It has become extremely difficult to pass treasury votes, largely due to a relatively high quorum requirement in comparison to the number of staked and “active” ZRX. There is a process underway to implement a broader re-vamp of 0x governance, but to mitigate the current situation, I’d like to propose a short-term experiment to (1) expand the number of active delegates and (2) trial compensation for delegates. If the experiment leads to meaningful improvements, we can use the learnings to inform a more formal program down the road.
After the treasury was established in March 2021 with initial funding from 0x Labs, a group of community bootstrap delegates were each allocated 1.5M ZRX voting power with the goal of enabling them to advocate for community interests and empowering them to shepherd usage of the treasury funds:
- Polygon Foundation
Over the past 18 months overall voting participation has declined, which has had the effect of making it difficult to put treasury funds to productive use due to not being able to achieve a quorum for treasury votes.
Because a meaningful portion of the delegated voting power is inactive (29%), I propose (1) reallocating the inactive ZRX delegated to DefiSaver and SonofPegasus to new delegates, and (2) introducing a 3-month trial period to compensate delegates for their work.
If sentiment is favorable for reallocating the inactive voting power, community members may self-nominate to be considered as candidates for the open delegations.
To assess sentiment for this experiment, we can conduct a series of three votes, described below.
Reactivate Inactive ZRX
There is currently 3M ZRX of delegated voting power that is inactive. I propose to reallocate this ZRX to new delegates to increase the amount of ZRX that is active in governance votes, increasing the likelihood of treasury votes reaching quorum.
To gauge sentiment for reallocation, we can conduct two snapshot votes.
- The first vote would be a single choice vote to measure overall sentiment for reallocating the inactive ZRX (for or against).
- The second vote would be a multiple choice vote to measure the community’s support for individual candidates. Any community member who would like to be considered should reply to this thread indicating so. The top three candidates (as determined by the snapshot vote) will each be allocated 1M ZRX of voting power. Current delegates are discouraged from being considered for additional allocation in order to increase the number of individual/groups who are empowered to help lead 0x Protocol Governance.
Trial compensation period
Participating in governance requires a lot of time and effort, and the quality of governance can be improved by having delegates with relevant but diverse domain knowledge, skillsets, experience, and points of view. Compensating delegates for their work is a proven way of attracting and rewarding quality delegates.
If the community is in favor of compensating delegates, I’d like to propose a 3-month trial period with a budget of $15k. This budget would go towards compensating the 5 current active bootstrap delegates (Nikita, Joao, SHA, Gabrigo, Polygon Foundation) and 3 new delegates at a rate of $715/month and $475/month respectively. The difference in compensation rate is to account for the relative difference in voting power (1.5M vs. 1M).
I do want to caveat that this compensation structure does not necessarily create the ideal incentive alignment between delegates and the community, nor is it intended to set a benchmark for compensation in terms of the monetary value of active governance participation and responsibility. However, I believe that for a trial, this simple structure is suitable.
To gauge sentiment for delegate compensation, we can conduct one snapshot vote that would be a single choice vote (for or against).
The goal of this proposed short-term experiment is two-fold: (1) increase the quality of governance participation, and (2) increase the quantity of ZRX participating in votes.
The metrics that can be used to gauge success of this experiment can be (1) subjective assessment of the quality of forum and discord discussion, and (2) amount of ZRX participating in votes.
If the experiment is successful in increasing both meaningful participation and the number of active ZRX (i.e., both quality and quantity), and if a conclusion can be drawn that compensating delegates is a factor in those improvements, it could be a signal that conditions are now conducive for sunsetting the bootstrap delegate experiment and formalizing a more structured “0x Protocol Voter” program.