[DRC]: Parameter Change - Reduce minimum proposal deposit amount and Increase maximum deposit period

Summary

The current deposit amount of 10,000 DYDX prohibits valuable governance activity from small holders or those with most of their DYDX staked. We at Chorus One propose lowering the requirement to 2,000 DYDX, a 5x decrease.

Separately, the dYdX community could also consider extending the minimum deposit period from 2 days to 7 days. The current maximum deposit period of 2 days could be too short for community members to meet the minimum requirement.

Objectives

The objectives of this proposal are to:

  • Incite community members with less capital to participate and engage in governance on-chain.
  • Recently, dYdX made it very simple to propose adding new markets: by reducing the minimum amount, we expect community members to propose new markets.
  • Accelerate dYdX development and growth.
  • Give more time to dYdX community members to meet the minimum deposit requirement without putting their capital at risk.

Background

The current deposit is 10,000 DYDX, which represents around $28,000 today. This amount could be a bit large for community members, making it hard to participate in on-chain governance activity. Additionally, this poses an issue for large DYDX holders who do not have enough DYDX liquid because they are staking, thus requiring them to acquire more capital to meet the minimum requirement.

In addition to that, the current maximum deposit period on the dYdX chain is 2 days. We propose increasing that period from 2 to 7 days to give more time to community members who want to be more active in on-chain governance on dYdX to propose a proposal. Two days could be a bit short, as some community members who want to post a proposal on-chain can also work with others to meet the minimum requirement, and sometimes this can take some time. Increasing the max deposit period gives more flexibility to proposers.

Proposer

Chorus One, we are a Validator on the dYdX Chain.

Proposed Parameter Change

  • Change the minimum proposal deposit requirement from 10,000 DYDX (around $28,000) to 2,000 DYDX (around $5,600).
  • Increase the deposit period from 2 days to 7 days.

Note: If we notice that this amount is still a bit too large for the community to be involved in on-chain governance, we are willing to post another proposal to reduce the minimum deposit even more.

Risks

Reduce minimum deposit amount: This change makes it easier to submit spam proposals. While this is true, we believe that this is a trade-off to accept in order to promote more community-driven initiatives to grow dYdX.

Note: We would also like to advise community members to carefully read governance proposals as the risk of spam might increase: do not click on links if you think a proposal is spam. Validators would also be active and vote NO WITH VETO in order to reduce spam from happening.

Increase maximum deposit period: The risk is simply that as the proposer will have more time to meet the minimum requirement, it can sometimes take a bit longer to see a proposal on-chain. However, 7 days is simply the maximum limit to meet the requirement, and any proposers can meet that requirement before 7 days, which won’t change the way governance works.

Next Steps

Absent strong dissent, the dYdX community could move forward with an on-chain vote as early as Monday (Feb 12, 2024).

Governance Votes

The following items summarize the voting options and what they mean for this proposal.

YES : You approve the parameter change proposal to decrease the governance proposal deposit requirements from 10,000 to 2,000 DYDX and increase the deposit period from 2-7 days.

NO : You disapprove of the parameter changes in its current form (please indicate in the forum the reason why).

ABSTAIN : You are impartial to the outcome of the proposal.

11 Likes

Strongly supportive of this proposal!

At $5,600 (2,000 DYDX), the dYdX Chain’s proposal deposit cost is still among the highest in the Cosmos ecosystem, and should serve as an adequate deterrent for parties that may want to submit malicious governance proposals.

However, it also brings the governance process within reach for a larger number of users. Hopefully this will help increase the rate at which we see new market listing proposals and will foster more governance participation and a larger marketplace for ideas on the dYdX chain overall.

2 Likes

String support from StableLab here. We have most dydx staked in our validator and would still love to help move essential proposals forward.

We can’t always rely on the help of friends like Wintermute.

The proposal deposit is still 5,000 USD worth ao it should suffice to help stave off spam.

We would also support it without the added deposit duration increase.

Governance needs to be accessible. And as pointed out above even 2,000 dydx place this protocol near the top in the Cosmos ecosystem.

1 Like

I support lowering the minimum deposit requirement from 10,000 DYDX to 2,000 DYDX.

At present, the high deposit cost prevents anyone from submitting initiative proposals.

To achieve the goal of listing 500 pairs within this year, we need to simplify the listing process.

Additionally, if a pair lacks trading volume, we should be able to delist it based on community feedback.

1 Like

Thank you, @Kam & Chorus. We are thrilled to watch the community develop the governance.
In some cases, greater flexibility of proposal may result in lower quality asset proposals and significant compliance risks that are not worthwhile.

The community and voters shall keep an eye out and be prepared to vote down any unworthy new initiatives.

2 Likes

Fully support this proposal - the proposed deposit amount would make governance much more accessible to the community, especially with the launch of the new market listing tool to create these proposals.

1 Like

We are supportive of the reduction in the proposal threshold to 2k DYDX and the increase in the minimum deposit period. It makes a lot of sense and we look forward to hopefully seeing an uptick in proposer diversity!

2 Likes

Thanks @Kam and Chorus One team.

We are in support of the proposal that makes governance more accessible to improvements of the dYdX chain.

1 Like

A $6k deposit is more in line with other Cosmos-based chains (where they are often lower already in terms of dollar values).

Extending the voting period from 2 to 7 days is a no-brainer. 2 days is so insanely short, which is also a heavy burden on validators. 5 days seems like a sweetspot on a lot of chains, which enables relatively quick voting but still enough time to actually cast the vote.

Is there already a method to easily do collective-deposits from a community point of view?

1 Like

Thank you, @Kam for initiating this important discussion.

Since we recently went through the process ourselves we just wanted to reiterate four additional parameters for governance proposals beyond the minimum deposit (min_deposit) and maximum deposit period (max_deposit_period) which in our opinion are important to this discussion, these are:

  • min_initial_deposit_ratio: 0.2
    This defines the minimum amount of DYDX tokens required to create the proposal on the chain and initiate the deposit period. During the deposit period, token holders can add to the initial deposit until the necessary amount is reached for the proposal to enter the voting phase.

Currently, 0.2*1000 DYDX = 2000 DYDX is needed to initiate the deposit period

  • And the three burn parameters:
  1. burn_proposal_deposit_prevote: false
    This determines if the initial deposit should be burned in the case that the min_deposit amount is not reached within the deposit period. Currently, this is not the case as it is set to false.

  2. burn_vote_quorum: false
    This determines if the deposit should be burned in the case that the quorum* during the voting period is not reached. Currently, this is not the case as it is set to false.

  3. burn_vote_veto: true
    This determines if the deposit should be burned if the vote is vetoed**.

Summing up what we wanted to underline is that token holders with 20% of the minimum deposit can launch proposals and initiate the deposit period and depositors only risk losing their deposit if the vote is vetoed, meaning that 33,34% very strongly disagree with the proposal.

The current quorum is set to 33.34%

When voting token holders and validators can choose between:

  1. Yes - accept the proposal
  2. No - do not accept the proposal
  3. No-Veto - strongly disagree with the proposal
  4. Abstain - impartial on the outcome of the proposal

The dYdX Ops subDAO

2 Likes

Really love this proposal as it makes governance that much more inclusive and accessible to more people, which is also kind of the whole point of crypto!

Stakecito will be voting in support of this prop.

We are overall supportive of this proposition to lower the barrier. Assuming that the current value of 10K dYdX liquid tokens is approximating 30,000$ as of today, this was indeed quite restrictive. Moving it down to more manageable levels around 6,000$ seems like a reasonable outcome.

For context, we are currently ahead of proposing a minDeposit raise in the Cosmos Hub from 250 Atoms to 500. This would roughly mean a 2,500$ up to 5,000$. The reason behind that raise is to attempt a first step to tackle the problem the Hub is facing regarding spam proposals which account for more than 30% of the latest 50 proposals.

We certainly don’t want that to happen in dYdX as this chain also carries a lot more governance risk regarding its much shorter on-chain voting period.
Nevertheless, our final decision regarding the vote is a warm YES, but we also advise to monitor carefully during the next few weeks. If any unwanted governance usage were to happen after that decrease, we may want to reconsider.

pro-delegators-sign

1 Like