PIP-38: Re-electing Michael O'Rourke to the Foundation

[steve (Steve Tingiris)]

@AmishBatman

Are you being ironic?

@AmishBatman, who else would be responsible if @o_rourke is making all the decisions? That’s accountability—you can have autonomy and still be accountable.

[ethen]

Y’all are wild out here. Straight up diluting yourselves by giving millions of tokens away to someone that has shown makes terrible decisions.

This proposal reads like the last one, only worse: PEP-49: PNI Compensation (Amended)

You all know there are other options right? Michael is not the be all end all. If it were up to me, I would put @shane in charge of everything. Give him full control of the Foundation and the DAO.

I’m also surprised to see the lack of appreciation on Ben and Dermots post. Actually, maybe I’m not surprised.

This is the last time I will post here. For the first time i can say I am truly done with Pocket Network. Wish I could say its been fun.

Good riddance!

[JackALaing (Jack Laing)]

Opinions on this proposal aside, for the good of POKT it is crucial that any approved changes be legitimate, which means they must either:

• Be in compliance with the Foundation Articles and DAO Constitution
• Follow the proper process to amend the Articles/Constitution

To be able to proceed as currently proposed, amendments are required to both documents:

• this proposal must include clearly written amendments to the Articles/Constitution anywhere that Mike’s proposed restructuring would be non-compliant
• this proposal must pass with a supermajority, which means 75% approval by DAO participants who voted on the resolution, with the vote lasting no fewer than 14 days and a quorum of at least 25% of DAO participants who have cast a vote within the 12 months immediately prior to the date of the vote
• the Article amendments must be officially filed with the secretary, exactly as written in the proposal, by the director(s)
• the Constitution must then be updated in GitHub exactly as written in the proposal

As the interim director, it will be @shane’s duty to see these changes are approved properly as outlined above.

For an example of the clarity that should be provided for amendments, see here.

As for where I see conflicts between this proposal and the current Articles/Constitution…

Foundation Articles:

• 1.5 requires supermajority approval (75% described above) for all ordinary/special resolutions of the Foundation, which includes director appointments/removals and amendments to the Articles
• 4.5 empowers the DAO to govern the appointment of directors, via 1.5 and 4.17
• 4.6 compels all new directors to resign from other positions of executive authority within the DAO, to avoid conflicts of interest
• 4.8 empowers the DAO to remove directors
• 4.17 compels directors to carry out with best efforts all DAO Resolutions (approved proposals)
• 4.35 requires directors to disclose information to the DAO as necessary to ensure informed DAO Resolutions
• 4.38 limits director compensation
• 4.42-4.44 various controls that give the DAO oversight on Foundation spending
• 6.3-6.6 empowers the DAO to govern the appointment of supervisors
• 6.8 empowers the DAO to remove supervisors
• 6.17 compels supervisors to carry out with best efforts all DAO Resolutions (approved proposals)

Constitution:

• 4.7-4.10 repeats elements of the Foundation Articles re deferral of directors to the DAO
• 6.8 states that all parameters not otherwise specified will be governed by majority approval
• 8.11 states that protocol upgrades will be governed by PIPs
• 8.14 states that no foundation article amendments can be made without DAO approval

[shane]

Well @JackALaing, you sure did design a fine system to prevent centralized control

[msa6867]

A summary of my thoughts:

1. Whatever the backstory of mutual loss of confidence in each other between O’Rourke and the previous PNF board, that ship has sailed. The founder is requesting to re-unify POKT leadership under himself, and we might as well get behind this vision as preferable to all alternate outcomes.
2. If O’Rourke is asking the DAO to trust him by handing over to him the keys to both the treasury and the parameters, I do not think it is too much in return for the DAO to ask O’Rourke to trust the DAO to not use it’s supermajority vote to oust him without extreme cause or to use it’s majority to capriciously override his funding and parameter choices. The call to “suspend the DAO,” even if for a defined period of time, should be dropped; it is bad for PR, bad for token price and is not even an action that the DAO has the power to undertake within the constraints of the current constitution. The compensation package can be structured in such a manner to protect both O’Rourke and the DAO in case things do go south in the future (see below)
3. Re the outlined economic platform, I find his understanding and applications of the theories of reflexivity, shock and supply-side buy pressure to be misguided with greater chance of directly contributing to negative price movement than positive price movement. Nonetheless, none of the proposed actions are particularly harmful and some of the ideas presented are quite good (such as putting to good use the work done a year ago to turn RTTM into an array). One proposal in particular I think is absolutely essential for providing necessary runway to the project, namely raising inflation in combination with radically increasing the DAO allocation. In addition, the case for the benefit of agility has merit. I am therefore ok handing over the keys of the car to O’Rourke within certain bounds (see below).

The first summary point above is standalone.

Some details to flesh out the second summary point are below:

• In order to stay within the constitution, the proposed action should simply be to appoint O”Rouke as a director of PNF. This is an action the DAO is constitutionally enabled to make. Since the board is currently vacant, this will make him, upon appointment, the de facto sole director.
• If the DAO goes through all the trouble to gather the 75% of the vote to pass this action, cannot O’Rourke trust the DAO to block any non-meritorious effort to oust him or dilute his authority by adding directors? He would just need to convince 25% of the voters to stay the course with him at the helm.
• Wording the proposal to name him to be the “sole director” does not have meaning within the constitution. The addition of the word “sole” is unnecessary and could lead to constitutional challenges.
• Wording the proposal to include any action of the nature of “suspend the DAO” does not have meaning within the constitution. It is unnecessary and could lead to constitutional challenges.
• By “constitutional challenges” i mean that Shane, acting in capacity as interim director of the PNF could (and should) find the proposal to be unconstitutional and toss out the results and refuse to hand over the keys.
• Greater confidence is conveyed to the market place, and thus to $POKT price, if the founder of the project and the POKT DAO are working together. Bypassing the constitutional process is not a good look
• If, despite the above, O’Rourke insists that suspending of the DAO for two years (or whatever else similar to that effect) is non-negotiable in order to avoid nuclear war, then the proposal should at least be reshaped to be, first and foremost, a proposed constitutional amendment that spells out the exact wording of the textual change to the constitution that will enable whatever else follows to be constitutional. I see that @Jackalaing commented to this effect, so I defer to him. That being said, I really think that this proposal (or set of proposals) can be negotiated to everyone’s satisfaction in a manner that avoids the need for any constitutional changes.
• A lot of good ideas have been floated on how to tweak the proposed milestone payouts in order to protect the community’s interests. None quite hit the mark yet and work should continue over the next few days on this front. In addition, if O’Rourke agrees to work with the DAO under the shadow of the possibility of a 75% vote of no confidence, then it is only fair to make sure the wording is such as to protect his interests in the event that DAO were every to take that step. [I just read Jack’s reference to Article 4.38 regarding limits to director compensation; I need to look at the wording of the text, but I imagine there may be way to provide the spirit of what O-Rourke is asking for while staying compliant to this article].
• Taking cues from how compensation packages tend to be structured in the equities world is a good place to start, as those have been refined over decades.
• For example, the DAO could grant options to O’Rourke to purchase $POKT from the PNF treasury at various price points and vesting at certain milestones. E.g., vesting immediately could be options to “purchase” (eg swap for USDT) TBD million $POKT at 0.3 USDT, 0.6 USDT, 1.8 USDT and 3USDT. Vesting upon shipping Shannon could be options priced at 0.1 USDT. This, I think, would satisfy most of the concerns the community has raised, while also protecting O’Rourke from the DAO, as certain options could vest day one and aren’t revocable even if he is removed as director. I think this also stays compliant with the Article on compensation limits, as the options would have negligible book value at current market prices.
• Whatever form the above milestone-type payments take, I suggest that O’Rourke and the DAO negotiate over the next few days a split between what adheres to him as founder of the project, and what adheres to PNF, for the director(s) to distribute as fiduciaries of the PNF treasury. The first portion goes irrevocably to O’Rourke no matter what; the control of the second portion would either be with O’Rourke, if he is still director at the time of the relevant milestone, or would be with whoever succeeds him, if he steps down or is removed before the milestone is achieved.
• Wording regarding control of the DAO treasury should take care to remain constitutional. One way I could foresee doing this is: (a) suspend all current DAO initiatives that require recurring funding, (b) turn more or less 95% of current DAO treasury and 95% of incoming DAO allocation over to the PNF to steward, with the recommendation (but not requirement) that PNF continue funding the current initiates. A small portion (e.g., 5% or so) could possibly be retained by the DAO to give DAO ability to directly fund a few items that are not a priority item to PNF. The PNF portion itself should be specified as to split between what portion gets escrowed to cover future milestone payments and what portion is available to the PNF for current discretionary spends.
• Re potential conflicts of interest, I personally don’t see any conflict between him leading PNF and Grove simultaneously. I saw Jack’s reference to Article 4.6. I’m not sure yet the relevance of this article to O’Rourke’s executive position at Grove; I’d have to see the exact wording of the article. Note that “within the DAO” does not on face value mean “within the Pocket ecosystem”.
• See also @breezytm comment; lots of good ideas there

Some details to flesh out the third summary point are below:

• Please see @RawthiL comment; I agree with much of what he wrote

• In particular, to think that the supply-side buy pressure that happened in 2021 in the midst of a bull run and the euphoria of a shiny new first-to-market token can be recreated seven years into a project wrought with glaring missteps, competitors crowding the space, and during a down/stagnant macro environment is not realistic.

• The numbers simply don’t add up yet: the goals of directing 75% of mint to DAO, keeping inflation under ~30% and trying to create supply-side FOMO is impossible to achieve simultaneously. Any two out of the three can be achieved by sacrificing the third, but you cannot have all three.

• My way of thinking is, first and foremost, to sacrifice trying to pump supply-side buy pressure and focus on using inflation to secure the funding needed to finish the development (e.g., immediately triple or quadruple inflation target while increasing DAO allocation to 75%), being careful not to lose market confidence in the process. Then, secondarily, relax a bit on inflation cap (on short time scales only and to the extent that market confidence allows) to experiment with creating a modest amount of supply-side buy pressure during times that the demand-side is also growing.

• In other words: moving the adjustment of RTTM from weekly to either quarterly or biannually (or upon hitting inflation upper bounds, whichever comes first) is a sound idea that I support.

• I absolutely agree with @RawthiL that burn should not be brought to zero. It is already well below market rate. If the goal is to support new gateways, a preferable way to achieve this is to leave the gateway fee and burn as is, and use DAO/PNF treasury to fund rebates to new gateways during the first 6 months of service. Eg, 100% rebate for first two months, 75% rebate during month 3-4, etc.

• The following statement took me completely by surprise, “Launching Shannon with a 1:1 burn/mint is the right approach.” Talk about shocks to the system! Unless demand is something like 10x what it is today, there is no way I see launching Shannon with burn/mint equilibrium without tearing the whole network apart. If that is the current mindset, I suggest that prior to Shannon launch it be vetted for viability.

• Reducing MinStake to 5k is doable. That always seemed a natural accompaniment to reducing maxchains. Note, that leaving ServicerStakeWeightCeiling at 60k is fine, but will result in the number of bins increasing from 4 to 16. That’s not a problem as far as the protocol goes; everything should adjust seamlessly, but it can create a few headaches for ancillary tools like the Poktscan explorer. It is also preferable to the alternative: reducing the ceiling would trigger a mass unstaking to right-size stakes to the new rules of the game. Again, that is not a problem from a protocol perspective, but could be a problem if done at a time when network providers and/or their token investors are losing confidence in the project. The stickiness of nodes to ride through uncertain times is a real thing. A parameter change trigger that “forces” (ie strongly incentivizes) an unstake of the majority of nodes removes that stickiness and could be just the prompt for a mass exodus. Not enough perhaps to technically threaten the protocol, but certainly enough to create a sizeable wave of sell pressure and threaten complete loss of market confidence in the project.

• Giving the keys of the parameters to O’Rourke as PNF director (or even if he is not a director) is not a problem constitutionally. It’s a very simply PUP that doesn’t even need supermajority approval: Text of the PUP would be something like the following (assuming he is named PNF director):

• • Parameters affected: all
• • Old Values: See xyz documentation
• • New Values: according to the discretion of the PNF

• -Of course this is premised, once again, on him being willing to trust the DAO not to revoke or override this PUP capriciously, matching the trust that he is asking the DAO to give him by deferring to him in the first place.

• -For the safety and protection of all, bounds can be placed on key parameters, PNF/O’Rourke would have discretion to set the parameters only within the sandbox that the DAO defines. I haven’t thought this through all the way yet, but possible bounds could be things like:

• • "weighted average RTTM over all chains shall not exceed 2000 uPOKT and shall not trigger any daily mint in excess of 3M POKT or annual mint in excess of 500M POKT.”
• • "the setting of RTTM, DAO_allocation and Validator_allocation shall be such to ensure that validator allocation of mint per relay does not fall below 10 uPOKT and servicer allocation of mint per relay does not fall below 150 uPOKT.”
• • "GatewayFeePerRelay shall not be set lower than $0.00000085. That being said, PNF is empowered to use it’s treasury resources to offer rebates to gateways to offset this fee during the first 6 months of service.”

• O’Rourke could then experiment as he wishes within those bounds but would have to follow the DAO proposal process for any change he wishes to make outside those bounds. I believe that having such bounds may give some assurance to the marketplace that the project is on sound footing and not opening the door to hyper-inflation or otherwise flailing and desperately grasping for straws.

[o_rourke (Michael O'Rourke)]

Good call out - I’ve added these sections and a couple more for the Articles and Constitution. These are just examples but will consult legal for proper phrasing if the proposal is passed.

[o_rourke (Michael O'Rourke)]

Thanks for the detailed response. I’ll address the points that haven’t been brought up yet:

@msa6867

For example, the DAO could grant options to O’Rourke to purchase $POKT from the PNF treasury at various price points and vesting at certain milestones. E.g., vesting immediately could be options to “purchase” (eg swap for USDT) TBD million $POKT at 0.3 USDT, 0.6 USDT, 1.8 USDT and 3USDT. Vesting upon shipping Shannon could be options priced at 0.1 USDT. This, I think, would satisfy most of the concerns the community has raised, while also protecting O’Rourke from the DAO, as certain options could vest day one and aren’t revocable even if he is removed as director. I think this also stays compliant with the Article on compensation limits, as the options would have negligible book value at current market prices.

I think this is reasonable but it would need to be at a significantly cheaper rate to make this beneficial. Will need to consult with legal but some version of purchasing these at a 99.99% discount with clawbacks for vesting would make sense. The same goes for others receiving grants as well.

@msa6867

The numbers simply don’t add up yet: the goals of directing 75% of mint to DAO, keeping inflation under ~30% and trying to create supply-side FOMO is impossible to achieve simultaneously. Any two out of the three can be achieved by sacrificing the third, but you cannot have all three.

The goal of these parameter changes is to increase the total supply while keeping the circulating supply (node and validator rewards) relatively constant at ~5% assuming no relay growth. When we see relay growth increase, circulating supply should increase until we hit the reset of 20% emissions for circulating. DAO emissions should be adjusted through this process as well.

@msa6867

My way of thinking is, first and foremost, to sacrifice trying to pump supply-side buy pressure and focus on using inflation to secure the funding needed to finish the development (e.g., immediately triple or quadruple inflation target while increasing DAO allocation to 75%), being careful not to lose market confidence in the process. Then, secondarily, relax a bit on inflation cap (on short time scales only and to the extent that market confidence allows) to experiment with creating a modest amount of supply-side buy pressure during times that the demand-side is also growing.

This is prudent. To reduce downside effects I want to introduce long term staking incentives for the network. Similar to how Filecoin uses a multiplier, we can do something similar for node runners. With more gateways coming online it’s a reasonable expectation to assume relays will continue growth. In the advent of the reset at 20% of circulating inflation, the expectation of continued relay growth mitigates downside pressure.

@msa6867

I absolutely agree with @RawthiL that burn should not be brought to zero. It is already well below market rate. If the goal is to support new gateways, a preferable way to achieve this is to leave the gateway fee and burn as is, and use DAO/PNF treasury to fund rebates to new gateways during the first 6 months of service. Eg, 100% rebate for first two months, 75% rebate during month 3-4, etc.

I’ve adjusted the proposal to reflect a full rebate. This should be the case until Shannon launches. cc @RawthiL

@msa6867

For the safety and protection of all, bounds can be placed on key parameters, PNF/O’Rourke would have discretion to set the parameters only within the sandbox that the DAO defines. I haven’t thought this through all the way yet, but possible bounds could be things like:

I don’t think it’s prudent to put restrictions on the range of parameters given the dynamism of not knowing how fast relays will grow nor what changes will happen to the price. As we start seeing things move I expect to preempt potential scenarios through the forums so we can discuss ahead of time.

[blockjoe (Joe)]

It’s been a while since I’ve chimed in here, but I want to bring into this official proposal some context of a piece of very relevant discourse that the one and only @PoktNews has highlighted in the past week, because I think it is a piece that is important, although buried in what is a very complex and deep proposal here.

Overview

https://x.com/PoktNews/status/1809583495804510376

Assuming that the embed feature for posts has been broken, it is a reply to this callout.

Open vector for bad actors to exploit Morse. Certain gateway operator can send fake relays (fake demand) and print coins out of thin air. Something that shouldn’t be possible in case that Grove and PNF management is closely tied.

These callouts of themselves shouldn’t be something that ultimately blocks a single party from governing the parameters, but deeper transparency into the tokenomic emissions control that is possible from this is a piece of transparency that should be highlighted, because I know this community of individuals has the ability to understand what they would require to have transparency that the kind of funny business that isn’t possible isn’t happening.

This all being said, having been someone that worked on the Grove team at one point, this notion of self dealing was well understood, and any work done internally was with the perspective of not allowing this behavior at bay to happen. These points don’t represent my views about if this proposal should or should not move forward, but rather to make sure those who are independent actors in the DAO have a wider view of the possible implications of what can be possible when turning off the gateway burn mechanism, paired with having full control of new network token emissions.

He Who Controls the App Keys Controls the Token Distribution

Fundamentally in Morse, the app key is the control point of token emissions. This was the motivation for keeping the gateway run by Grove, and was one of the original motivators for the migration away from Morse, and moving the system to a sampling based mechanism.

The problem that exists in Morse, is that if you simultaneously hold both an app key and the node key for a given app/node session pair, the owner of that app key can, for every session where they’re matched with their own nodes, simply sign randomized data and generate the corresponding Merkle Proofs against random streams of data. This means that if an app is able to pair itself with up to X nodes in a session, that party can generate X/24 (current nodes per session) of the total allocation of relays staked to that application fee.

What’s very important to consider here, is that if a Gateway operator also operates a majority of the node network for a given chain, they can mint a significant amount of that corresponding chain’s full bandwidth of relays without having to ever service the underlying RPC data.

Additionally, there is nothing that forces a gateway to send relays to all nodes in a session. Internal ranking systems like the cherry picker were built in a good faith way to properly tie rewards to meaningful quality of service. A third party gateway can send relays to only nodes that they want, possibly only the nodes they control.

The introduction of a burn mechanism for gateway actors completely eliminated any economic incentive for that app key owner (currently a gateway) to indulge in this kind of behavior.

Gaming Custom Network Rewards and No DAO Approval System for New Chains

This is a very important piece. Because while it would be clear that a gateway is sending it’s tokens only to it’s nodes in the long term, the real economic gain to be had here is to race to stake as many nodes on the new chain that the gateway can service. If there isn’t the same open process for onboarding a new chain to the protocol, there is an insider advantage to getting ready to allocate enough tokens to stake a majority of the early nodes on a new chain. Pairing this with incentivized bootstrapping rewards and a lack of burn, means that gateway operators who would be advantaged to quickly stake a lot of nodes on a new chain can simply mint themselves as many tokens as they can.

It is very important to note, that this isn’t about net inflation rate, rather total concentration of capture of new token emissions.

What Pieces Need to Be Watched

Again, I don’t inherently see these as risks that can keep this proposal from moving forward, but there are some important questions that other node runners should be asking to have the full picture of the implications for the impact to their network work reward share.

The App Stake Amounts for Gateway Operators

Specifically, what is important for node runners to know is how many relays an application is entitled to with their stake. If a new gateway manages to come into the system, what is the maximum amount of relays that the gateway can send?

This isn’t magic, these numbers are knowable from on-chain data, but the changes made with Gigastakes do make the total possible amount of relays a gateway can send at a number that might shock everyone involved.

Will these parameters still remain in place?

The Relationship Between Gateway Operators, and New Chain Node Shares

The other piece that should be watched, and again, can be from on chain data, is if gateway operators also magically end up being the fastest and first to support new chains.

As there will be new chain incentives, the opportunity to game this system is at its strongest in the time immediately after a new chain launch.

App Stake Growth

Assuming that the solution for this would be to force the gateways to actually stake app sizes relative to service, the economic game would become that it is more beneficial for a node runner to pour rewards into more app stakes than staking more nodes.

What makes me a little uncomfortable is I called out this mechanism in some earlier protocol work, but that has seemed to disappear from the public GitHub repo on what was the V1 protocol.

I’m going to leave the math here, because I know that there are some brilliant data engineers in the community who are fully able to absorb and model these implications and bring this back to the community.

Economic Security Guarantees

The idempotency requirement however does not protect against the above when the
same actor controls:

• $50% + 1$ of the $S$ nodes in a session
• The application sending the requests

For a given relay chain ID, assume that there exists $a$ existing apps, and
there are $n$ total existing nodes already staked for the relay chain.

The probability of a single node being selected for a session should be
$\frac{1}{n}$.

As session selection currently happens as random selection with replacement,
then we can represent the probability of controlling the majority of a session
as the probability of having between $\lfloor \frac{S}{2} \rfloor + 1$ and $S$
successes in $S$ attempts of an $\frac{m}{n}$ discrete event, assuming that $m$
represents the total number of nodes that the actor has staked on that relay
chain. We model this using the binomial distribution, with $p = \frac{m}{n}$
and
$n \in \lbrace \lfloor \frac{S}{2} \rfloor + 1, \lfloor \frac{S}{2} \rfloor+ 2, …, S \rbrace$

$$
P_{MC}(m,n,S) := \sum_{k=\lfloor \frac{S}{2} \rfloor + 1}^{S}{\binom{S}{k} \left(\frac{m}{n}\right)^{k}\left(1 - \frac{m}{n}\right)^{S-k}}
$$

This is the probability of controlling a session for an arbitrary app. Assuming
that the same actor controls $a$ apps, then the probability that the actor is
able to fully control at least one session for their own application would be:

$$
P_{SD}(a,m,n,S) := 1 - \left(1 - P_{MC}(m,n,S)\right)^{a}
$$

Then given $R :=$ application/BaseRelaysPerPOKT, $B :=$
pos/BlocksPerSession, and $N :=$ pos/StakeMinimum, the cost of a configuration
of $a$ app stakes and $m$ node stakes, for which the probability of capturing a session
can be calculated via $P_{SD}$, is computed as follows:

$$
C(a,m,R,S,B,N,T) = \frac{100aBS}{R} + mN
$$

Economics Code Sample

from functools import partial

import numpy as np


def p_binom(n: int, p: float, k: int) -> float:
    return (
        np.math.factorial(n)
        / (np.math.factorial(k) * np.math.factorial(n - k))
        * p ** (k)
        * (1 - p) ** (n - k)
    )


def p_majority_session(
    nodes_staked: int, total_nodes: int, nodes_per_session: int
) -> float:
    start = nodes_per_session // 2 + 1
    end = nodes_per_session + 1
    binom = partial(p_binom, nodes_per_session, nodes_staked / total_nodes)
    return sum(map(binom, range(start, end)))


def p_self_dealing(
    apps_staked: int, nodes_staked: int, total_nodes: int, nodes_per_session: int
) -> float:
    return (
        1
        - (1 - p_majority_session(nodes_staked, total_nodes, nodes_per_session))
        ** apps_staked
    )


def cost(
    apps_staked: int,
    nodes_staked: int,
    pokt_to_usd: float,
    nodes_per_session: int = 24,
    base_relays_per_pokt: int = 200000,
    stake_minimum: int = 15000,
) -> float:
    apps_cost = (
        apps_staked
        * nodes_per_session
        / (base_relays_per_pokt / 100)
    )
    nodes_cost = nodes_staked * stake_minimum
    return (apps_cost + nodes_cost) * pokt_to_usd

print(1 / p_self_dealing(10, 150, 350, 24))
print(cost(10, 15, 0.07))

This work was about the economics of a node/app pairing gaining a majority control of the truth of a session, i.e. 51% percent control. In this case, this math is capturing the assumed cost of a network actor gaining that 51% control, but it can be easily extended to see the implications of how the current network stake topology could lead to outsized distributions of these newly proposed token mechanisms.

[Jinx (Chris Jenkins)]

This is the kind of math that honestly goes over my head, but I’d asked previously about how self dealing would be handled in the gatewayverse, since any gateway which is also a noderunner could theoretically route to their own nodes. This is one of the reasons that Shannon is so critical.

Thanks for the insight, Joe.

[jdaugherty (Jessica)]

Remember when we used to have protocol developers who understood math and cryptography? That was cool lol.

ETA: the current protocol team is very talented in their respective domains, but it’s hard to deny that we’ve lost some critical adversarial thinkers in the last couple of years.

[Lucky55 (Nick T)]

Governance of PNF

I can understand the nervousness of some of the community about giving any 1 Individual complete control over decision making, in my experience on boards, especially with startups, the board decisions are lead by the CEO/Founder and it’s is only an illusion of control in these situation, where an investor might have 1 board seat and easily out voted buy the Founding team.

Reserved Matters

What I believe could be more pragmatic approach could be outline the key areas, as ‘reserved matters’, these decisions would require a PIP, PUP or PEP in exactly the same way that it is required now, and have a ‘high water mark’ for what they are and also what they are not

As an example, what would NOT be a reserved matter

• Hiring/Firing Employees
• Making Day to day spending decisions
• Making Day to day business decisions in line with the core mission

As an example, what would COULD be a reserved matter

• Changing the core Economics Params (outside of agreed tolerances)
• Any single spend over $200k (or another appropriate threshold)
• Any disposable of assets or sale of IP

Advisory Board(s)

I would set up several, voluntary advisory boards with the purpose of helping guide the @o_rourke / Director(s) of PNF with key members of Gateways, PNF and the Community and Key Opinion Leaders (KOL’s.)

• Tokenomics
• Liquidity
• Marketing
• Development <Web3.0>
• Governance
• More++

If PNF was to adopt the policies and or ideas of the Advisory communities, there could be a retrospective remuneration process, as there has been for recent development updates from multiple parties.

Note: I would have a Non-exec chair (non voting capacity)/company secretary that would; arrange all board/advisory meetings, take minutes, circulate all information priory to each meeting, provide agendas and guide the meeting (while not participating), allowing all contributors to fully focus on the meeting at hand and not burdening them with additional work

Summary

I believe this would give @o_rourke/Director(s) of PNF control over all day to day decisions, allowing Grove, PNF and the protocol to ‘rock-and-roll’ and allow the community and more to add real value to the Key Reserved Matters

[TimRiggins]

I have an amendment recommendation:

Summary: Clear Eyes, Full Hearts, Can’t Lose

Proposal: Foundation Treasury Transparency Council

Objective:

• Enhance transparency regarding Foundation Treasury spending by involving the community.

Key Components:

1. Transparency Council:
   • Election of Members: Elect one or more community members to form a Transparency Council.
   • Access to Spending Details: Members will have access to monthly spending details.
   • Rationale Requirement: The council will obtain explanations from Michael regarding the fund allocations.
   • Community Report: The council will generate a monthly report to share with the community, outlining the spending and rationale.

The goal of this council is not to dictate spending, it is purely to provide transparency by a 3rd party

2. Accountability Mechanism:

   • Penalty for Unreported Spending: Any unreported expenditure by Michael or foundation members will be deducted from Michael’s compensation at a ratio of 1:1.2.
     • Example: For every $100 unreported, $120 will be deducted from Michael’s compensation.
   • High-Interest Loan Concept: This acts as a deterrent against unreported spending by creating a financial penalty.
   • Pre-Compensation Reporting: If Michael reports the spending before the compensation package is issued, the Transparency Council can:
     • Assess the rationale for keeping the spending private.
     • Determine the necessity of the expenditure.
     • Decide whether to remove the deduction from Michael’s compensation.

3. Suggested Lead:

   • Tim Riggins (alias): Proposed as the lead for the Transparency Council due to his impartiality and lack of personal relationships with Michael or the Grove team. Compensation is to be discussed. Both leadership assignments and compensation are to be revisited every 12 months.

4. Foundation commitment:

• Provide the council with a monthly balance sheet of treasury funds on the 3rd of every month.
• Provide a clear and simple financial report for the previous month on the 3rd of every month. For every business day report is not delivered, a 1% of the total monthly spend penalty will be deducted from Michael’s compensation package.

This amendment aims to ensure that all fund allocations are transparent and justified, fostering trust within the community while holding foundation leaders accountable.

[zaatar]

Defi Strategy and Liquid Staking: Why Wait?

@vojtech

I believe the DeFi strategy we have planned, combined with liquid staking (stPOKT), would catapult the price above $1 (pre-Shannon). Particularly, stPOKT includes some of the ideas you mentioned as part of this proposal; otherwise, it would not be attractive for retail investors.

If this strategy and liquid staking do not clash with Mike’s proposal, and there are no downsides, is there any reason not to proceed with these now, under Shane’s oversight as temporary director? If these catapult the POKT token price, pre-Shannon, to $1, the PIP-38 monetary milestones could be revised accordingly.

[h5law]

I am back, it seems Michael has verified my claims for which I was banned - unfortunately I am still perma banned from the telegram but as this is being fast-tracked to a vote very soon (just as I said about $GROVE and the fork plans maybe trust me on this one this time) I think its best I share my thoughts. Anyone who knows me knows how much I loved POKT - key word there LOVED. Past tense. Whatever this is now is not the Pocket I fell in love with, it’s not the Pocket that had tremendous amounts of promise. It is not, if Mike has his way, the:

Censorship Resistance Decentralised RPC Base Layer

That we as a community aligned around - PNF did not formulate

its own vision and road map

Rather we - the DAO, the community, the people building on top of this once promising protocol, we aligned on these ideals together. I have the utmost respect for the work that @b3n, @Dermot, @JackALaing did for this protocol and I was thoroughly ashamed to see them booted out of their positions because Michael wants power again.

In this post I aim to give my insights where possible and try to prove without a doubt not only is this a terrible idea, not only the end of the protocol, but with a few correct moves - something Michael clearly doesn’t understand how to do or those around him either unfortunately. I believe we can take the reigns back and push this protocol back on the right direction. I will call for some drastic changes, I may not say the things you want to hear but they are in fact the things you need to hear, we all need to hear these truths and really deep them. This is either the start or the end of Pocket and we need to make sure we make the correct calls - as a community, not a dictatorship lead by a proven incompetent leader.

Lets start with the very first point:

@o_rourke

• Grove has been focused on revenue, quality of service, and shipping Shannon

What drew me to start protocol development - no to crypto in general was Pocket so when I say this I saw it with true sadness in my heart. Shipping Shannon has never been a priority for Grove - not at all. They may have said all the right things, put up a front as if it were but hear me out now. I now work for Polymer Labs a mature codebase - they also started by building out a native L1, then pivoted to a rollup using a customised OPStack “Hack” utilising both Cosmos-SDK, OPStack, DA Layers - I hope by now this is starting to sound familiar to anyone who has kept up with the Shannon Development journey. Its exactly what we did - what I was a part of. When I joined the protocol team initially as an outsider working under PNF then slowly transitioned over to Grove (still paid half by PNF) until finally being hired fully by Grove I knew nothing. I had just taught myself to code, sure I picked it up fast and found it easy which helped but I didn’t know what a codebase 2 years under development ought to look like. Having now seen a codebase that has been under development for the same amount of time, is in its 2nd or 3rd testnet and mainnet soon approaching - that ALSO followed the same pivot journey that we did I know now what company focused on shipping a protocol’s codebase SHOULD look like that far in. I don’t even know how long Shannon/V1 was in development for before I got involved - but I know it wasn’t a short amount of time.

It really pains me to say this as I consider @Olshansky a good friend, but friendships aside for now lets get down to the difficult conversation. The time pre-h5law (AKA The Dark Ages) → V1 (pre-pivot/native L1/building cool shit) → Pivot #1 (Rollup w/ Rollkit on Celestia) → Pivot #2 (Cosmos-SDK L1 w/ RollChains integration for Celestia DA added security); in my eyes this journey demonstrates a clear lack of understanding of shipping a product - it even gives incompetence vibes. So much wasted time, wasted research cycles, wasted hires and fires. If Grove really wanted to ship Shannon I can see a few key points where things SHOULD have been done differently.

1. Fire everyone involved in the Dark Age period - they couldn’t deliver a thing and set everything back at least a year? (Correct me if the duration of the Dark Age period is wrong but the point sticks) - They were unable to deliver and to quote myself as it is truly the best thing about crypto (which I myself plagarised)

In crypto its not about who you are but what you can deliver

Simple as that if you cannot deliver you are worthless, nuff said. Its a shame, Its peoples livelyhoods you may say. If they wanted to sit around and not deliver, maybe read a cool paper and do some research go into academia, join a bigtech company. Crypto is different, maybe its why my generation (doxxing myself rn but I’m wait for it Gen Z) love it. Crypto should be free from the bureaucracy and bullshit you find everywhere else, instead it should focus on what started this entire industry - an anon fighting for ideals in a world that lacked them (big up Satoshiiii).

2. Rewarding the inability to deliver resulted in guess what, more ineptitude with regards to delivering the fucking product. For real if you continue to reward the people making decisions, failure after failure what do you expect but wait for it… MORE FAILURE.

Again it pains me to say this, it really does because I love the guy personally - even his knee high socks he’s so nice and caring - but Olshansky, if under management that cared about delivering the product would’ve been either:

• Demoted to an IC (Individual Contributor) due to his lack of result producing abilities as a leader, or
• Fired and replaced for someone who can focus and deliver

I can’t stress how much I love this guy, I genuinely am having difficulty writing this but numerous times Olshansky himself would ask me “Who do you feel like you work for?”, each and every single time I would reply “I work for the protocol, not Grove, I want what is best for Pocket Network” I was very often the one to challenge the team in their decisions - I was seen as the “voice of the community on the protocol team” and I was proud of that. I wish I could have done more to avoid the mess we are in now. I was against the pivot, I was against Olshansky’s push towards the OPStack (thank fuck we avoided that mess), I enjoy shutting people down I can’t lie it was fun to point out why all the ideas were dumb - I said lets either keep with V1 or use Cosmos-SDK for IBC. We settled on Rollkit because it was shiny - but it wasn’t ready for us so good thing we kept the backup plan of just using Cosmos right? Or is this something the Lead Developer, Staff Engineer, Super Senior He Could Date Your Dying Grandma Engineer, Lord of the Protocol Team, Chief Naming Officer (don’t get me started on our tiffs calling it Poktroll - especially now that its not even a rollup ) Big Man Oldshansky SHOULD HAVE THOUGHT ABOUT JUST A LITTLE. The idea was to pivot and ship ASAP, good intentions - yet another poor execution. It wasn’t ready for us, it set us back. If this was the only misstep it is absolutely forgivable without question. But if you look back through the timeline how many years, where Grove supposedly focused on protocol development, were wasted due to poor decisions, poor execution and just plain ignorance on how to ship a protocol.

The reason this statement doesn’t sound correct is because in reality Grove never was focussed on shipping the protocol, maybe they would have hired more than 5 people to work on it. Maybe they would’ve used the DAO rebate to fund it - not just one of the following:

• Line their pockets
• Recoup tokens paid out to initial investors (a refund of sorts)
• Fund their Gateway (probably the most likely as the majority of the developers at Grove work on the Gateway)

Its not nice to say but let’s be real, when you’re startup becomes so uptight that being blunt, slightly dismissive of others, or fucking straight up rude and mean to others is more important than shipping your forever SOON™️ protocol release things have gone terribly wrong. Just to be clear here I was the blunt, dismissive, rude and mean one. I admit it but I am of the opinion that if you are becoming corporate before you’ve launched your fucking product thats a sign of bad leadership at all levels. So lets dive into that, leadership.

o_rourke wants to take control of Pocket, he failed miserably before, thankfully PNF picked up his mess and carried us somewhere respectable - a long way to go but god damn those guys did amazing work through bear and bull they shined. Big ups b3n, Dermot, JackALaing and Adrienne on god these guys did a lot if you cannot see that you are delusional.

@o_rourke

The key learning I have had over the last two years is that the price of $POKT is the ultimate arbiter of our success

@Cryptocorn correct me if I am wrong but wasn’t it under o_rourke’s initial tokenomics that the protocol was able to be bleed dry by mercenaries. The 1000% or whatever inflation Pocket came out the gate swinging with does not give me any hope that this guy knows a think about tokenomics - in fact it proves he knows not a thing. Read a book or something, read the forums, get active in the community and you (o_rourke) might realise this community IS INCREDIBLY KNOWLEDGABLE ABOUT TOKENOMIC AND ECONOMIC THEORY IN GENERAL. We have big brains like Cryptocorn and @RawthiL and others I am sure I’m omitting. We DO NOT NEED SOMEONE WHO NEEDED TO SELL HIS OWN HOUSE TO SECURE FUNDING FOR GROVE IN CHARGE OF THE TOKENOMICS OF THIS PROTOCOL. That is literally the dumbest thing we could do. Lets dive into that:

• Start company → fuck up tokenomics → push it onto someone else (PNF) and pretend to focus on protocol development
• Lie to everyone and focus instead on building out the Portal Gateway → Secretly integrate with other protocols → Give minimal resources to the team that you say are your priority → Hide from community for years and lie to them until called out publicly and are no longer able to hide from the mess you’ve made
• Decide forcing PNF to step down by threatening a fork (which would be the end of Pocket hands down) → Also consider launching $GROVE → Take 2? Maybe the community will respect you this time around
• Scrap that because community didn’t like the lies and deceivery → Instead ask to be voted into full control → No more paying the protocol → Take more money from the protocol with no promise of any return → Should I even continue at this point

o_rourke I once thought you seemed calm but more and more you seem in way over your head. I would never trust you with any authority or leadership in this ecosystem, if anyone does they are blind as to the mess we are in. YOU ACTIVELY SPOKE WITH INVESTORS ABOUT FORKING POCKET WHY, WHY, WHY SHOULD ANYONE TRUST YOU?

@o_rourke

1. An incentive-based compensation package based on shipping Shannon and the price of $POKT

Lets chat on this: Instead of paying Grove who has failed miserably to ship Shannon - but like every other company got lost in the AI sauce, was misguided time and time again and displayed a complete lack of competence. Maybe heres a crazy thought - lets further decentralise the protocol. Fire the entire protocol team, anyone who wishes to stay now must work for PNF - the beef between Olshansky and others at Grove with @poktblade needs to be squashed because I think he should be on the protocol team ffs its silly how you don’t like the guy on god.

Im deadly serious reinstate all of PNF immediately, transfer control of the protocol team to them - if that means smaller wages so be it. I can find talented devs to come on. People who care about the protocol are more likely to work for a little less - who knows if we chuck in forcing you to resign we might see a price boom as investors see us cutting dead weight o_rourke would you even consider that? I mean if you truly care about Pocket you must be able to see your influence on the protocol has been a net-negative undoubtedly, irrefutably.

I will stop here for now and continue later. But I’ll end for now on this - I love this fucking protocol, I was devastated to leave working on it. But holy fuck what a mess you have made big boy, now its time for the adults to come and clean it up - sorry if I hurt anyones feelings in this post (I am not) I am expecting another ban from @Jinx for once again speaking the truth (fr tho unban me Michael admitted to all I said you’re being childish). I hope I can convince some people to see the light and take the steps we should’ve taken years ago. Had this been, dare I say it, Web2 Michael would’ve been replaced the dev team cycled through for people that can ship a product and we would all be enjoying Shannon not just starting to discover the mess o_rourke has made in his diaper. If even a single person tries to say this is strawmanning grow up - read the text and you will see I have simply spoken the unadulterated truth, my way.

Look out for part 2

[ethen]

I’m totally back for this.

I’ve been telling you all time and time again that things were not right here. And as simple as it may seem, really thing about this, like seriously - if someone can’t even implement a proper logout flow and/or can’t fix it in a day or two, what makes you think they can build a whole protocol?
Sometimes it really is just that simple.

Problem is no one wants to work to grow $POKT because Grove owns too much of it. Why would anyone want to grow Groves bags.

Most of the good people here have moved on, and it was the teenagers that left first. LMAOOO

[h5law]

Its because young blood hasn’t got time for the older’s outdated mindset. Move fast (don’t break shit build shit) this aint 2000 anymore big man do things properly and do them right - first time preferably @o_rourke its just a little sad asking for a what is it now 5th chance/bailout/takeover however you want to phrase it. If you were my age you would’ve learned this lesson from fucking Pockémon of all places. If you love something let it go - let it grow and find its own path. Sometimes stepping away from something is the best thing you can do for it.

There were smart young guys in pokt, @addison @pierre dipped for greener pastures when they weren’t taken seriously anymore (AFAIK). Time for a new generation - don’t make us be the ones to do a CTO and fork the protocol from you. If we dropped the AI play and left that for the future when it might (if it ever will) be used Shannon would be going through serious testnets. The more I think about it the more I think its a good idea. Just as you forced out PNF we should force out Grove - tbf I’ve only ever heard complaints about Portal from people who’ve used it, myself included ahah ironic a little.

Maybe I’ll come back fork it call it something decent and get back to work on the things I built in the first place lol - SMT is my baby I built what you’re trying to pattent with the ProveClosest method maybe I should just beat you to market and we can see who does it better. The company struggling to raise or the dude doing it in his spare time for free ahahah - IK one of those two will ship a better protocol to be built ontop of with stronger tokenomics and the other will continue to lie, deceive and do all they can to have some power. You decide… Who’s who?

[Cryptocorn]

I’m going to remind everyone that in the forums we expect everyone to stay on topic and discuss the proposals.

No personal attacks.

If anyone wants to go insult people, go to 4Chan.

If members have a point of view and want to discuss the topic, you’re welcome to be as negative and dissenting as you want, but be respectful.

I don’t get paid to Mod, I’m doing it as a volunteer and while we are all frustrated, let’s not take it out on others in the community please.

[h5law]

Could you please tell me the difference between censoring a post containing valid points and a personal attack? @Cryptocorn I feel like I am being personally attacked by the Pocket Community firstly for calling out the truth of Michaels intentions which he lied about - turned out I was true about that.

Now I speak my mind in a supposedly open forum raising genuine points and critiques of a failed CEO and the crippled protocol team. Maybe I said it a bit crass but is that grounds to stop people from being able to read my comments and come to their own conclusion? I mean we allow all sorts of people I personally wouldn’t be caught dead associating with in this community but suddenly you can’t take valid criticism (that actually praised you IIRC) from someone who like most people here have been burnt my Michael’s literal defrauding of the entire community with his lies.

Yet for some reason his incessant lies, hostile take overs and outrageous ineptitude (not personal insults these are backed by his track record) do not class as grounds to do any of the following:

• Force his resignation for failing the protocol
• Permanent Ban from the Community - including the forums and that means removal from voting too
• Maybe just take down this ridiculous proposal for a start while we work on the rest?

I’d rather not rewrite my post so if you can I kindly ask you return it to where it belongs and allow people to make informed decisions, we are all grown ups here. Treat people like children and no wonder they get fooled like them. Treat them like adults and they suddenly stop tolerating bullshit from serial frauds and wholly inept individuals.

[Cryptocorn]

Anyone can come to the forums and criticize proposals all day long.

We prefer to keep things pleasant in the forums and discuss actual details, proposals, and find answers. Raging is for the Telegram and blind rage is for 4chan.

You have valid criticisms to share and the community would be better off if you can share them in a calm, respectful manner so that they can be intelligently debated.

I personally have no beef with you and would prefer that to continue.

And on a side note- I appreciate your kind words for me.

Let’s keep the adult discussions in the forum and shoot from the hip somewhere else.

[iannn (Ian)]

I’m just going to point out the elephant in the room: Illusory Autonomy

The protocol has always been centralized under PNI’s full influence and control. There has never been a time that PNI could not make a change and enforce it fairly quickly. This is evident in the current scene.

Grove: “we’re going to push through a proposal whether you like it or not”
PNF Directors: “we believe you” - resigns in mass