Request for Comment - Governance Improvement Grants

[mgg]

Hey all – pitching in my 2 cents here as a Community Grantor

@RoboMcGobo presents a critical series of questions that we have been thinking about as we gather community insights. Personally, I think that all of the responses are extremely valuable and should be considered with equal weighting from each commenter.

With the advent of v4, I echo the importance of a smooth transition of sound governance procedures that enhance transparency and decentralization. I think there are some golden nuggets in this thread on achieving such goals! The DGPs most recent batch addresses some of this: October '23 Update and I encourage everyone to take a look.

The comments I have quoted below stuck out to me as the most present, and we would like to gather more information on them and encourage more feedback.

@luisqa

Structured and automated delegation programs to lower VP concentration and risk to the chain. We are already seeing concentrated voting power on some validators (with one already have 26% VP). Stargaze has something that I believe is quite good here is the final delegation dashboard: https://smartdelegation.app/public/45d6488a-ffe6-427a-94e3-19079be867f1

@swmartin19

• Design and implement a delegate program framework, sourced via a community submission process open to anyone, and vote to determine the best one (there may need to be a bounty provided to source the highest quality submissions). Ideally, the delegate program has a mechanism in place to reward the most active delegates who add value with more voting power over time, but with an upper bound set to alleviate the risk of voting power concentration. As the original post notes, the way delegates and validators are related to each other will need to be addressed in the submission (e.g. most validators/traders will have immense stake in the protocol upgrades, for example, determining trading fees. These interests may conflict with the interest of the DAO, and as such, all stakeholders need to be carefully considered). Other criteria will need to be defined prior to opening submissions as well.

@Immutablelawyer

An initial RFP could involve a thorough report evaluating token-holder behavior in Version 3 and comparing this with token-holder/validator behavior within Cosmos. Understanding these dynamics is foundational for addressing the identified issues.

Some thoughts:

• I love the idea of implementing a community centric delegate program - and one that reduces risks associated with voting power concentration. I think it is also good to keep in mind that things are very early in v4, and that this concentration and its negatives are a type of growing pains that will progressively fall away with time. Either way, for true decentralization, we will need a framework for ensuring/managing it.

Some questions:

• A clear question has presented itself here: how do we incentive align these initiatives without sacrificing quality contributors? I think the solution proposed by @swmartin19 is a great start, but i’d be curious to gauge the community on how this could be improved to create a proper rewards system? Perhaps a sort of retroactive mechanism could be useful here to base this more on merits.

Thanks