to activate the Aragon court, and that any one person can contribute to it, but it would require $X from X amount of people in order to be effective.

While not currently implemented, the ability to crowdfund dispute fees via a smart contract is totally doable, and I agree that having the option for multiple people to pool funds/risk would be beneficial.

You could further democratise using quadratic voting ( see this primer by Vitalik Buterin ). In that $1=1 vote, $25 = 5 votes, $100 - 10 votes etc. This would further decrease the potential for whales to have outsized influence on governance decisions and incentivize more community action which is what this space is all about.

I would love to see something like this but would have concerns about how to implement in a way that is sybil resistant, because if its not sybil resistant that it isn’t really fair and the actual security provided becomes much harder to quantify.

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This is similar to Kleros, right? Not sure which came first but very intriguing idea. Perhaps Kleros and Aragon can learn from each other in possible future.

Thanks @jorge for the work you and your team have put into this proposal.

I share the concerns that @danielzak brought up which weren’t really addressed.

It’s not clear to me what problem this solves and why it needs to be solved now. You say that the goal of this proposal is “moving to a completely decentralized system would make yearn more anti-fragile.”. But as you yourself admit, this wouldn’t be achieved for a long time since the multisig is proposed to keep a veto right for the foreseeable future.

Why should the yearn community and DAO, whose market cap exceeds what Aragon Court can safely secure, be the guinea pig for Aragon’s well-intentioned but complex new governance infrastructure? Could we first see some examples of this run for a while on smaller DAOs to make sure all the edge cases have been ironed out?

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At the moment, we can differentiate the powers the yearn multisig has into two different aspects:

  • Execution: as a result of a successful vote, the multisig executes an action. Since there’s no binding agreement with multisig signers, there’s nothing impeding them from executing a random action that hasn’t been approved. Legitimate and illegitimate actions look exactly the same for the multisig smart contract.
  • Vetoing: the community can vote on something that is too risky for the multisig to enact (e.g. let’s transfer some money from the treasury to terrible people!) or just against the interests of the multisig (e.g. let’s transfer governance over this important contract to a DAO, making the multisig lose power and influence). If multisig singers don’t want to execute something, they just won’t and there’s no recurse.

What we are proposing here is moving to a model in which we remove ‘Execution’ privileges from the multisig, while still keeping ‘Vetoing’ for security. Also note that currently a multisig veto would be passive (if it wants to veto it just doesn’t do anything), while in the proposed DAO model, vetos would need to be active (multisig signers actually need to act to block an action). When we are feeling comfortable about security, the governance process can remove veto rights from the multisig in one vote.

This is a fair concern. To be honest (and trying not to put words on anyone’s mouth), I have just been chatting about Optimistic Snapshot with @andre.cronje as we were building it and he showed appetite for making yearn’s governance binding on-chain in a short timeline, with interest to use it to burn YFI minting permanently if approved.

This motivated me to write this proposal. I also think this is a bit insane, but I think that if implemented progressively it can be done safely.

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Thank you for the work you did and for such a well-written proposal, jorge.

Unfortunately, I vote against.

It seems to me that this is too much of a complication of the governance system of yearn, at least for the time being. And I agree with aliatiia, I would also like to see governance more as a library.

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Thanks for laying out your thoughts, @jorge.

It’s great that Andre is interested in this proposal and his opinion is highly respected in this community, as it should be.

However, Andre himself has said he gets excited by new ideas for the dopamine injection. And the reason he delegated governance to the yearn community is to make sure these ideas are followed through to work sustainably in production.

As a voter in this community, I want to understand the motivation for this proposal well so that it isn’t a solution looking for a problem, especially since it touches on governance itself.

Why are we solving this problem now, with a system that hasn’t been tested at scale yet? Was there some near-term concern about the multisig executing a random action that hasn’t been approved?

I’m personally very happy with how the executive team and multisig signers have made decisions so far and would rather spend our attention on increasing TVL or fees in the system.

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Love the idea, but doesn’t establishing a court increase the bureaucracy and increase the length of the decision making process? Perhaps it would be a good proposal in the long-term but quick decision making seems to be more important at this point. Also about the Multi-sig holders, I feel like their social capital is the most important thing at stake, it wouldn’t be worth risking their social capital.

I guess my question is how do you make sure it is a quick decision outcome which doesn’t hinder the speed of innovation? If you slack a little in this industry you will fall behind.

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+1 agree with this. Aragon very good, but I am unsure if this is needed at this particular moment in time.

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I’m sorry @jorge if this thread becomes a bit hijacked to talk about governance and proposal evaluation at a higher level.

I would propose that all YIP proposals are evaluated starting with two basic questions:

1: What is the problem to be solved?
2: Why now?

Having these in mind when discussing proposals will force the proposal authors to be very clear about the pain point to solve and urgency already when submitting it.

All new code, tools, systems and processes increase technical debt and coordination complexity. My view is that in a fast moving project like yearn nothing that is not broken or does not work should be fixed. There are so many other opportunities that should be prioritised.

I thank you for you answer @jorge but I feel they are contradictory:

At the same time the proposal is to let the multisig keep full veto. I think it would be a risk at this point to open the floodgates to on-chain proposals that will automatically go through if not carefully evaluated by the community and multisig holders.

It’s still not clear to me what the current pain pain point is, why Aragon is a solution to this problem and why it needs to be implemented now.

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I am for the proposal, but I would do the following.

We only use Aragon Agreements in few occasions to start and in non-critical decisions. Slowly we move forward if we see it working.

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I think the Multisig-Situation needs to be reworked sometime, but in another way.
The proposed solution feels bloated, unnecessarily complex and somewhat dangerous because of dependencies.

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I have just found this smart article about token voting and thought it fits perfectly in this discussion so I’m just gonna leave this here.

This shows some of the pitfalls of flat token voting and I am therefore against this proposal.

I think we can build smarter Governance structures than this, we might even be able to incentivise the author of this article to help us in doing so.

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I think it is exciting to see such thorough discussion on using DAO + agreements to fill gaps for Snapshot votes, make dispute resolution more fair among internet strangers (ADR).

A bit on my background:

  • I am attorney & programmer building with OpenLaw / The LAO.
  • I also participate in LexDAO, which brings other attorneys & programmers together to add legal layers to EVM, provide ADR services, & kill some fud around internet money.

I use both Aragon and Moloch DAO contracts for myself and clients, and admire the org. innovation Aragon One is bringing to this market. Though some of my ADR dev. with LexDAO might be seen as competitive with products, like Aragon Court, I see it as symbiotic & essential to have multiple-providers of ADR, and the amount of hard work Aragon One team puts into design and audit of their code cannot be understated.

Therefore, I would like to see this develop into an awesome experiment, or at worst, learn what the comfort levels are for using DAO ADR. If it seems desirable to begin this process, and since there is already a Moloch DAO v2 deployed that claims affiliation to this community, “yEarn yDAO”, I feel there is a unique opportunity to cross/compare what DAO framework, as well as ADR, is best suited for yEarn and report findings to the rest of the industry.

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