Temperature Check: Should Hop Governance Fund Bounties On Successful Proposals?

Should Hop Governance Fund Bounties On Successful Proposals?

This is a request for comment, in line with current Hop governance processes, and is intended to provide a place for comment and feedback to be incorporated before requesting a sponsor to move it to a temperature check as a HIP (GFX Labs is around 50,000 HOP shy of the 1m threshold for being able to create a proposal).

Motivation
Hop’s protocol is new and governance is newer, and there are a number of areas that will require ongoing work or proposals. Additionally, Hop needs to provide avenues for community participation beyond those serving as delegates (though this proposal is intended to include delegates as well).

Spirit of the Proposal
Utilize a fixed monthly allocation of HOP to incentivize successful concrete, outcome-producing governance proposals.

Allocation
This initiative would allocate 16,000 HOP to the community multi-sig.

At the end of each calendar month, the community multi-sig will distribute HOP to the authors of successful proposals that are eligible for a distribution. Hop governance will also distribute an equal amount of Hop back to the community multi-sig at the end of each calendar month, to replenish any HOP that has been distributed for this program. At no time should there be more than 16,000 HOP in the community multi-sig for this program.

Eligible Proposals
All proposals that succeed upon a formal on-chain vote will be eligible unless otherwise excluded below.

Ineligible Proposals
Proposals requesting budgets, grants, or Hop governance to engage with a vendor are excluded from this program.

Proposals making de minimis amendments to previous proposals (e.g. fixing only typos) are excluded from this program.

Proposals that have no direct, actionable outcome (e.g. establishing a mission statement) are excluded from this program.

Eligible Recipients
The original author of a proposal on the Hop Forum will be the recipient, regardless of who initiates a Snapshot or on-chain vote. This is so that small holder community members can benefit, and large holders do not capture the rewards for others’ proposals.

If there are multiple authors, they should communicate clearly to the community multi-sig signers how any distribution would be managed.

Incentive Amounts
This program will award a maximum of 3,200 HOP per proposal. In the event disbursements would total more than the 16,000 HOP available for a month, then each eligible proposal is allocated an equal amount of HOP from the 16,000 available.

Administration
The community multi-sig will disburse incentives no later than the first Friday following the end of a month.

Governance will schedule to replenish any HOP disbursed prior to the next scheduled disbursement.

Authors of successful proposals are ultimately responsible for communicating to the community multi-sig where to send their HOP tokens. While the address may be communicated privately, recipients should note that any HOP distribution will be public on the blockchain.

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If no one has further feedback in the next 48 hours, GFX would like to move this to a temperature check as outlined in the HOP governance processes.

Note that GFX is a bit short of the 1 million HOP that will be required to submit a formal proposal, and would appreciate further delegation to get us over the mark or the assistance of one of the addresses that has 1 million HOP.

What is the calculus behind the 3,200 HOP per proposal and 16,000 HOP per month quantums?

What is the criteria for ‘successful concrete, outcome-producing governance proposals’? Is it just be eligible and don’t be ineligible further to your text? If so, is your text modeled after any other community proposal incentive programs? Just want to flesh this out and ensure absolute certainty so we can (try) to avoid flooding the forums will low-effort posts.

Should we include delegate/multisig-operator incentives as part of this proposal or address those separately? Does the available HOP for bounty disbursement intersect with what may be available for delegates / multi-sig?

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Fairly arbitrary. Whether that’s appropriate will largely depend upon price of HOP. Open to alternative suggestions that do not eat up governance or msig signer bandwidth.

Yes. We mostly wanted to exclude low-effort proposals or ones that already asking for funds. Feel free to suggest further exclusions.

It was modeled on a similar program at MakerDAO. Note that it is also new there, and has not yet (to our knowledge) paid out any bounties in its first two months.

Delegate and msig incentives seem more important and less experimental than this proposal. These bounties are more “governance mining” or “participation mining,” while delegates and msig signers are pretty important to the security of the protocol. GFX would be happy to collaborate with you or anyone else who wants to begin drafting that!

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As both a delegate and multisig operator, I feel I should take a back seat to those discussions.

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For clarity, who is the community multsig made up of and would these signers be (in)eligible for this bounty program?

Additionally, what will be the process/criteria to determine how much of the max. 3200 HOP shall be awarded?

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No one would currently be excluded by their position, only by the nature of their request. They could always decline, though. As to who is on that, great question. There should probably be a list somewhere, but GFX is not on it and does not know everyone on it at the moment.

Maximum would be the default. In the event there were more eligible proposals than funds, each would receive an equal share of the monthly maximum allocation (currently 16,000 HOP). Honestly, it seems unlikely the full amount would be used.

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The Snapshot for this temperature check has been posted here. It will conclude on Aug 27, 2022.

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I like the spirit of the proposal to reward proposal creation + participation. However, the proposal does not really seem to be thought through to go to the vote as it has.

Simple TWAP of HOP worth $1000 USD would be much more reasonable IMO. Basically in bear market, there are pennies on the dollar for people drafting the proposals and in bull market, everybody is incentivized to write up proposals like crazy…

Has anyone contacted community multi-sig signers who should manage all of this? Think they should be at the table as well…

Since this may directly affect the amount of proposals, maybe it would be good to involve people responsible for their execution into the debate. @cwhinfrey what do you think?

It would seem that if we want incentivize proposal creation, also reasonable feedback & suggestions that make it into the proposal should be also rewarded.

As the proposal stands, there is only incentive for proposal creation and not for it’s review. Think that is something that is really missing in governance space in general. This is rampant in many DAOs, there is not really any structured review process of proposals since there are no incetives for anyone to actually review the proposal, which would seem even more important than creating one, there is usually much more to gain for the creator, than for the reviewer and this proposal only exasperates it.

I would like to see either multisig-operators to reward both proposal creators + commentators based on their best judgement, or appoint a person from pool of people for every proposal to review + offer suggestion.

Moreover, for high quality proposals there should be much bigger rewards, since they take a long time to research + put together, otherwise we just end up with many half-baked low quality ones…

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Thanks for the detailed feedback! There’s some good stuff here.

Not directly, but one of the only two people during RFC to comment is on the multi-sig. We fully agree they should be consulted. Much of the proposal is structured to be simple to administer, and make as light a burden on the multi-sig signers as possible.

True. However, our experience with TWAPs is that someone has to do that counting, and then do it in a way that’s very transparent and easy for others to verify. Also, given the very low liquidity of HOP (price impact begins at 1000 USDC > HOP on 1inch at the moment), TWAP may not be appropriate given the ease with which it could be manipulated.

Review should at a minimum occur when delegates and large HOP holders decide to vote. Hop governance is not currently drowning in proposals, but should the pendulum swing towards an overactive governance, then certainly this program should be revisited. We would prefer to address that problem when/if it presents itself. Realistically, this program only applies to proposals that do not request funds from the protocol, so it should hopefully target more “nuts and bolts” types of proposals like the one @francom is beginning to work on here.

If this proposal fails, perhaps a sunsetting date could be attached to force a re-evaluation. It could also be amended (should it pass) to insert such a clause if this was a common concern.

100% agree. The question is how do you distinguish between the two without a centralizing group or devolving into informal “I know it when I see it” situations. If you have an idea how to do this simply, we would happily collaborate to revise this proposal (if it fails) or amend it (if it passes).

Thank you again for the detailed comments. You brought up some really great points! Given your keen eye for detail, we also would be interested in your input on some upcoming proposals if you feel you have the time (DM or find us on Discord if so, just so this thread doesn’t get off track).

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This temperature check has ended, and passed. Thank you to everyone who participated.

GFX Labs will begin looking for someone with enough HOP to get this proposal (HIP 3) and HIPs 0, 1, and 2 on chain for a formal vote in the near future.

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