The purpose of this thread is to share and collect feedback on the core concepts of a possible upcoming proposal for further decentralizing Rarible community governance by introducing RARI staking, rewarding governance participation and changing the RARI distribution plan to fund the Rarible DAO with a governance-controlled RARI treasury to be used in the interests of the Rarible community.
This is a draft proposal to be reviewed by the community. Feedback is very welcome!
TL;DR, here is the proposal we are currently considering:
- RARI would be “activated” through staking RARI in a governance smart contract (“Activated RARI”)
- stakers would be able to use their Activated RARI to vote on governance proposals or delegate voting power to eligible community participants;
- the RARI distribution plan would be adjusted so that:
- 25% of the marketplace mining fund (i.e.,15% of the RARI TotalSupply) would be reallocated away from the marketplace mining fund and into a smart contract Community Treasury governed by Activated RARI for developer and creator grants and other purposes beneficial to the Rarible community;
- 25% of the marketplace mining fund (i.e., 15% of the RARI TotalSupply) would be reallocated away from the marketplace mining fund and into a governance mining fund used to reward holders of Activated RARI who actively participate in governance;
- community treasury and Activated RARI holder rewards maintain the same weekly distribution schedule.
- (thus, in total, the distribution plan would be changed for 50% of the marketplace mining fund (i.e., 30% of the RARI TotalSupply, while the other aspects of the RARI distribution plan would remain the same);
- whereas currently all RARI votes are “non-binding advisory votes,” votes of Activated RARI on proposals relating to use of the Community Treasury would be binding votes, bringing us one step closer to creating a fully decentralized Rarible DAO;
- un-staked RARI would remain eligible to participate in signaling votes through snapshot, but, to mitigate the potential for governance attacks, would not be eligible to participate in binding votes such as votes on uses of the Community Treasury;
Please share your comments and reasoned improvement suggestions below.
P.S. we’re running a contest for the best name for Activated RARI
1) RARI activation process (staking/unstaking)
Activating RARI would require staking your RARI in the governance smart contract for a specific, pre-committed period of time. Un-staking your RARI before expiration of the selected time period would not be possible. By staking RARI for a specific period of time, RARI holders commit to keep holding RARI after the results of a vote are implemented—ensuring that, when they vote, stakers have “skin in the game” with respect to the relevant proposal. Requiring a staking commitment to be eligible for voting should mitigate the potential for opportunistic governance attacks by short-term RARI holders whose incentives are not aligned with those of the broader Rarible community.
Flexible locking period
Users will be able to choose any lockup period between 1 month and 2 years. The number of locked RARI which are deemed “Activated RARI’ for each user will depend on the length of the lockup period that user has committed to, with the ratio of RARI to Activated RARI being 1:1 at the start of the Maximum Lockup Period (2 years) and 1:0.1 at the start of the Minimum Lockup Period (2 months). For example, a user locking up 100 RARI for a two-year period will have 100 Activated RARI at the start of the two-year period, while a user locking up 100 RARI for a one-year period will have 50 Activated RARI at the start of the one-year period.
The longer the locking period — the more Activated RARI received.
Your voting power (Activated RARI) will be decreasing linearly over the course of the chosen staking period. Upon the completion of the lock-up, your Activated RARI balance will be zero, and you will then be free to withdraw your RARI.
UX suggestions are welcome!
- Should Activated RARI allocation grow linearly or exponentially depending on the staking period?
- What should the Maximum Lockup Period and Minimum Lockup Period be?
2) Voting power and delegation
With staking, one of our primary goals is to kickstart a governance process that does not depend on the team’s ability to execute it. Activated RARI holders will form the Governance Committee that will have the power to introduce and vote on certain proposals.
Activated RARI (and only Activated RARI) will have binding voting power. This is an important step in transitioning from the “Signaling Era” in which votes of RARI holders are advisory, and the “Autonomous Era” in which there is a true Rarible DAO with binding votes.
Additionally, a holder of Activated RARI may delegate their voting power to eligible Rarible community participants. We will initially establish certain terms and conditions of delegation to determine eligibility—for example, we may reserve the right to disregard votes delegated to evidently hostile actors. In order to delegate, you would choose the address that would receive your voting power. After delegation, each voting decision would be done by the chosen party on your behalf, until you decide to un-delegate or re-delegate to another person.
3) RARI Community Treasury
25% of the current RARI marketplace mining fund (i.e.,15% of the RARI TotalSupply) would be reallocated away from marketplace mining and into a Community Treasury controlled by a smart contract that is governed by Activated RARI. The purpose of the Community Treasury would be to fund initiatives beneficial to the Rarible community. For example, RARI could be provided to third-party development teams to incentivize or reward the creation or improvement of smart contracts to be integrated into the Rarible Protocol or for creation of additional apps, front-ends or user tools to enhance interaction with the Rarible Protocol. Or, as another example, Activated RARI could be voted to provide RARI to artists to incentivize the creation of special NFTs, or to acquire NFTs to be held in a virtual Rarible Community Museum of NFTs.
Below are some examples of activities that the Governance Committee is expected to fund:
- Distributed development (e.g. open-source, gitcoin)
- Community Hires (regular payments to the performing teams)
- Content creation
- How-to guides
- Conferences/hackathons sponsorship
- New artists funding
- Artists onboarding grants (20$ to 100 new artists to cover gas prices)
- Ambassador Compensation
- Valuable actions on the platform (moderation, verification, making some sales, being active in the community)
Although Activated RARI votes will be binding and control the Community Treasury through the smart contract, we believe the Community Treasury should be used for long-term value-creating purposes decided by the community—and that it should not be liquidated, issued as dividends or distributed to RARI holders as a financial reward. Although, in the final version of the governance smart contract system, we will not be able to prevent the passage of such proposals, we intend to propose to the community a Rarible DAO Charter that reflects this and other values, and we would pre-commit to voting Rarible’s RARI against proposals that violate the Rarible DAO Charter. Also, during the temporary period that the Community Treasury’s security is managed by the Multisig (see below), the Multisig key holders may refuse to implement such proposals even if they are passed.
4) Governance Participation Rewards
25% of the marketplace mining fund (i.e., 15% of the RARI TotalSupply) would be reallocated away from the marketplace mining fund and into a governance mining fund used to reward holders of Activated RARI who actively participate in governance. In order to be eligible to receive a portion of such rewards, users must both: (a) stake RARI to make it Activated RARI; and (b) either: (1) use the Activated RARI in proposal-making or proposal voting; or (2) delegate to another Rarible community member who uses the Activated RARI in proposal-making or proposal voting. We expect that about 18,750 RARI (i.e,. 25% of the current marketplace mining weekly distribution) would be distributed on a weekly basis, based on such participation.
As pet3rpan_ (Twitter) nicely put it,
Rather than thinking of token distribution plans as a static path to follow, I like to better think of it as a rolling re-allocation of the network to the most valuable participants.
Token distributions should be thoughtful and adapt to the current/future context of a DAO.
- How to measure a minimum level of governance activity to receive rewards?
- Is it a good idea to add successful proposal rewards? i.e. If the proposal for $X is accepted, its creator receives X0.5