Treasury Prosperity
[https://hackmd.io/@nlWRE-3fQzmUnPRDIXb2Ag/BkhD29wKt ](https://hackmd.io/@nlWRE-3fQzmUnPRDIXb2Ag/BkhD29wKt) The following is an assessment of the on-chain treasuries for Polkadot and Kusama, and aims to provide thoughts and encouragement to the community on it’s improvement. Would appreciate feedback 🙏
Comments (3)
Comments (3)
Excited about this article. We propose 2 topics for discussion.
1. Retrospect or introspection
We first raised this topic on this post and we developed dotreasury to support the introspection mechanism building. Currently dotreasury acts more as a treasury explorer or dashboard, but we have tried some work to emphasize the introspection. Grading maybe a way for community to express their opinions about the treasury spends. Check grading feature details here.
2. Community engagement
A fact is that few participate treasury governance compared to the number of polkadot community. Most token holders may just listen news that some team got treasury sponsored with some council motions passed without really thinking what work this treasury expense may involve, what the expense may bring to ecosystem.
Another problem we worry is councilors' inactiveness. We guess that some councilors may just follow the votes for some motions, while we expect more query from councilors about the proposal.
One topic is: for some big treasury expense(e.g. > $200K), how about approving it by democracy. Benefits:
- Improve community engagement, at least provide a way for community to manage treasury fund
- More decentralized and prevent collusion
I'm interested to see where Tips fall in the pie chart of treasury spending by category, bounties are included, so does that mean that tip spending is so low as to not register on Kusama and Polkadot? That is honestly a disappointing state of affairs in my opinion :)
It is fascinating to confirm that Kusama and Polkadot are disproportionately conservative compared to other treasury-enabled DAOs. I hope that somewhat encourages the community, councilors, and developers to do some introspection around why that is the case. Until, as you state in your assessment, the chain treasuries are able to participate in yield-generating activities, there is no profit motive for treasury spending, which could be one component - but I would argue that the core component, if you scroll through the DAO frameworks on DeepDAO to illustrate this, is that the barrier to entry and risk to create a proposal for most of the DAOs with high spending, is low. Most things near the top is uses snapshot or compound or aragon and creating a proposal is gated only by holding a small amount of tokens - Most things near the bottom are Molochs, and are based on membership and exclusivity.
You can see that any situation where a core group is (synchronously) determining the payout of treasury proposals, or are allowed to create proposals for treasury, will not be able to grow at the rate that the networks should, and will not match the pace of development of the ecosystem. Thankfully, the logic of our chains does actually allow proposals to be created largely permissionlessly, along all mechanisms we have access to currently - but other than tipping, which is evidently not a significant component of spending - the actual approval of spending has significant hardcoded and "soft" coded (regarding the human procedure one needs to go through for acceptance in most cases) bottlenecks.
Bounties and Tipping were meant to be the answers to that problem.
In the case of tipping, we removed the requirement for the decision-making group to agree, or even coordinate synchronously, on the amount or acceptance of a proposal. From the proposer's perspective, a Tip is also much lower risk - this is what I would argue allows us to coordinate around tips asynchronously and allows proposals to truly behave permissionlessly, unlike treasury proposals, where the risk of loss of deposit means that we will never see organic and spontaneous proposals to treasury as it currently exists. From the response I have seen from the community, tips work, it supports creators and educators in their pursuits within our ecosystem, it has incentives to encourage the community to actually use it - in contrast to the disincentive to making a treasury proposal - it is an easy concept to grasp with low stakes for new entrants, and hell, it works as an onramp into the ecosystem.
The idea behind bounties was that we delegated the acceptance of a payout to an elected curator, although in practice without the imminent child-bounty extension, the council still needs to propose and accept a curator for each payout that would occur via the bounty mechanism so it couldn't possibly have been used to "scale" the number of concerns the treasury could address, as it was arguably intended to. Like Tips, Bounties also have inherent incentives - although currently only for curators - who are effectively appointed by council, and not for proposers of bounties. The downsides of bounties will be addressed partially by the child bounty mechanism, but even then there are still some things that prevent bounties from achieving what they have the potential to.
Here are some things I think will keep us moving in the right direction:
- Child Bounties - Bounties are simply useless without them - they are currently just a mechanism of transparency; a treasury proposal, proposed permissionlessly, but paid out directly to a curator, and we get oversight of the first movement of funds. They should be a mechanism of delegation. If you can only delegate to someone who can only direct payment to one destination, that is not delegation of work, because the total amount of work being done for a single outcome is increased, not decreased. We change that by increasing the number of payouts that can be performed via a single delegation (from council) and that is what child bounties accomplish, because the curators of bounties further delegate and propose the curators of their child-bounties, not the council.
- More aggressive integration of the tipping mechanism in community wallets and apps, it's on the roadmap of some teams, but I'd argue that it should have priority over even staking where possible - it is our most powerful onramping mechanism, and where staking has developed increasingly high barriers of entry, and therefore precludes many participants below a certain threshold from using it at all, tipping has close to no barrier to entry, so I'd argue it should be presented to the community as an accessible part of the ecosystem.
- Moving the default behaviour of rejecting treasury proposals from slashing of the deposit, to returning the deposit - this matches the behaviour of tips, and like tips, we can retain the option to slash the deposit by creating a new option to "reject with prejudice". I believe it is imperative that we remove: the high stakes environment and complex communication process that I can personally attest is scaring away potential proposers and projects from our ecosystem, and; the bottleneck of synchronous offchain coordination regarding acceptance of even the "large ticket" treasury spending items that treasury proposals represent. Right now, we fear rejecting proposals because it has a significant and tangible cost to the proposer when we do - that fear equates to hesitancy in accepting or rejecting a proposal, after all, we can only do one or the other. A third option could make things much more expident - because when in doubt, we could ask a team to re-evaluate without slashing them and we won't need to coordinate an additional tip to "refund" their deposit.
- Education about and visibility of these mechanisms will always be much more effective in encouraging people to use them than any amount of active outreach to project teams and individuals. Ideally Councilors [until they no longer exist!] and Power-users should just be part of an uncountable set of advocates and "treasury proposers" not the gatekeepers.
DAOs are DAOs because they are governed and operated decentrally, with their participants motives being aligned by incentive design - Kusama and Polkadot, until now, do not fit this criteria very well, they are operated in a decentralized way, but governance is driven by a set of hopefully well-intentioned power-users that can more or less dictate direction, because there is no explicit incentive for any others to provide their own direction. That incentive, as discussed on multiple occasions, may be misguided towards governance bodies like the council, but I believe the success of the tipping mechanism may be a sign that in cases where the stakes are lower, or no bias is created by doing so, giving the community a push (ie, via pallet-lottery, or inbuilt incentives for proposals or curation work) may have very positive results.
Excited about this article. We propose 2 topics for discussion.
1. Retrospect or introspection
We first raised this topic on this post and we developed dotreasury to support the introspection mechanism building. Currently dotreasury acts more as a treasury explorer or dashboard, but we have tried some work to emphasize the introspection. Grading maybe a way for community to express their opinions about the treasury spends. Check grading feature details here.
2. Community engagement
A fact is that few participate treasury governance compared to the number of polkadot community. Most token holders may just listen news that some team got treasury sponsored with some council motions passed without really thinking what work this treasury expense may involve, what the expense may bring to ecosystem.
Another problem we worry is councilors' inactiveness. We guess that some councilors may just follow the votes for some motions, while we expect more query from councilors about the proposal.
One topic is: for some big treasury expense(e.g. > $200K), how about approving it by democracy. Benefits:
I'm interested to see where Tips fall in the pie chart of treasury spending by category, bounties are included, so does that mean that tip spending is so low as to not register on Kusama and Polkadot? That is honestly a disappointing state of affairs in my opinion :)
It is fascinating to confirm that Kusama and Polkadot are disproportionately conservative compared to other treasury-enabled DAOs. I hope that somewhat encourages the community, councilors, and developers to do some introspection around why that is the case. Until, as you state in your assessment, the chain treasuries are able to participate in yield-generating activities, there is no profit motive for treasury spending, which could be one component - but I would argue that the core component, if you scroll through the DAO frameworks on DeepDAO to illustrate this, is that the barrier to entry and risk to create a proposal for most of the DAOs with high spending, is low. Most things near the top is uses snapshot or compound or aragon and creating a proposal is gated only by holding a small amount of tokens - Most things near the bottom are Molochs, and are based on membership and exclusivity.
You can see that any situation where a core group is (synchronously) determining the payout of treasury proposals, or are allowed to create proposals for treasury, will not be able to grow at the rate that the networks should, and will not match the pace of development of the ecosystem. Thankfully, the logic of our chains does actually allow proposals to be created largely permissionlessly, along all mechanisms we have access to currently - but other than tipping, which is evidently not a significant component of spending - the actual approval of spending has significant hardcoded and "soft" coded (regarding the human procedure one needs to go through for acceptance in most cases) bottlenecks.
Bounties and Tipping were meant to be the answers to that problem.
In the case of tipping, we removed the requirement for the decision-making group to agree, or even coordinate synchronously, on the amount or acceptance of a proposal. From the proposer's perspective, a Tip is also much lower risk - this is what I would argue allows us to coordinate around tips asynchronously and allows proposals to truly behave permissionlessly, unlike treasury proposals, where the risk of loss of deposit means that we will never see organic and spontaneous proposals to treasury as it currently exists. From the response I have seen from the community, tips work, it supports creators and educators in their pursuits within our ecosystem, it has incentives to encourage the community to actually use it - in contrast to the disincentive to making a treasury proposal - it is an easy concept to grasp with low stakes for new entrants, and hell, it works as an onramp into the ecosystem.
The idea behind bounties was that we delegated the acceptance of a payout to an elected curator, although in practice without the imminent child-bounty extension, the council still needs to propose and accept a curator for each payout that would occur via the bounty mechanism so it couldn't possibly have been used to "scale" the number of concerns the treasury could address, as it was arguably intended to. Like Tips, Bounties also have inherent incentives - although currently only for curators - who are effectively appointed by council, and not for proposers of bounties. The downsides of bounties will be addressed partially by the child bounty mechanism, but even then there are still some things that prevent bounties from achieving what they have the potential to.
Here are some things I think will keep us moving in the right direction:
DAOs are DAOs because they are governed and operated decentrally, with their participants motives being aligned by incentive design - Kusama and Polkadot, until now, do not fit this criteria very well, they are operated in a decentralized way, but governance is driven by a set of hopefully well-intentioned power-users that can more or less dictate direction, because there is no explicit incentive for any others to provide their own direction. That incentive, as discussed on multiple occasions, may be misguided towards governance bodies like the council, but I believe the success of the tipping mechanism may be a sign that in cases where the stakes are lower, or no bias is created by doing so, giving the community a push (ie, via pallet-lottery, or inbuilt incentives for proposals or curation work) may have very positive results.