Improving Delegate Participation

[robinnagpal]

In the last development call, many people mentioned they were unhappy because of the very little or no feedback and the low number of votes. This problem has also happened in many other DAOs. Some of them have started programs that reward delegates for giving proper feedback.

Below, I’ve listed some lessons from these DAOs and suggestions for how Compound could get more delegates involved.

Next steps:

1. I will gather feedback through some one-on-one sessions to see how we can improve the program.
2. I will present this in our next development call.
3. If the community finds it helpful, I can create some standard formats for reviews and feedback.

Tagging a few delegates for more visibility
@WintermuteGovernance @PGov @Michigan_Blockchain @pennblockchain @Avantgarde @she256 @monet-supply @arr00

[allthecolors]

Thanks for the initiative here, which seems parallel (but not the same, and not necessarily in competition) with the recent CSWG proposal.

I wanted to highlight a suite of relevant work performed by CGP grantees SignalCorps, DeepDAO, and KarmaHQ on governance participation in Compound which may help guide your exploration. See the following resources they produced:

SignalCorps

• Compound Governance Delegation Tracker
• Analysis of Governance Participation
• Analysis of Trends in Compound Governance Decentralization

DeepDAO

• Compound Voter Discovery and Segmentation Report

KarmaHQ

• Compound Governance Dashboard

[robinnagpal]

I gave the presentation on incentivizing delegates in today’s dev call.

Here are some of the feedback points I received:

1. Ensure that people with fewer votes (or non-delegates) also have a say in the protocol vision.
2. Look into ways and options that encourage more COMP holders to delegate their COMP.

I will be working towards finding some solutions for these.

[robinnagpal]

To increase delegate engagement and improve COMP delegation, the following steps can be taken:

1. Incentivize delegates for their feedback. Delegates who are more involved and provide better feedback and reviews should receive greater rewards.
2. Delegates can then share part of these rewards with their delegators.

~75% of the COMP has not yet been delegated. Incentives like this can boost contributions, improve proposal vetting, and engage even small token holders, helping align the DAO.

Looking at the COMP token contract here, it’s apparent that finding all the delegators for a delegatee directly within the contract is challenging, and managing this off-chain would be much simpler.

The list of delegators for a delegate can be maintained off-chain. Using a new tool, a delegate can create a transaction to “share incentives back with delegators.” This transaction can be sent to a Gnosis Safe using their SDK. This approach is simpler to implement, although nearly everything is handled off-chain, except for the final Gnosis payment. Hence, the end payment can still be reviewed by the delegates.

Here is how a simplest app for sharing the incentives can look like

[TennisBowling]

Hey, so I wanted to know what the need is for a multisig which holds the COMP for distribution back to the delegate. Is there another reason beside convenience to have a multisig handle the allocation simply instead of the voting contracts?

[robinnagpal]

Thank you, @TennisBowling for checking the details.

Safe has a few features:

1. Nice UI to review transactions (especially needed when transferring to many users).
2. Transaction batching.
3. Relay Kit (I have not used it, but I hope it might allow a DAO to also sponsor the gas fee).

I have integrated with Safe in the past, so I recommend it, but I am open to other better/relevant options too.

[allthecolors]

I appreciate @robinnagpal 's initiative here but am lukewarm on the details of idea for a few reasons:

(1) most large COMP delegates are organizations for whom earning a bit of COMP for responsible governance may not be a sufficient motivator or priority. These orgs may in some cases have regulatory barriers or conflicts of interest preventing them from voting on certain proposals (there is always the Abstain option, but even this could be an issue in some cases).

(2) Passing a fraction of COMP delegate rewards to one’s delegators would give COMP a sort of “shadow-yield”, i.e. delegate your COMP responsibly in return for a small income from your delegate. Seems to me like a red flag re: expecting returns off the efforts of others, which would be a shame to see after Labs put in so much effort to minimize regulatory risk around COMP

(3) Despite that shadow-yield, I don’t think this approach would result in much of a delegation boost. Why? Delegation on mainnet is still expensive relative to most on-chain users’ COMP holdings. >99% of EOAs with COMP hold <150 COMP, so it would probably take months or years of pass-through rewards for most holders just to recuperate the gas cost to delegate.

I think an aggressive, time-limited delegation campaign (getting on-chain governance KOLs onboard to spread the word) with a dead-simple UI and gas covered by the DAO (e.g. by signature relay a la comp.vote, if this is possible) would have a bigger impact on delegate participation, even if it wasn’t incentivized beyond the gas to delegate. This may be a jaded viewpoint, but I think many people would participate on the sheer speculation that such activity might be rewarded in the future.

Will be interested to hear what the new Governance Support Working Group finds in terms of case studies in governance incentivization and how we can learn from those to improve delegation on Compound.