Lower Proposal Threshold to 100 COMP

Currently it requires 100,000 COMP to propose governance actions (either directly owned or delegated). This puts governance proposals out of reach for all but a very small set of individuals and entities.

Additionally (my hypothesis) this creates selling pressure on COMP. There is little incentive to accrue COMP because meaningful participation in governance is out of reach.

One way to reason about this is: how much money do I need to make a proposal? Right now the answer would be ~$18 million (100,000 * 180). At 100 COMP to make a proposal the answer is $18,000 which seems appropriate. Within reach for highly motivated individuals.

There is also very little downside here. If we are flooded with proposals (a good thing!) we can 1) implement a COMP burn to make a proposal or 2) incremental raise the level.

I’m looking for a sponsor to submit this!

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Great idea… also, if a proposal is ignored, it won’t reach quorum and just fail.

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I love this idea as well, It is a pity that currently there is less than 10 entities able to initiate voting, it is more centralized that almost all countries (and all democratic) and most corporations. Strange notion of “Decentralized Finance”

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Great idea, but how are we going to pass this?

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Hi folx,

I have been thinking about this recently as well. I wrote a medium post on Wednesday about a possible solution to allow proposals from smaller holders: https://medium.com/@monetsupply/p0-stake-based-decentralized-scrum-3eaef9331890

I personally think it would be prudent to start with a relatively high proposal threshold (maybe 10k+ COMP) and then slowly work our way down until the volume of proposals starts to become significant.

We may also want to consider a testing period, where proposal submission still requires 100k COMP, but superdelegates offer to sponsor lesser backed proposals that meet certain community criteria.

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Definitely onboard to lower the proposal threshold — I think it’s a great idea. @monet-supply’s plan for a gradual reduction makes a lot of sense too.

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Thinking out loud (and probably an implausible idea): can we have a tiered system.

i.e. you can propose with 100 COMP, but for your proposal to pass, you need a higher quorum. you can also propose with 100,000 COMP, and quorum to pass stays the same.

more aggressively, we can have a formula
let x the number of COMP Alice has, such that x <100,000.
let y be the quorum requirement for Alice’s proposal to pass, such that 0.04 < y <1
then the relation of x and y can be determine by a formula x*y = F, where F can be a constant or a formula.

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I support this proposal. I’d love to participate more actively in COMP governance, but 100,000 is entirely out of my reach.

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I thought your proposal was very thoughtful @monet-supply. I do think though the full scrum for governance is maybe a bit too much structure for what we need right now.

Any reduction is better than what we have now. I’m going to continue to advocate for 100 COMP though as I think it’s a meaingful move that can shake things up in a good way.

That’s a cool idea too! With 100 COMP proposal threshold there could be some sort of “governance sneak attack”… someone submits, no one pays attention and then someone who owns 4% of tokens votes it in right at the last minute.

I think @blck @brendan_dharma @rleshner would all be people who would put this forward.

I’m very supportive of lowering the threshold for COMP needed to submit a proposal. With that said, lowering the threshold will likely result in more proposals, and so I’d argue that if we lower the COMP-threshold, we should increase quite substantially the voting period (would suggest 2 weeks).

otherwise I fear it would become quite overwhelming to deal with the volume of proposals that will come.

i’d also argue that if we’re going to lower the COMP-threshold, we may want to consider some sort of “time in wallet” threshold. basically an address must have held 100 COMP for X number of blocks in order to submit a proposal.

in short, I’m open to the idea, but I’d like to see it approached with some caution

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I’ve expressed skepticism around lowering the proposal threshold before and I’ll expound on my reasoning.

My main concern mostly applies to proposals which involve deploying new contracts. I’d be more open to a low threshold to parameter changes as opposed to new contracts, but 100 COMP still seems too low.

The Compound protocol is controlling hundreds of millions of dollars in crypto assets supplied by thousands of users. In its current state, it is one of the best audited and safest DeFi applications out there and I think most users want it to stay that way.

With this taken into account, in order to make meaningful contributions to the protocol, you need to take a deep dive into the protocol and along the way, you’ll meet most of the incredible community. Proposal ideas need to be well thought out, implemented perfectly, and extensively tested (and often audited).

After getting community feedback and iterating to accommodate the needs of the community, you won’t have an issue finding someone to propose your update; I can tell you this from experience.

Another thing to take into account: we are only a few months into Compound decentralization out of the FOUR YEARS the whole process should take. Obviously this early on the community won’t have as much power as it will have in the coming years.

Overall, I believe that the proposals thus far have been highly thoughtful, comprehensive, and usually cater to the requests of the community. I’m concerned that lowering the threshold so much will create lots of spam, half-baked proposals, and sometimes proposing without discussing with the community first. If anyone wants to get a proposal made, feel free to ping me on discord and we can get it done right—even without lowering the proposal threshold.

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LET THE SILENT MAJORITY BE HEARD!
The current holders that are qualified to do proposals have ran the valuation of COMP below YFI !!!
You can still easily shut down our proposals, cause you own orders of magnitude more tokens than us, but at least provide us a chance to be heard?

Thanks for the proposing this, Cheers!

I agree with this proposal - hopefully it can lower the barrier to participating in governance.

If the throughput of proposals gets too noisy/low quality, we can easily vote the threshold up again.

Generally a fan of experimenting with high impact yet reversible decisions.

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I’m thrilled by the enthusiasm to increase participation in Governance, and have some ideas on how the community can make this happen.

For background, these are the principles that guided the design of the Governance process (knowing that it can, and should, evolve over time):

  1. Safety first. As @arr00 mentioned, the protocol manages hundreds of millions of dollars worth of assets. While changing parameters is generally “safe”, introducing new code & contracts is a tremendous risk. An overview to remind folks how proposals work.
  2. Skin in the game. The proposal threshold was set high to ensure that only stakeholders or groups of stakeholders banding together (through delegation) would be able to propose changes.
  3. Openness. You don’t have to be a large COMP holder in order to participate in governance. You can receive voting rights by demonstrating intelligence or a commitment to the protocol or a proposal, and garner public support. Because of delegation, (theoretically) anyone can change the protocol if they adhere to safety first and win the support of those with skin in the game.

While by some metrics, the protocol has succeeded wildly at Openness (see successful and pending proposals from @blck, @brendan_dharma, @arr00…), it’s clear from this thread and conversations in Discord that many folks feel like participation is out of reach.

Prior to launching Governance, our team had the hypothesis that individual members of the community would build a base of delegated support. So far, this hasn’t happened. It could be a function of missing incentives–or other causes that the community can analyze.

Solution 1 - Autonomous Proposals

The ability to delegate COMP opens up some very powerful opportunities that haven’t been fully explored.

Rather than delegating to a protocol politician or well-known community member (who, if they receive 100,000 COMP can create a proposal, act in their own interest, or vote for or against anything they want), what if you could delegate to a special-purpose smart contract–called an Autonomous Proposal.

Anybody that meets a low threshold of ownership (e.g. 100 COMP as @lay2000lbs suggests) could deploy an autonomous proposal, with the title, description, and governance actions that they would like to build support for. Community members can delegate to the autonomous proposal, watch it rise up the leaderboard, and when it reaches the proposal threshold–the proposal is formalized and voted on.

Autonomous proposals have the added benefit of providing additional visibility (and ability to audit and analyze) before going into the voting process–which meaningfully increases safety.

Solution 2 - Deploy a new Governance Contract

The “alpha” Governance contract was meant to be a starting point to test the parameters of the Governance process, and expand upon. A new contract could be written and deployed by the community, changing core parameters; lowering the proposal threshold (which itself would be much more attainable with autonomous proposals), increasing the vote delay, or reducing the quorum (voting requirement).

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Seems like a good idea, but here we go again with the gas and incentivizing. If gas goes up to 300gwei, it’s almost impossible to vote without dumping 20$. Now it’s some incentive to vote, lets see what the community says about this

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Let’s make it N COMP tokens per proposal (not proposer) to avoid a SPAM attack on governance?
This shouldnt be too hard to implement, simply lock up N of the proposers tokens in the governance contract.

I like the idea of autonomous proposals. Seems like a nice hybrid between on-chain and off-chain voting. I also think the leaderboard / gamification of it could be good.

@rleshner are you thinking anyone would be able to initiate an autonomous proposal? Or would there be a minimum cap on that (such as 100 COMP)?

Yes, this!~ I think something like this can go a long way to incentivize a minimum amount of COMP ownership (e.g. 100) and increase the level of community engagement. Additionally, if farmers see value in COMP governance, they will want to keep a greater % of their rewards.