[5.4.1] [Social] Funding Request: ENS Meta-Governance Working Group Term 5 (Q1/Q2)

🗳️ Meta-Governance MetaGov Discussion
1
Status Posted on Snapshot
Votes Vote Here
Author 5pence.eth

Abstract

The ENS Meta-Governance Working Group requests funding of the below to support operations until the September 2024 funding window.

The Meta-Governance Working Group is responsible for providing governance oversight and supporting the management and operation of working groups through DAO tooling and governance initiatives as well as treasury management for the DAO.

This social proposal is submitted to satisfy the requirements set out in Rule 10.1.1 of the Working Group Rules (EP 1.8) and further required by this snapshot proposal in Nov. 2023 modifying steward rules. If this proposal is passed, the funding request will be included in a collective executable proposal put forward by all three Working Groups.

Specification

This specification is the amount requested from the DAO treasury to the Metagov Multisig to fulfill anticipated budgetary needs through September 2024.

USDC ETH $ENS
ENS Meta-Gov Main Multisig 374k 0 105k

Description

Current Metagov Wallet Balances

(Values expected as of March 5th, 2024 - Use hyperlinked wallet names to see current balances)

Address ETH USDC $ENS
ens-metagov.pod.xyz 85.68* 362,463 15,540
ens-endowmentfees.pod.xyz 0 0 0

*This value includes 22.89 that the metagov safe loaned to the endowment fees payments that will be repaid to the metagov safe with executable that implements the new Endowment fees strategy

Expenditures

Meta-Gov sets aside funds to ensure coverage for mission-critical initiatives. While we strive to estimate term expenditures accurately, the final spending depends on pending initiatives. We anticipate that final expenditures will not surpass the expected expenses allocated for the term.

Expected Expenses through September 2024

USDC ETH $ENS
Steward + Secretary Compensation 294,000 -
Governance 50,000 5 105k
DAO Tooling 140,000 - -
Discretionary - 10 -
Total Balance 484,000 15 105k

Governance Distributions

Recipient Category Amount of $ENS Method
Contributors and Developers 60k Vesting contracts
Elected Stewards 45k Change to vesting contracts is planned for the 2025 guidance

Description of Initiatives/Pods

Steward + Secretary Compensation: Working Group Steward and Secretary compensation as required by revised steard working group rules and totaling $294,000 USDC.

Governance: Fee reimbursements and initiatives related to reducing friction in the governance process. This can also include $ENS distributed in order to lower barriers to the governance proposal process.

DAO Tooling: Developing interfaces and dashboards to improve the governance process and increase transparency across the DAO. An example of DAO tooling spend is our current engagement with Agora as they help build out an enhanced DAO proposal flow to streamline the proposal process.

Discretionary: Funds distributed at the discretion of stewards towards new initiatives + governance experiments. In this cycle, we’ve consolidated the former DAO Sponsorship category into this discretionary category.

Conclusion

This funding request will allow the ENS Meta-Governance Working Group to continue its essential work in providing governance oversight, supporting the management and operation of working groups, and ensuring effective treasury management for the DAO. The requested funds will enable us to maintain our ongoing initiatives and develop new tools to enhance the governance process. We are grateful for the community’s ongoing support and engagement, which is crucial to the success of the ENS DAO. The Meta-Governance Working Group remains committed to serving the ENS community and driving the long-term growth and sustainability of the ecosystem.

2 Likes
2

Hey Spencer, as always appreciate the coordination of yourself and the metagov group. Just wanted to highlight one key number within this post, the ENS token distribution.

Steward incentivisation is incredibly important and we want to ensure we have the highest value contributors to the project - Incentivising with a monthly USDC balance ($4k) is something we fully support, as well as getting ENS tokens in the hands of these stewards, however the current budget is proposing a huge number of ENS tokens distributed to stewards.

Denominating any incentive in strict token amounts rather than a USD amount always leaves a risk of token price having massive impact on these rewards (this applies for strict onchain incentives (liquidity incentives), let alone a contributor incentive).

With these current numbers, the 9 stewards receive a total of ~$2.3m dollars worth of incentives for 12 months, ~$250k each. (On top of the $48k in USDC incentives).

The proposal also outlines incentives for the next ~9 months - Our thoughts would be that this timeline is too long; is there any change in token price that would change this proposal? If the ENS token was to 10x in value, would we still be comfortable giving each steward $2.5m worth of ENS tokens? Again this highlights the issue with assigning incentives in strict token numbers.

Considering how much, time, DAO energy and due diligence just went into the ENS Service Provider Streams that distributed a similar amount of value - Assigning that same amount to 9 individuals rather than 9 whole teams feels like a misaligned incentive.

This reply aims to highlight possible next steps given this large allocation;

  1. Only assigning the first 6 months worth of steward incentives, with the remaining incentives to be discussed by the wider DAO (Distribute 5k ENS tokens to each steward, with the second half of the allocation to be thought through more purposefully) - Especially given that the term was increased from 6 months to 12 months in the last term.

  2. Adding vesting to these tokens to ensure longterm alignment. We’d suggest a 1 year linear vesting to these tokens post distribution.

  3. Reducing the allocation for the current (and future) terms based on DAO & steward discussion.

  4. Start denominating any ENS incentive amounts in USD as opposed to tokens.

I know this is a hard topic given it involves stewards discussing steward incentivisation, I will be joining the next metagov call to discuss further and happy to make this a more formalised proposal if that is required. But hoping there’s a way for this to be addressed without needing to be a contentious discussion, there’s no real precedent for how this could be updated, but with metagov & wider steward consent, updating this shouldn’t need to be a whole proposal. As mentioned above, having incentivised and aligned stewards is incredibly important to a successful DAO, however over incentivisation without proper consideration can easily lead to resentment from other DAO contributors and mis-aligned contribution to the project.

Interested to see any thoughts from delegates, stewards and Labs as always :purple_heart:

6 Likes
3

It goes without saying that no discretionary monetary value should be given by the stewards to themselves (or to the developers and/or contributors for that matter). A better solution might be that the DAO delegates (not transfers!) a larger number of tokens to stewards and contributors through a special contract. Instead of giving each 5,000 $ENS (which is meaningless voting power but significant monetary value), delegate to them 50,000 $ENS tokens in pure voting power instead. Isn’t the justification for this token allocation voting power in the end? If I was given 5,000 $ENS as steward/contributor/developer, it’s not really adding to my voting power but it is good money to buy a tiny condo on the beach. Those are some really misaligned incentives.

2 Likes
4

Regarding Steward ENS compensation. This is one, ironically in which we had very little input because of a proposal I passed last year that forbid Stewards on making comp decisions about themselves. The number 10k was decided by last year’s WG.

That doesn’t mean we cannot discuss this, ENS token holders are the ultimate interpreters of our own rules, but the metagov stewards aren’t the ones who can alter it. I would suggest a social vote if you feel strongly about it.

The 10k ENS number came from the fact that this is the minimum amount for posting a social vote on Snapshot. For reference to post an executable you need 100k votes and the quorum for executing is 1M votes, all of that is independent of token value.

In my personal opinion vesting is how we solve the dillema between ENS vote power and token value. I believe that the correct form to distribute tokens would be to give 10k tokens to people who have done great contributions (not only stewards), vested over a period of 4 years, with immediate delegate power. So you get the 10k vote right now, but can only actually sell in small quantities over the next years. This also helps align the long term interest of the voters with the long term health of the DAO.

10k doesn’t sound that much voting power but if we were to do that with say, 10-20 new people, then it would mean that as a block these people could outvote the largest ENS delegates.

I am currently testing Hedgey as a solution to make that happen and at Metagov we are looking at making this a standard for contributors and for the next term os stewards.

Should that apply that to the current stewards too? I am bound by my own social proposal and cannot do that, unless there is another social vote clarifying the issue.

3 Likes
5

:white_check_mark: This is a fair system.

This number 10k, the vesting period, steward-contributor ratio can easily be part of a social vote. Instead of stewards giving this money to themselves under discretion with arbitrary criteria, it is best to put it to vote. The result of this social vote should be formally adopted by the DAO.

@James offered to write this proposal?

3 Likes
6

As the current lead metagov steward, I feel it’s important to provide some additional context to ensure a fully informed discussion around the numbers James highlighted.

Firstly, the steward compensation and governance distribution numbers being discussed are the same figures used in the previous term. These numbers were originally set and used by last term’s Metagov stewards. They have been transparently outlined in multiple budgets and funding requests since then.

Secondly, the current working group rules intentionally stipulate that these values are set by the Metagov group for the upcoming term, not the current term. This serves two crucial purposes:

  1. It helps stewards avoid the ethical conflict of determining their own compensation.
  2. It provides clarity to potential stewards about the role and its compensation before they nominate themselves. This transparency is essential for attracting a diverse pool of qualified candidates.

While there may be room for discussing potential changes to the compensation structure or the process for future terms, it’s important to consider the impact of altering the advertised numbers after stewards have been elected based on those expectations.

That being said, I appreciate James raising these important points and fostering a thoughtful discussion. His feedback shows the importance of regularly reviewing the processes to ensure they align with our evolving goals and values. These are the types of discussions we want to continue to have openly as we craft the DAOs bylaws via the active engagement outlined in this other post regarding the crafting of the DAO bylaws.

7

This is only applicable if the DAO votes to implement a standard for just rotation of stewards with a limit on consecutive and total terms held as a steward by a person(s). Otherwise this can’t be enforced in the event of at least (1) steward voted in that has; not held the position of a steward or influenced compensation in ENS DAO previously .

8

Can you please elaborate on the impact? Based on these discussions, stewards will still get their 10,000 ENS and the immediate voting power that comes with it. The only likely change is the vesting period. Are there any stewards who are against vesting? Because that translates to them being primarily interested in the money and not the voting power.

But this is not what’s going on. Stewards are still determining their own salaries, and if anything those salaries have increased discretionally since the DAO came into effect. It’s the same set of people getting recycled in steward position; the same people who decided the number an year ago are at the receiving end of it. Your argument is theoretically sound but not very practical given the scenario.

P.S. I thought someone had been hired for this; perhaps no one anyone other than a lawyer is qualified to make meaningful comments on bylaws. Community discussion will only derail this work.

1 Like
9

Me. I am a steward that is 100% against changing the terms that were advertised to stewards before they nominated themselves for the role. I also haven’t traded any $ENS distributions for money. I believe that makes your supposition incorrect with respect to me being only interested in the money.

I am also the steward that initiated the conversations with Hedgey to find better approaches and viable vesting contracts that we can use for future distributions. (Thank you to Avsa for the continued testing of those contracts).

Most importantly, I am a steward that believes that it’s important to honor commitments that were made to people.

10

Can you point me to where this advertisement was made when steward nominations were sought? Since this distribution is dependent on an executable vote, it couldn’t possibly be guaranteed to the stewards in an advertisement.

Not really. It actually confuses me even more. If you are not concerned with selling, then vesting shouldn’t matter to you. Anyway, this is your personal choice. DAO rules cannot and should not depend on goodwill of individuals.

1 Like
11

If stewards propose compensation for a forthcoming term that you think is unreasonable, you can vote those stewards out, ensuring they don’t benefit from the new compensation. This is one of the checks-and-balances that ensures the system is fair.

12

So it seems that the DAO definitely has interest in distributing more tokens for voting power. Controversially, at the same time the price of the token in comparison to the influence of vote is so good that the issuance of tokens will likely just result in the tokens being sold for cash rather than used to vote.

I thought vesting was a good approach at first but since have changed my thought.

I say distribute and let individuals do what they want with the token. What a recipient does with the token is a personal choice and will reflect their vested interest to this organization. In my opinion, the recipients have already vested time and interest to a point of which they will be issued / rewarded tokens. So why would we impose further vesting on their contributions?

I don’t understand issuance of trust through the weight of influential vote and not at the same time be equally valued monetarily for the measurement of which issuance is decided. If that is the case, then the token is overpriced

13

I’m going to vote NO on this, its way too much compensation

Its starting to look like those US “non-profit” hospitals, which pay exorbitant salaries to their execs

also this

I already put a proposition forward to make steward institute more democratic and I’m not getting much traction

Lets start by making sure that there is genuinely diverse crowd of steward candidates from all over the place and they all have proper chances of winning, and only then putting piece of sugar in front of them

14

Alternative proposal is we vote to change compensation (or its structure (cc vesting)) and if they want to ragequit they can, then we can introduce new stewards as necessary.

1 Like
15

isn’t vesting for an actual job position just a deferred payment? essentially a guaranteed retroactive payment? Who will want to do a job to be paid far into the future? I guess that doesn’t matter much for candidates who have exuberant amounts of cash but for qualified candidates who don’t…well they won’t be applying in that case. Wouldn’t that just gatekeep the role for ‘the rich’ only?

16

Thank you, 5pence.eth, for preparing this funding request! I think it is important for stewards to receive just compensation for their dedication and loyalty in serving the DAO. With regards to the governance distribution, I primarily view the token as a voting utility. However, I also realize its dual purpose as a currency.

As avsa.eth mentioned, implementing a vesting contract for governance distribution is an optimal way to align steward incentives with DAO initiatives in the near to medium term. However, I tend to agree more with James.eth’s 1-year timeline rather than the 4-year one, ideally favoring a timeline somewhere in between. If an individual decided to cash out their tokens afterward, I wouldn’t hold it against them.

To reiterate and ensure an abundance of clarity, I am in favor of honoring the $ENS governance distribution as outlined by the preceding Meta-Governance Working Group — 10,000 $ENS per year, awarded biannually. The current Working Group will ensure that vesting contracts for governance distribution are implemented in 2025, according to the aforementioned funding request, and will incorporate community feedback as well.

17

That’s like taking a nuclear weapon to a water gun fight. Easier method is to object to the funding proposal and seek changes.

That is fair. 4 is probably too long, and 2 years is a good vesting period.

I am still unsure why the words ‘honour’ and ‘commitment’ are being thrown around. There are no ‘commitments’ that were advertised (which 5pence failed to provide as reference). The distribution is entirely a matter of Social + Executable vote, and there are no commitments outside of that.

What is weirder is that both you and 5pence seem to be very supportive of vesting from next term onwards and but not from this term. Why should the stewards after you be squeezed for monetary value but the current stewards be allowed an exception? I am yet to get an answer for this. I don’t get this ‘not me, but after me’ angle.

1 Like
18

I believe you might have just missed the references in the the thread above:

And this was covered here:

(adding a small edit - I’m doing my best to be as responsive as possible to you @NameSys, but let’s try to make sure we keep this a mature discussion about policy and not use reactive ad hominem comments.)

19

That is a recommendation co-authored by you and it is not an accepted proposal. The recommendation itself says:

My guess upon reading this would be that this recommendation will be formalised somehow (via the current social proposal for funding). It also explicitly states that these numbers are a guide for nominees, while suggesting that this distribution is up for reconsideration after two months when the term expires (which makes sense). To me, the language does not suggest that these numbers are a commitment beyond the two month period at that time, and beyond that, it is a recommendation pending approval/vote.

On a side note, if the stewards have earned this monetary value, then they shouldn’t mind having a vote on this. It will once and for all settle this issue and everyone can rest in peace. Such a proposal will also remove this bug ↓

Instead of stewards deciding salaries at all (whether for themselves or the next iteration), let a vote formalise and settle it.

:handshake: My primary concern is simply that this distribution is too lopsided toward monetary value and too little toward voting value, and I am sensing avoidance in correcting this. By the way, as one of the more active developers in the community, we will likely also receive an equal amount of ENS tokens as a steward (which is also wrong because we are teams not single individuals). So my own proposal for vesting hurts me more than anyone else since we are running on fumes ($10,000) since September 2023. That’s ethics from my side. I’ll do the right thing even if it means rekting myself. If I fail, I guess I’ll take the monetary value :person_shrugging:

1 Like
20

Another talking point to be discussed is the method of how each recipient is chosen. Is it fair that people should just expect to receive voting weight or should each person(s) who believe they should be a recipient self-submit a review of their contributions publicly?

Also I believe that the compensation table is incorrect according to the math how I see it figured.

How is it that you approach evaluating to compensate or reward individuals who are very outspoken on the forum, active in discussion (wheter you agree with them or not) and or providing the DAO and the community with development progress? There are only handful of people that are perpetually providing input to conversation. If some of thiose individuals were to stop engaging, there would seem to be no conversation. Also to mention, those individuals have a measurable contribution via discussion, tangibles, proposals, invoke talking points that spark DAO proposals, etc. while some who are voted in as a steward have little to alnost zero input on topics for months even. Really, I’m curious to know where the separation exists between being graciously paid $300,000 and nothing except a "thanks for your participation:? This applies across the board and not just to meta-gov WG. It’s also important to be sure that people are just compensated for their contributions and not if who and who are friends or not, or whatever voice you give to certain people when you read their posts… friendship is irrelevant Work hard, play hard. bidness comes first. just my 2c

Does vesting incentivize to not rotate as a steward?