How Snapshot Governance of TrueFi Will Work

Governance Meta
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Introduction

Starting today, we will be moving votes over to Snapshot. This is in advance of adopting fully on-chain governance before the next unlock (optimistically, this will go live in mid-late January).

Goals with this post, the prior post, and of governance generally:

  • Make the governance process legible and transparent, not necessarily rigid and inflexible. We expect governance will grow and evolve as TrueFi does.
  • Be nimble (still able to move fast), but also responsible to make sure that governance is doing best by all stakeholders (lenders, borrowers, stakers)

The Steps of Governance:

  1. TrueFi’s primary communication medium is Discord. Nothing on Discord is formal and Discord is a good place to suggest ideas and have informal discussions with community members around proposals related to improving TrueFi. Throw an idea out there and see what kind of feedback you get.
  2. A more formal and better medium for long-form discussion is the forum, specifically the Ideas channel. Once you’ve gathered some preliminary feedback on an idea (Discord, private conversations, Ideas channel) you can move to making a formal proposal.
  3. The proposals channel of the forum is where formal TrueFi Improvement Proposals (“TIPs”) for upgrades and changes to TrueFi and TrueFi governance will be proposed. It will follow a (to-be-finalized) template and should include a poll in the post so that people who don’t want to leave a comment can leave a vote and give indicative feedback of sentiment.
  4. Once something has been discussed on the forum and you believe you have a good understanding of sentiment and the parameters of the vote, it should move to Snapshot.
  5. As of writing this (today, December 18, 2020) we don’t have governance established beyond Snapshot. In the coming weeks, we will move to formal, binding, on-chain governance (along the lines of Compound), but for the time being will rely on Snapshot to be the final arbiter, as many other projects do.

Once a vote on Snapshot is concluded (again, for the time being), the TrustToken, Inc. engineering team will implement the upgrades or changes.

Details:

  • The timespan between a forum post and a Snapshot vote should be >= 3 days. We want forum members to have time to be able to leave comments and understand the proposal
  • The length of a Snapshot vote should be greater than or equal to 72 hours (3 days), but less than or equal to 168 hours (7 days). This gives ample time for votes to be gathered without allowing it to drag on endlessly
  • Snapshot votes require a quorum of 15% of circulating supply (excluding company unlocked tokens, which will also be excluded from voting). The quorum will be calculated by taking the circulating supply from Coingecko / our API and excluding the unlocked tokens held by the company. So, as an example, if the circulating supply is 129,527,253 then quorum would be 11,274,955, calculated as:
    • (129,527,253 - 54,360,886)*.15 = 11,274,955
  • Snapshot votes are executed if a majority (50%+1) votes in favor
  • When we move fully on-chain governance and enable token delegation, we will also enact a proposal threshold, but for now, we’ll set an arbitrary proposal threshold of 100,000 TRU
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Upon further reflection, the quorum % has been updated to 15% as (in the current model where TRU staked on loans can’t vote) 30% is not attainable.

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TRU’s current use structure has some inefficiencies. Specifically, TRU used for staking and liquidity providing (which both pay a yield) can’t be used for voting (which does not pay a yield). As a result, two of the last four votes seem to have been supported with no real contention on both the forum and snapshot, but were unable to hit quorum.

Examples:

  • Ex1: Getty from Grapefruit Trading put up a well-written post to discuss changing the max loan duration from 30 to 90 days. It received unanimous support on the forum and had no real dissenters. Getty then submitted a properly formatted TIP before moving the vote to Snapshot where it received <100,000 votes.
  • Ex2: A proposal was put up to reduce the minimum loan amount from 1mm TUSD → 10,000 TUSD. There was some contention to this vote on the forum and while it received a few ‘no’ votes, it received a super-majority of ‘yes’ votes. This moved directly to Snapshot and received 80% of the votes ‘for’ decreasing the minimum. Quorum on this vote corresponds to a quorum of about 6%
  • Ex3: Jack made a post about expedited TIPs (i.e., skip forum go right to Snapshot) for critical updates. He then made one that similar to ex2, received full support with a quorum that would be equal to ~7%

As will be explained in a soon-to-be-shipped roadmap, these inefficiencies (specifically, the ‘high opportunity cost of voting’) will be improved in February’s TrueFi V2 launch.

For the time being, I’m proposing lowering the Snapshot quorum threshold to 5% and retroactively applying it to the two votes that passed.

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Agreed, thank you for the post @ryan.rodenbaugh.

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Agree. I cannot vote as my TRU staked in loans.

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Agreed, I think this is a good idea

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