Lower Proposal Thresholds v2

Background

Currently, the proposal threshold is 65K, which enables 12 addresses (excluding those on the whitelist) to make direct proposals to governance. Governor Bravo enables Compound’s community to change the proposal threshold (which was previously executed upon via Proposal 52 to reduce the threshold to 65K). Though there has been discussion on reducing the proposal threshold following Proposal 52 that fell through, we believe that over the past several months we’ve seen several key issues that warrant the community revisiting lowering the threshold.

  1. Current Compound delegates are unable to create CAPs (unless they own 100 COMP), and as such current delegates are unable to participate in governance. Additionally, any users below 100 COMP in holdings are unable to even create a proposal (CrowdProposalFactory contract).
  2. Current Compound delegates are unable to lend support to CAPs (as they can’t delegate delegated funds), effectively limiting the ability of delegates to participate in governance if they’re below the 65K limit.
  3. Compound users are not incentivized to participate in governance & token-holders feel a lack of ownership in Compound. At this time, we believe reducing the proposal threshold is an important step of many towards increasing governance participation & contributions by community members in the long-term by reducing the friction to create proposals.

Idea

We believe that the community should consider lowering the proposal threshold in order to increase the number of potential proposers & speed up the governance process. We’ve created a poll below that corresponds to potential voting thresholds and want to get community input on which proposal threshold Compound’s proposal limit should move to.

Potential Thresholds
65K (Current) => 12 Addresses
50K => 24 Addresses
10K => 41 Addresses
1K => 59 Addresses
100 => 75 Addresses

What should the new minimum proposal threshold be?

  • 65K (Current)
  • 50K
  • 10K
  • 1K
  • 100

0 voters


On January 14, if the community decides that Compound’s proposal limit should reduce from the current 65K (~$13M) limit, we (Blockchain at Berkeley) will take the result from this poll and put up a proposal that changes the minimum proposal threshold to the community-decided result.

We believe reducing the CAP threshold limit from 100 COMP (~$20K) to 1 COMP (~$200) would enable smaller token holders & delegates to be able to propose changes via autonomous proposals, but we believe this warrants more discussion (and consideration of potential negative implications) before being put to a vote.

2 Likes

Generally, we think lowering the proposal threshold to 50k is a good next step.

As for the CAP limit, 1 might be low, but we wouldn’t oppose it either since it is rather arbitrary and has little downside. The CAP contract is external to the protocol: CrowdProposalFactory | 0x54a06047087927D9B0fb21c1cf0ebd792764dDB8

1 Like

Generally supportive of this initiative but would prefer reducing the CAP threshold by ~1 order of magnitude at a time (~10 COMP). I haven’t looked closely at wallet data recently but suspect that, unlike the case at the very top, the number of eligible wallets jumps exponentially from 10^2 to 10^1 and then to 10^0.

1 Like

@allthecolors Because the CAP contract is external to the protocol anyone would be able to deploy a “new” CAP contract with the nonzero compStakeAmount that they wish (i.e. 10 COMP, 1 COMP, 0.1 COMP, etc.) As such, we’ll likely deploy a new CAP contract based off of consensus here on behalf of the community, but anyone could go ahead and deploy a new CAP contract if they wish to do so with a lower limit (w/ the disincentive being the contract deployment cost).