The MetaGovernance Working Group holds weekly calls. The calls are open to community members and the general public.
The MetaGovernance Working Group calls are led by the lead steward of the working group. The lead steward for Q1/Q2 2023 is @katherinewu.
Details for the call are the same from week to week. If there is a change to a scheduled call, a comment will be posted in this thread to give notice.
If you have items that you would like to add to the weekly agenda please message any of the MetaGovernance stewards (@katherinewu, @simona_pop, or @nick.eth) through the messaging feature on this forum.
Agenda + Minutes
January 10, 2023 – Agenda | Minutes
January 17, 2023 – Agenda | Minutes
January 24, 2023 – Agenda | Minutes
January 31, 2023 - Agenda and Minutes
February 7, 2023 — Agenda | Minutes
February 14, 2023 — Agenda | Minutes
February 21, 2023 — Agenda | Minutes
February 28, 2023 — Agenda | Minutes
March 7, 2023 — Agenda | Minutes
March 14, 2023 — Agenda | Minutes
March 21, 2023 — Agenda | Minutes
March 28, 2023 — Agenda | Minutes
– Comments on this thread are restrictred to Stewards. If you would like to discuss a MetaGov topic, please create a new post under #meta-governance:metagov-discussion.
A) MetaGov Working Group Funding Request
For this term, the MetaGov working group is requesting 364,000 USDC, 125 ETH, and 3,500 $ENS from the ENS DAO for Q1/Q2 2023.
Q: (Katherine) My first concern here is over the speed of deployment and performance fee. Namely, Karpatkey is proposing to move 100% of the endowment over a three-month period and deploy that all at once.That’s aggressive and not enough time to measure performance. Can we extend the deployment time to, say, 12 months?
A: (elbagococina) The original proposal was for six installments, but after consideration we changed it to three installments.
A: (Nick) My concern was the overhead required for so many DAO votes.
A: (Santi) We want to deploy funds to start earning yield as soon as possible. We are not against a different approach and we can align the proposal to the community’s opinion. In our opinion it is better to start getting yield right away. The funds will always remain under custody of the DAO, and will be deployed in risk-averse strategies. If the community feels differently, we can do every two months instead. This is open to discussion.
Q: (Katherine) I have some additional concerns over the strategy that is being proposed- for example, I’m worried about the lack of hedge for the Stakewise strategy. There was an infamous stEth deg last year, which to me shows that stETH isnt as stable as it seems. What happens if stETH de-pegs again? Any hedge for situations like that?
A: (elbagococina) We can act fast with our tools. We have daily alerts and a tech team that monitors prices in real time. We have a lot of tools we can use to react, including bots and alerts.
Q: (Marcus) Is there a contingency plan?
A: Yes, and we can share it after execution. You can check the actions we have taken in the past.
(Katherine) It would be helpful to have a section to communicate the contingency plan now, rather than later.
Q: (Katherine) Regarding the performance fee- the proposal is for 10% of the yield obtained in the previous week, per week. I would to see better ways to structure your performance fee- for comparion, low risk index funds in the tradfi world charges 0%, or other hedge funds have a benchmark. How do you feel about adjusting the language to indicate it is more performance-based?
A: (Nick) This is intended to be a low-risk fund. We don’t want to use language that may encourage taking higher risks in order to collect a higher performance fee.
A: (Santi) We are market agnostic. We are only trying to get yield on top of the supplied assets. If the market goes down, the endowment will be at a loss, regardless of what we do. In the winning proposal, we suggested the fees as part of the proposal. In the end, Karpatkey won according to the proposed fee structure. 10% per week means 10% of the obtained yield, no matter how often it is collected.
A: (elbagococino) We adopted a different fee structure for each DAO. We designed a fee structure specifically for this type of work for ENS DAO.
Q: (Katherine) What is the cadence of financial reporting? I think monthly would make sense, along with taking performance fee on that monthly basis based on P&L for the month.
A: It was originally proposed as a weekly report. Maybe it makes more sense to do it monthly. This is open to discussion with the community.
Q: In the forum comments under the Karpatkey there was a lot of discussion around the USDC conversion-- naming, how Karpatney plans to ‘time’ the market. Have you though about more creative strategies such as putting ETH into Compound, why can’t we just take USDC from that?
A: (Sebastien) That was not a strategy of Karpatkey/Steakhouse. It was a strategy put forward by ENS.
A: (Santi) The DAO’s exposure to ETH is around 95%. That is too high. What happens if we sell ETH too early? I think the DAO can live with that problem. But what happens if we sell too slowly and the price goes down? Selling too late could be a mistake that might kill the DAO. We can’t predict the price, and we can’t afford to make a mistake. We need ENS DAO to survive for 20 or 50 years. We need to reduce ETH dependence to the greatest possible extent. It is important to make clear that the endowment goal is to take risk-averse strategies and to obtain enough yield to sustain the DAO in the long-term.
A: (elbagococina) The objective of the treasury is to support the DAO. If we hold ETH, it is too risky, so we are going to find the best way to convert the ETH.
A: (Santi) We are not inflexible and we can adapt to what the DAO decides.
Q: (Accessor) When do you think is the most appropriate time to sell ETH as outlined in the proposal?
A: (Santi) The moment we receive ETH, we can sell it. Our original idea was to sell it over the period of one week. We do not want to try to time the market for best price.
Q: (Coltron) If the proposal to sell ETH for USDC were to pass, would that effect the endowment?
A: (Nick) That would function separately from the endowment.
D) Reserved for Open Discussion
Q: (Daylon) Has there been any discussion around accepting stablecoins for registration?
A: (Nick) It is doable, but the high gas cost of accepting ERC-20 payments has turned us off from implementing it thus far.
ENS Delegation for OP + Multisig creation
OP Gnosis multisig is created with the following address Safe - Safe
The current signer is 1/2 of matoken.eth and secretary.coltron.eth to keep it lightweight, but other Meta gov stewards can be added if more signers are required.
A) MetaGov Working Group Funding Request (Question, Comments, etc)
Social vote has passed, and will now go on to an executable vote to fund all three working groups. Should go live on Tally in the next 24 hours.
Here is what the executable proposal will look like:
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B) Proposal to sell 10k ETH
Separate initiative from the endowment. This is the proposal to swap ETH for USDC to ensure funding for the next 24 months.
Nick tested the Cowswap protocol option using Milkman. Went through just fine and did not require any intervention and would be comfortable with this as an option to swap.
As a note, discussions have been favorable for a DCA option but due to complexity + security (ie the MG stewards having custody of 10k ETH), swapping all at once is best option at the moment.
If the proposal goes live today, there will be 7 days to vote, followed by 2 days to execute.
This is a separate topic, funds, and part of treasury from the Sell 10K ETH proposal. As we all know this has been a big topic with lots of robust discussions.
Katherine: One of the things I want to continue to flag (as I gathered from the forum post discussion here: Endowment initiation - #27 by nick.eth) are the concerns over deployment pace and risk management.
Elbago:
We are hiring a dedicated team for the endowment. I shared some contacts in the telegram group.
We have a risk management team, tech team, and are hiring more full-time people.
We need to know to deployment timeline because we are creating a team.
Santinomics (Re: deployment pace):
Delaying the decision by the proposed amount of time, we don’t see how it will improve the results. There may be a misconception about the way it works. The endowment is solely owned by the DAO. We are never touching those funds. It is a very simple and risk-averse strategy. The funds are in the control of the DAO at all times and can be withdrawn at any time.
Katherine:
One thing I can see in favor of a longer strategy would be in consideration of the need to activate a contingency plan should something go wrong, for example, a de-peg. My read is that people might feel uncomfortable because we don’t have a contingency management section outlining that plan.
James:
What is your opinion of doing the 6-month timeline?
Elbago
We can discuss that and we can adapt, but we need to know what the plan is.
Santi
We are thinking long-term, so in the end it won’t change a lot. There is an opportunity cost for the DAO if we don’t get started.
[Long discussion over performance fee, namely, delegates having an issue with taking a weekly performance fee (as opposed to a month), or that Karpatney’s performance fee style is not proportionate with the passive management style]
Nick:
Proposed to possibly hold performance fee for a 6-month trial period, after which time the full fee would be back paid.
Katherine:
I want to see the proposal be in the best condition to pass. We can only talk so much before we need to just make it happen, but a lot of what I would consider a well-formed and good proposal is still missing. Would like to see a revised version/ draft for an executable proposal.
A) General DAO update
The executable budget vote was passed on Tally. There will be a two day timelock and then the proposal will be executed and funds will be transferred on chain.
B) Proposal to sell 10k ETH (Updates on result)
This proposal vote also passed on Tally and is now queued to be executed. Thank you to all that voted.
We collected all of the questions and tried to answer them in one file. We are open to answering more questions if there are any.
Next steps from Karpatkey:
Next step is to create an executable proposal.
Started to draft the executable proposal and shared with stewards for first review.
Fees will be accrued once the service is provided.
Q+A
Katherine:
I still wanted to clarify something from the performance fee. Where does the 10% performance fee that Karpatkey is taking coming from? I do not understand how performance fees come from unrealized gains.
Nick:
It’s like interest in a savings account. You don’t have to withdraw it to know your realized interest.
Like a dividend fee?
Katherine:
So, taking the 10% of the top of any LP fees.
Santinomics:
Yes.
We will ask for a 50% tranch to kick off endowment. Next tranch will be asked for after six months. We believe this will be the most reasonable tradeoff after our discussion.
We are planning to post the executable proposal later today.
D) Reserved for Open Discussion
CoW Swap was recently exploited. Will this effect our proposal to sell ETH for USDC?
Nick:
I have reviewed the issue personally and there is no need to worry. The exploit will not effect any users of the platform.
We are waiting for the community to align/provide feedback, and we will take it to an on-chain vote.
We made changes to the proposal based on feedback we have received. We are hoping to take it to an on-chain vote shortly. We are ready to move forward!
Prior to on-chain voting, we need to transfer ownership to the ENS DAO. This can be done easily with one transaction.
Nick is planning to conduct an audit today. Hopefully should take one day, assuming there are no significant issues. Once this is done, the proposal is ready to go to a vote.
basics.ensdao.org - A new, consolidated resource for ENS information. Feedback is welcomed.
B) Endowment Update (Karpatkey)
Nick has been auditing endowment multisig and zodiac modifiers and has been successful in about 95% of tests. There is one contract that is not represented correctly in the current UI. Found a couple of minor issues, mostly UI. Nothing concerning. All allowances were audited via revoke.cash.
All that is left after the audit is complete it to transfer ownership of the safe to the DAO.
C) Reserved for Open Discussion
We would like to see a refinement of the proposal process. If anyone is interested in working on that, constructive efforts could qualify for grant funding to support the development.
Reporting cadence?
Monthly reports, plan is to make an initial post on the forum and provide subsequent comments for updates. Initial report will be a PDF. We are working on live dashboard.
A) General DAO update [new metagov meeting time!!]
Metagov meeting time has changed to 11 AM ET (4PM UTC).
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B) Treasury Management
Monthly performance report
Santinomics:
After analysing internal structure, we intend to provide weekly reports until we migrate to a live dashboard. However, once per month we will provide a post on the forum with more infomation.
Reports will cover metrics, APR, farming funds, information of interest, endowment highlights, etc.
First report should be available very soon.
Observation/ thoughts after this weekend re: emergencies/ risks
Karparkey closely monitored the USDC situation. Recommendation was to do nothing, but had an emergency plan in place should we need to act.
Part of the endowment strategy is to swap earned ETH to stablecoins. Started last week but have decided to take slowly.
So far have conducted one swap - 1000 ETH to USDC and deposited to Compound.
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C) DAO Tooling
Automation of DAO voting processes
Further discussion needs to take place.
What are the things we are trying to solve? What are we trying to automate? Is this something we should start working on now, or can it wait? Will return to this topic next week.
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D) Reserved for Open Discussion
Re: refunding delegation and voting costs
ethback.xyz is a tool that allows for refunding vote and delegation fees on chain.