#Governance System: Councils, Subcouncils and Direct Governance.

1 messages · Page 1 of 1 (latest)

steady crystal
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Hello everyone,

With the current turmoil regarding Marketing Sub-Council I have been thinking about the entire Illuvium's Gov System.

For me, the smoothest solution would be to have the Direct Governance Model implemented as much as possible. That is, when a decision needs to be made on a matter, the Internal Team delimits the choices and the community votes with cuadratic or cubic corrections. That would be frictionless, simple and effective. It also would reduce the scope of the council, which at the current date I don't feel they represent me in any regard. I say this with all the respect I have for the council, as I am sure they are making a great job in other aspects. To be fair, I feel like the current structure doesn't benefit them when it comes to representing me or anyone in particular.

Now, the Council can be necessary as there are some dicisions that can't be made 100% publicly (Legal constraints, NDAs, Partnerships, etc.). Obviously we won't have every single community member to sign an NDA. This is where the council makes sense, as they are under NDA and they can filter the information for us. With that in mind, here it is what I'd expect from the council:

I expect from the council that, for those matters that are subject to confidentiality, they prepare and conduct binding polls for the community. In these polls they don't disclose anything legally forbiden. However, for each option in the poll (delimited by the internal team), they provide an impartial insight so that us, the community, can do fundamented voting.

I would love to know what people have to say in the Governance aspect. As well as proposing new ideas. I know the internal team is unsure of the current structure, so we might as well help them define a better model with our feedback.

Looking forward to reading you all,

Xz.

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With this I am not saying to have people voting on every issue, but there could be some weekly/ biweekly / monthly voting on key stuff.

Plus voting is not compulsory, but if you have ILV you may want to have a say.

jaunty reef
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  1. Proposals about Governance are like two months too late.

  2. How many tokens does the team own compared to rest of the community?

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  1. We are saying that Marketing Sub-Council will be incompetent so we should let everyone vote. How is that any better.

(btw. IMC has the final say, Marketing SC isn’t deciding anything)

quick agate
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There's a couple fundamental issues with direct democracy.

Accountability - When a decision is made with direct democracy, who is accountable for that decision? Under a decentralized model, no one person would be required to answer for decisions. This is a strength in some regards, but a weakness in others.

Agreements - Agreements become impossible with direct democracy. This can be an issue on multiple fronts. If the DAO intends to sell physical mechandise, or utilize banking services, or really interact with anything outside of Web 3 at all, it needs the capacity to engage in agreements. Agreements require signers, and traditional institutions are not going to adjust their models to cater to our decentralized ethos.

Informed Voting - Having specialists evaluate, report on and ultimately choose options is drastically more efficient than requiring every individual voter conduct their own research and decide directly. This is already the case, but will become even more apparent as we have products launching. No one person can be expected to be an expert in macroeconomics, legal topics, gaming, long term planning and business strategy, communication, marketing, branding etc. It's been a challenge to ensure I've been informed about some of the topics raised this epoch, and I've consulted experts on a variety of topics that have arisen.

There are more potential issues as well (things like the influence of outside fiscal interests impacting policy decisions through advertising or campaigning).

One thing I don't believe has been factored into this critique of our currently untested representational Gov V2 systems is that all proposals are subject to community review. Proposals must meet a threshold of community approval to even be moved to a vote. Unpopular proposals that don't meet that criteria must be revised to incorporate the feedback of the community.

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Additionally, I don't believe your proposed structure would meet the criteria to be considered a DAO. If the Labs team (as a contractor to the DAO) is the only group delimiting our decision space, we're really not in the driver seat. This shouldn't be misconstrued as a criticism of the team - There are designated seats for team members on sub-councils for a reason, but we need to be mindful of how our DAO operates and might be viewed.

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I should reiterate that the current council spent months of this epoch consulting with experts to create the Gov V2 structure, to ensure it is as compliant as possible. The same amount of rigour should be expected of any system that might replace Gov V2. This isn't to say changes aren't possible - They absolutely are, but if we're doing a fundamental overhaul of our concensus mechanisms, we need to be working off more information than "I feel like this could be good".

steady crystal
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Hi Blickter,

Thank you very much for this amazing feedback. I have learnt things and taken into account factors that I wasn't considering before. I appreciate it.

It definitely is a complex subject. And it's true, we can't expect everyone to make informed decisions in so many aspects. But this is happens in every democracy right? With your feedback I have gained more faith in the Council System. I thank you for that!

quick agate
# steady crystal Hi Blickter, Thank you very much for this amazing feedback. I have learnt thing...

It is, and I do apologize if my tone was hostile at all, re-reading my statement it might come off that way. It would mostly come from frustration about the timing of these discussions about Gov V2, moreso than whether there are or are not places to improve Gov V2. It WILL need revision, and I do believe there are areas to improve upon it. I'm hoping we can continue to evaluate the structure as we see how it works in practice, but I do hope that recent events don't shake the confidence in the systems to a point where we aren't able to give them an honest try.

steady crystal
north aurora
# steady crystal Hello everyone, With the current turmoil regarding Marketing Sub-Council I have...

Hello,
It is a bit sad that you don't feel represented in the current Gov model and I strongly believe that one of the reasons why we made Gov v2, was to address that sentiment by giving DAO members like you, more people to rely on, engage with and feel heard.

Obviously Gov v2 isn't perfect and there is a consensus on the fact that it will need to be tweaked and improved along the way.

But I don't feel like your solution actually helps much because:

  1. It is utopic to think that every DAO member is able to make informed and educated choices about every decision the councils vote on.
  2. It totally annihilates the current possibility from the DAO to be heard by proposing their own ideas.

I appreciate you putting forward your opinions on the current Governance model and hope in this discussion good and viable solutions will be discovered.

graceful mauve
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This was inspired by the commentary from @fallen ginkgo right? Just want to make sure we’re still coming from the same perspective that I had discussed with him/her.

fallen ginkgo
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I just saw this channel and we can use it in order to continue our discussion.

graceful mauve
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Cool just making sure I am on the right page.

steady crystal
steady crystal
graceful mauve
steady crystal
north aurora
serene spindle
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I second @quick agate here, but have a few things to add.

I have mixed feeling's about direct democracy, in that it would be my preferred way of governance in an ideal world. But as evident with other DAOs that have used it: participation dwindles, ideas dry up and the project stalls. Whales have the potential to take the helm. For some key votes I think the DAO should investigate including a SnapShot vote for all stakers. Such as IIPs for direct financial impacts on stakers.

Also we need dedicated groups to vet and improve ideas (currently sub-councils in V2). Without these groups, community ideas may go unvetted and unimproved, resulting in poorly structured proposals that can cause issues, even with the best intentions. If the only ideas that are vetted and informed are those coming from the team, then the governance process is not very decentralized.

I also dislike politics but fail to see a better way and seems for human history to be ingrained in any representative system. Even in @fallen ginkgo 's delegation of vILV idea I see the potential for politics. Someone or a group will campaign to gain favor and influence and be a powerful delegate.

Gov V2 has built-in increased participation by requiring IIPs to get support before being voted on and the communities ability to trigger a voting of no confidence to remove sub-council members.

fallen ginkgo
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I am currently reading and processing everyone's input, but haven't had time yet to respond. Probably when I wake up tomorrow morning.

steady crystal
fallen ginkgo
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The more I read and think about DAO organization and voting and also interfacing with real world corporations e.g. ILV Labs, the more I come to the conclusion that a DAO is still just a huge experiment and we are well advised to keep it more in an advisory role, than in an executive role.

See my post here: #1105891277066743948 message

If we think of a DAO as more of a community brain, that sits next to the corporate ILV Labs brain and body and we allow them to interact, but not one dominate over the other, we can still experiment with DAO governance, voting systems etc.

In my opinion ILV Labs should have the last say, when there is a conflict between DAO and CORPORATE.

Vitalik writes about Loosely-coupled (advisory) coin votes:

a coin vote does not directly implement a proposed change, instead it simply exists to make its outcome public, to build legitimacy for off-chain governance to implement that change. This can provide the benefits of coin votes, with fewer risks, as the legitimacy of a coin vote drops off automatically if evidence emerges that the coin vote was bribed or otherwise manipulated.

vitalik.ca/general/2021/08/16/voting3.html

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That being said, we can still think about voting systems, that sit between direct democracy and representational systems:

Imaging a delegate voting system, one where I can exercise my votes by directly voting on a proposal or just do nothing and let my delegate vote for me.

I can choose from a list of delegate addresses, either whitelisted or just any one who wants to be a delegate. We could setup it in such a way that by default everyone delegates votes to the IMC.

This would mean that everyone's votes would automatically (nobody needs to vote besides the IMC) go to the IMC and it would have the full voting power as specified in Gov 2.

Unless someone decides to vote on a specific IIP/ICCP directly. Then the IMC would loose the specific votes, but only for this specific proposal.

This works against voter apathy, but still gives everyone the option to vote on proposals they deeply care about.

A few more advantages:

  • Separation between legislative and electoral chambers, council and ILV stakers
  • Delegate system allows for constant „reelection“ instead of just during council election periods
  • Easy switch between default and individual voting per proposal
  • Less politics, just vote differently
  • Delegates can still run a political campaign, but I can ignore it because I can vote independently
  • There will always be politics, but politicians are worse and not needed in a delegate world

There are probably disadvantages, but I am sure they will be pointed out by my fellow DAO members. 🙂

tropic tiger
# fallen ginkgo The more I read and think about DAO organization and voting and also interfacing...

One thing you might have missed is the legal implications of what youre proposing. Having the Corporate entity (labs) have last say is a badge that the DAO is a farce and makes it subject to jurisdictional tax and risk implications. The way the DAO is right now is to strengthen its position that its DAO led and not corporate entity (labs) led.

Yes, DAO is experimental because its not borne out of rigid laws. Theres barely any guide on how the DAO operates in most jurisdictions. So its a hard balance of delegating authority while maintaining DAO status.

With Gov v2 Labs representatives are present in each sub-council the onus is on to them to impress upon the council members what is possible or the best course of action. The whole point is to have direct communication with the team and align the proposals.

Lastly, any subcouncil or CM whod be pushing agendas or proposals that runs contrary to the interest of the DAO would be subject to "vote of no confidence". Coupled with the multi-layer process of getting proposals approved there are multiple opportunities to ensure these proposals wont be passed.

fallen ginkgo
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Okay, I don't know anything about the legal and tax implications at all.

But I have a hard time believing, that a DAO needs to make all decisions in order to be considered a DAO.

The DAO isn't making almost any decision about our games or the economy at the moment. We would have this problem already.

I agree, however that the 1 Team Admin has a chance to vet out bad proposals. But it isn't guaranteed at all.

Vitalik mentions all sorts of problems: Vote buying, bribing ...

However, all current instantiations of decentralized governance come with great risks. To followers of my writing, this discussion will not be new; the risks are much the same as those that I talked about here, here and here. There are two primary types of issues with coin voting that I worry about: (i) inequalities and incentive misalignments even in the absence of attackers, and (ii) outright attacks through various forms of (often obfuscated) vote buying. To the former, there have already been many proposed mitigations (eg. delegation), and there will be more. But the latter is a much more dangerous elephant in the room to which I see no solution within the current coin voting paradigm.

I would also add AI generated "community" posts ...

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If we really believe the DAO could be the brains of ILV Labs at this stage we are in for a bumpy ride.

quick agate
# fallen ginkgo If we really believe the DAO could be the brains of ILV Labs at this stage we ar...

Did you read through the whole article, or did you just look at Vitalik's list of problems? Apologies, this post got long, but I wanted to be thorough.

Gov V2 is utilizing MANY of the solutions Vitalik had proposed to the 2 core risks he addressed.

i) inequalities and incentive misalignments even in the absence of attackers.

With the main solutions being centered around delegation (i.e. a representational system of governance, which we've been utilizing and will continue to utilize).

In more detail, a council's duty is to be informed on behalf of their electorate. This effectively solves the problem of individual token holders not having enough incentive to get sufficiently informed on all voting issues.

As for coin voting empowering token holders (stakers, in our case), we had discussed delegating game sub-council elections to the gaming community (through NFT ownership or possibly another mechanism) at a future date, to ensure representation is spread among all involved parties. Currently, all involved parties do have voting power (the community and team have tokens with which to delegate representatives, and the team have a guaranteed seat on sub-councils).

Conflict of Interest is possible, but significantly less easy to pull off in a system where a limited number of sub-council members exist. Most candidates would expose their conflicts through the nomination process as a part of their qualifications. Compared to determining whether wallet address 0x.... has a conflict of interest, it's a significantly better position to be in to have some knowledge of candidates prior to voting. There's probably the most room for improvement (or clarity at least) in this regard, but doxxing through the NDA does allow vetting of council member's potential conflicts by a third party (this would be the GCM in Gov V2).

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(ii) outright attacks through various forms of (often obfuscated) vote buying

A bad actor would have to buy out 3/5 of the members on the IMC, and would have to do so without being detected. Additionally, acting against the interest of the overall community could lead to a Vote of No Confidence against IMC members. This kind of concern is a lot more topical for a Layer 1 blockchain's governance, as changes irrevocably alter the nature of the chain itself. That's not the case with Iluvium, we have precedent for past council decisions being rolled back or altered, and nothing is irrevocable in the same way it could be on a L1. We can address issues after the fact.

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I'd like to point out some of the other solutions Vitalik proposes:

Use on-chain governance only for applications, not base layers - This is the case with Illuvium.

Add Time Delays - Where possible, we have included time delays to allow time for review. We can likely do better in this regard, but this is something that is built in, at a minimum through the voting period on Snapshot. Additionally, this is included by Vitalik to allow time for a fork. Forking isn't relevant to Illuvium. Our analog to forking would be replacement of council members believed to be acting against the interest of the protocol.

Quadratic Voting - We're utilizing this, and we're actually better off than simple quadratic voting, due to the staking requirement for voting power.

Skin in the Game - Vitalik's context is, again, with relation to a forkable L1. However, decision makers do have skin in the game - Being removed by a Vote of No Confidence results in a loss of pay for the period. We did try earlier this epoch to ensure that council members were required to keep more skin in the game, for a longer period (this was the lockup period for council pay we proposed), but the community did feel that it was too complicated of a system, and we ended up passing a revised proposal that did not include the lockup period. I'd personally be happy to revisit this with more readable wording, I suspect part of the reason this wasn't well-received was our communication about the intent.

Additionally, I need to point out that this article is from 2021, which is quite a long time ago in the world of crypto. It's a great article detailing some of the risks of governance, but we can't just look at the potential issues for a L1 as 1:1 analogs for the challenges facing Illuvium. We should also acknowledge that while there is likely room for improvement, many of the risks are being managed in one or more ways.

fallen ginkgo
# quick agate Did you read through the whole article, or did you just look at Vitalik's list o...

While I agree that i) is the least problem, ii) is much harder to fix than you propose.

You give examples for what you and the other authors of Gov 2 have already considered.

And don't get me wrong: I love Illuvium, the DAO and ILV Labs and appreciate all the effort that went into Gov 2.

But I am trained to look for risks and I will point them out.

And now just look at what happened to Aragon DAO:

he Aragon treasury was a clear target, and came under a 51% attack by coordinated RFV Raiders in the Aragon DAO. This group of actors has been complicit in breaking down many DAOs and their communities, including Invictus DAO, Fei Protocol, Rome DAO, and Temple DAO. It is worth noting that one member of the group has been jailed for his involvement in the Mango DAO exploit.

Most recently this group led the financial takeover of Rook DAO, attacking the organization with social engineering tactics and dissolving the DAO and liquidating half the treasury for their financial benefit

The attack on the Aragon DAO began on May 2, when there was a sudden and suspicious uptick in Aragon Discord server activity. Moderators observed signs that this activity was coordinated; an observation that was validated through further investigation. A review of Discord analytics determined:

The majority of individuals engaged in this activity had joined the server less than 45 days earlier (for context, the server has been in operation for over 5 years);
Over that time period, the group posted less than 1 message per day (0.8);
On May 2, the group posted 69 messages within hours.
Based on these observations, moderators took action to temporarily ban a small group of users who were engaging in harassment in the channel and contributor DMs. On Twitter, individuals associated with the Rook DAO takeover attempted to use the temporary ban to generate a movement against Aragon

Onchain data shows that, in the months leading up to this attack, Arca and the other RFV Raiders were actively stockpiling ANT. In the days following the attack, the Raiders began rapidly wrapping their tokens enabling them to reach a majority vote in the Aragon DAO. In the absence of clarity into the Aragon Association’s position, ANT could be misunderstood by token holders as being a financial instrument, ultimately taking funds away from the builders pursuing Aragon’s mission

blog.aragon.org/aragon-repurposes-dao-to-ensure-treasury-serves-its-mission/?utm_source=substack&utm_medium=email

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This is the same with bugs and exploits. You are so sure that your code is perfect and then comes this 1 hack you haven't thought about ...

quick agate
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Specifically, how would you see an attack parallel to the attack on Aragon DAO affecting Illuvium?

fallen ginkgo
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We seem to talk about two different things:

You talk about all the things already considered and that's good.

I talk about the black swan events.

But a white swan event would be someone buying candidates over months without us noticing and/or influencing the Discord community (see Aragon above) with trolls/AI bots to elect candidates that force the DAO to make decisions that are not in its and ILV Labs best interest.

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We might not even notice that these decisions are bad, because the Discord community as a whole starts to think like the social engineering attackers.

quick agate
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Sounds like a massive campaign. I'll acknowledge that it's a possibility, but I don't think it's particularly likely that a group is so influential that they can slowly mind control the majority of the DAO to act against their best interests.

fallen ginkgo
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Okay, I let my fears know and will continue to watch the decisions the DAO makes.

I personally would have liked more team members in the councils to avoid the issues above and add more community members as the DAO matures, but we will see how it works out.

quick agate
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I'll think on it more. It's always been a "back of my mind" concern that some group could get a majority elected (even less risk now that the IMC is composed of sub-council members, as you'd need to "own" 3 sub-councils to guarantee a majority in the IMC).

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I think the reputational social credit required to get elected is a factor - I'd be much more concerned if we started seeing many sub-councils composed of people who had never been seen in the community before.

fallen ginkgo
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Thanks Blickter. The risks in the next epoch are probably not that high anyway, but in the future when the value of our in-game economy grows, we might face issues.

fallen ginkgo
quick agate
fallen ginkgo
# quick agate I'll think on it more. It's always been a "back of my mind" concern that some gr...

GM Blickter. Another question about Gov 3 you might able to answer:

Have there been thoughts around land, Illuvial, Illuvitar etc. owners to be included in voting?

I could see a misalignment in interest in the future e.g. when ILV Stakers make decisions that negatively effect e.g. land owners (5% fuel sale ...).

I have also seen posts where ILV Stakers are referred to as investors and everyone else being gamers. But shouldn't owning valuable Illuvials or Illuvitars make me an investor, too?

I know you will say that ILV Stakers won't make decisions that are bad for ILV, but sometimes people don't think about all consequences ...

serene spindle
quick agate