As per our resignation notice, this project has fundamentally changed and I can no longer support it in good faith any more
3 Likes
I think if I wrote out everything I was thinking, it would mirror much of what was said here, so I wonāt duplicate the effort, and just say I broadly agree with these thoughts.
2 Likes
Your work and pragmatism are deeply appreciated here, Adz.
6 Likes
As others have pointed out, this proposal isnāt perfect. But Iām in favor of it for one reasonāaccountability. There is a ton of talent in the community, but nobody has stepped up to take personal responsibility for getting the token price up and getting on T1 exchanges before. We have had PNF, the DAO, and Grove (formally PNI), all responsible for different aspects but again, no truly responsible leader. In the best cases, this has slowed decision-making. In the worst cases, it has led to finger-pointing and now, potentially community fractures that canāt be repaired.
At the end of the day, itās outcomes that matter. The way I read this proposal, @o_rourke is saying heās willing to take personal responsibility for very specific outcomes. So, to me, the question is twofold - is Michael the right person, and/or is there someone else who is willing, able, and better qualified? It seems to me that we should each ask ourselves those questions before any of the above-mentioned concerns are considered.
4 Likes
I want to reiterate here that there is a clear separation of who would be on the Foundation (myself) and Grove working on itās on deliverables. Grove is not going to be part of the Foundation. As outlined in the post as well as in the community call, I believe that the best path forward is to have unified and accountable leadership.
There is precedent for this, some successful, some not. While the scenarios are different, Rune coming back to Maker and Ilya going back to the Near Foundation come as recent positive changes to their respective projects. cc @coffee-crusher
1 Like
Thanks for calling this out. Based on feedback during the community call and conversations after, Iāve amended the proposal to put the DAO on pause for 24 months, at which point the DAO can then opt to replace me or add new directors.
If this passes itās through social consensus, and ultimately the community can choose to fork the protocol or take it over via consensus within the timeframe should you choose to.
1 Like
Personally Iām all for aligning everything to make the price of $POKTthe North Star, with this in mind i would tweek the remuneration for @o_rourke I would amend that the price targets be the Avg trailing 30 day price.
1 $0.40 48,000,000 POKT
2 $0.70 48,000,000 POKT
3 $1.30 48,000,000 POKT
4 $2.50: 98,000,000 POKT
5 $4:90: 98,000,000 POKT
The increases 2x at each level
1 $0.40
2 +$0.30
3 +$0.60
4 +$1.20
5 +$2.40
I would also add a lock-up to each tranche, as when @o_rourke hits the targets there will be 1 person with a very large position in $POKT, if not Michael who else
Iāve also moved the goals from the typical exit levels of $0.50, $1.00 as we will need more of a āpushā on the bids to stay over these levels
2 Likes
Disclaimer: Intentionally, I call Grove āthe founding teamā, because thatās ultimately who they are (or at least whatās left from the founding team).
The founding team has received a large number of token allocations as part of the initial supply. That alone should be enough to drive them toward building a better protocol. Itās also worth mentioning that the founding team received an extra $7M+ for delivering the protocol upgrade, is that right?
The founding team also took away the portal they had built as part of the protocol, built a business on top of it, leveraged the brand of Pocket Network, and monetized the traffic as the only protocol gateway at the time. The founding teamās position in the Pocket Network also played a role in the funding round, which helped them secure capital for this new venture. As you mentioned, the founding team now has a business with a $1M ARR.
So, why do you need more tokens to deliver the protocol upgrade that should have been delivered a long time ago?
Also, during my brief period at PNF, I noticed some strange things. Specifically:
- When there was a critical issue with Pocket Wallet, no one from the founding team stepped up. Instead, their response was kind of, āNot our problem,ā and they delegated it to PNF, knowing that PNF did not have any engineers.
- When we discussed sharing gateway metrics with PNF to better understand the actual protocol performance, all gateways were welcoming towards that, except the founding team.
That above was a bit shocker to me, because I always thought the both teams are working closely together. Maybe you can explain why the founding team turned their backs on the community/PNF in these situations?
On a positive note, I believe you, as the sole director, might change the founding teamās behavior towards the community/PNF and encourage them to work towards higher goals rather than solely building a profit-driven closed-source entity.
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.
My question is, in this hypothetical scenario, how do you ensure that the distribution of nearly 100M tokens is fair? Consider that thereās a small group of people who can get things done and deliver the underlying solution that will help POKT scale the number of holders from a few thousand to 200k+, moving the price above $1. Obviously, there would be more people involved (community, marketing, BD, you as the only one who can push protocol parameters through, etc.), and I am unsure how you want to measure the impact of each contributor. I think it would be helpful if you could take this hypothetical scenario and explain your thinking: how much would you reward those who build it, those who support it, and yourself as the sole director who can make things move quickly?
And my last question, @o_rourke , on the call you mentioned you still have more than a half of your allocation. Would you consider āre-vestingā your tokens in time-locked (or streaming) smart contract when elected as a sole decision maker?
1 Like
Thanks for the feedback - Iāll give my thoughts on each one.
This doesnāt address the conflict of interest concerns. For example, if I were to step down as CEO and be chairman of the board, I would still have Grove equity. In the community call I mentioned that 95% of my time would be spent on the Foundation. The rest of my time would be spent either in a monthly board meeting or high level strategy discussions for the company. It is in good hands with the current leadership. In addition, the POKT grants help reinforce my incentives for the network, not just Grove to succeed.
I should clarify, the POKT for this proposal isnāt going to me - my intention is to distribute it to everyone who helped build and participate in Shannon. Yes, this includes Grove employees but also everyone else who has participated up until now and moving forward. I donāt intend to take any for myself in this distribution. The same goes for the price based milestones. While I am taking accountability for it, I am not single handedly going to drive the price up myself. Itās going to require the work and coordination of many people participating in the effort.
Based on this I donāt believe itās needed to tie success to a listing. I would argue (to point #4), to get to those price points a T1 listing would be a part of that journey.
We should have it suspended until Shannon. Launching Shannon with a 1:1 burn/mint is the right approach. It is very easy to determine which gateways are attempting to game the system based on self dealing and the Foundation should remit airdrops to honest gateways until we have a trustless solution.
Iām not convinced this is needed. Everything in the proposal related to marketing and economics will help drive the process. There are many different factors that result in a listing, but if you can boil it down to one metric, itās demand for the token. The goal is to start that flywheel outlined in the proposal and evolve from there.
I added a two year time window per feedback from others. As I mentioned in another response, the nodes on the network can choose to take over consensus at any period of time and take control of the protocol parameters. I view this as the ultimate fallback and is part of the beauty of blockchains. Itās social consensus that drives this, as through this eventual vote.
3 Likes
Thanks for the feedback and yes I tried to front run most of what I thought could be said as a dissenting opinion, though there has been some valid feedback since posting.
I think Iāve touched on many of your thoughts and observations in other responses but to recap:
-
Iāve said this in other responses but I hope everyone understands that this isnāt something that can be tackled alone. Whether itās existing Foundation contractors or pulling in others. It canāt be done alone.
-
Iāll have oversight directly from the folks working on the Foundation and given the same level of transparency I am committing from the community as well. In my working history with @shane and @Adz, they would raise hell if I was doing things outside of their own expectations and integrity.
-
I am assuming to hit these price targets weāll have been listed in T1 exchanges
-
I believe that the 30 day trailing average (will edit @Lucky55) is sufficient to avoid any kind of manipulation.
-
I am happy to put a 4 year vest with one year cliffs (will edit cc @vojtech) on any POKT that I earn - though I would not feel comfortable impose that restriction on others
1 Like
Are you being ironic? The one thing most clear in this proposal is the opposite. The proposal gives Michael complete autonomy, the opposite of accountability. Even if he makes the best promises in the world, they are just promises, and there is ultimately no accountability if he is the only director and if the DAO has no control over funds.
That is a very fair request. I would still be extremely leery of giving all control to one person, but at the very least that would paint this entire proposal in a completely different light. Given the choice between doing whatās best for Pocket the network and giving a competitive edge to Grove, as long as he is CEO we cannot expect him to put the network first.
2 Likes
Theoretically speaking,there would be nothing preventing a centralized RPC provider from forking Shannon and running it on their back end instead of just running the gateway serverā¦
Let me start by saying my comment is not about Mike @o_rourke per se. Iāve always disliked when people insist on telling me what I can and cannot do. You are not me; you do not know or comprehend my tolerance level. Only I know whether or not I have the will to persevere in anything I put my mind to. For this reason, I will not dwell on whether Mike is capable of handling the tasks he proposed.
However, I urge the DAO to reject this proposal in its current form to remain consistent with how we have approached every other proposal of similar magnitude, such as C0d3rās recent proposal and CREDs. There are too many moving pieces all bundled together in one convoluted proposal. Mike is free to submit a proposal for each item independently so the DAO can discuss and vote on them separately, or we can consider the following:
I posted this yesterday on the DEN, but here are my recommendations on how we can move forward:
- Elect three new board members at PNF, ensuring the following skill sets are covered: legal, tokenomics, and technical.
- Mike can post a new proposal for a vote where he can ask to be elected as a trustee for the DAO or any title we decide upon, operating between the DAO and PNF.
- The DAO would grant Mike a total of six months to enact each of his ideas. He would need to get a quorum with the three PNF directors to move anything forward. This structure will add checks and balances.
- The DAO should use the token price, as Mike suggests in his proposal, as an indicator of whether his plans are effective or ineffective. This would require the DAO to step back from certain decision-making processes.
- The DAO would retain the ability to vote on key changes and the ability to override decisions made by both PNF and Mike if they do not align with our vision.
- Each board member will form smaller teams (agencies) with community members who have similar skills to assess any proposals and address unforeseen issues. For example, @Shane and @Rawthil can form a team to handle all things related to tokenomics.
- All decisions will be posted on the forum for transparency, allowing the community to assess them. It will be the duty of each board member to defend any scrutinized decisions in writing to the DAO.
To summarize: Mike only needs to convince three elected individuals to get behind his ideas instead of the entire DAO. I believe this is both fair and just. It incorporates @Jinx 's idea for a DAO trustee, gives Mike the freedom he needs to be effective, while the power of the DAO remains intact. This approach is similar to how the United States government operates. We, the voters, elect members to the three branches. They vote on ideas in accordance with our desires. After the Supreme Court members vote on an issue, they independently write an opinion piece explaining their vote.
10 Likes
Providing a concise answer is challenging with so much to address, so Iāll begin with a brief introduction that serves as a TL;DR. I hope this helps readers understand and engage with the longer discussion to follow.
This post should be a 10 - 15 minute read (depending on the readerās fluency).
General Thoughts
Despite the challenges and reservations, I ultimately support Michaelās proposal. Given the limited options available, this course of action appears to be the best choice we have.
Since I started to participate in the POKT community, I have met two different kinds of people: the builders and the crypto venturers (who come in very different colors).
Builders (among whom I like to include myself) do not really care about price. Well, we care, but it is not our main focus. We build solid stuff and think about details and edge cases. We prepare the rocket to get to the moon and make sure that if you put fuel in it, we will get there. But we leave the fuel to be provided by others (or hope that it spontaneously appears in the tanks).
Our builders have designed a SOLID protocol. Shannon code is top quality, based on formal theory, and designed to be easy to build upon. The tokenomics in the work for Shannon will encode the golden promises of crypto: permissionless participation, self-sustainability, and supply stability (or even attrition, wrongly called ādeflationā). Sadly, the price does not care.
Something I learned from getting deep into economic theory (deep for a non-economist at least) is that POKT price cannot (currently) be logically pressured to increase its relative price against a foreign currency (a.k.a. ānumba go upā). We need more paid relays, and we donāt have them; thatās it. Stop asking for tokenomics miracles.
The second group of people in the community, the crypto venturers, mostly care little about tech and only see the token price, the total supply, and the APY. These are the guys providing fuel to our rocket (because someone has to pay the bills of devs and node runners). Among them, there are some knowledgeable people who seem to understand the price whimsical actions better than what economic theory can explain. However, in the POKT Network, we decided not to listen (me included above all probably) and head on the buildersā path. This seems to be a bad decision, given that fuel is not getting into the rocketā¦
This brings us to a crossroads. We could stay stoic on the buildersā path, retain our DAO, and slow but highly consensual movement or jump into the uncertain and highly dynamic world of crypto venturers, adapting to their liking in hopes of bringing more of them on board. It goes without saying that taking the latter road is incompatible with keeping a fully operational DAO and PNF, as it requires many fast decisions and mostly a responsible one whom we can blame if we lose the bet.
For me, the buildersā path has been walked for about a year and a half. We improved our metrics and laid the ground tokenomics values for a healthy ecosystem. The result was price volatility and complaints every time the price was not going up. The promised land of mint=burn is still far on the horizon (~25B relays per day), and the community starts to wonder how much runway we have left. And me too. Staying on this path is the less stressful but might lead us to a heat death scenario.
The other path is starting to play the game of the community that is most likely to give us fuel for our rocket, the crypto venturers. It means that we will let go of some economic variables (mainly token emission control) in favor of creating appealing numbers of APY, which could in turn create an upward trend in the token price and keep feeding this with new capital inflow (new chains/servicers, new holders) hoping for a FOMO effect of high APYs and upward token prices. All this while keeping the supply growth restrained (as much as possible). In a few words, try to go back to the game that took us to ATH, but this time without a DAO to let us hit the brakes discretionary and fast. All that we need to do is to give up our vote power and have a victim to sacrifice if this goes the wrong way (in the end, no one wants to be responsible for killing the protocol).
This leads me to a difficult choice, which is to take the second path and support Michael.
I cannot ensure that the buildersā path that I firmly defended all this time can lead us to the promised land. I still think that what we are building can slingshot us to Mars, but we need to get to the moon first. Being that the only way to play the crypto game is to be fast, I donāt find Michaelās demand of pausing the DAO irrational. Moreover, I would oppose passing any of these proposals if we donāt have a fast structure and a head to cut. Nobody is responsible for failed proposals passed with N votes, but we will have a sole responsibility in this case. That is the price Michael will be paying, being the sole responsible for losing this game and wrecking the ship.
Regarding how we got to this point, the resignation of the board and their performance, which I addressed in this other post, I will not comment any further here.
Also, the known and real threat of forking cannot be denied; it is not nice, but those are the rules of the game, as violent as they sound.
On the DAO and Reflexivity
The proposed economic path of following Sorosā reflexivity goes against everything I have learned about equilibrium, and I do not agree with it, so I wonāt go deep into why this is good or bad or how economically sound it is. Letās say it is a way of explaining some economic processes that are highly related to social science and that, sadly, seem to prime in the crypto world.
What I will argue here is that we cannot effectively implement the Reflexivity feedback loops if we keep a DAO voting over every decision.
I began to work in the POKT ecosystem when PNI (now Grove) and PNF were a single thing but were already starting to be formally separated. That year, 2022, was not a good one, with POKT price falling and supply growth running wild. The problem of the supply growth (āinflationā) was first addressed in the forum in 12/2021, the WAGMI proposal proposal, and it took 4 months for the DAO to deploy an answer to an evident supply growth problem, and its form was the PUP-13, a washed-out version of the original proposal. The DAO was late and wrong, passing a patch instead of a solution (what WAGMI proposed). This delay cost us a 60% increase in the monetary base. It didnāt take long to realize that we needed a solution, not a patch, leading to proposals that never came to be, like PUP-15 and PUP-15+ (naming conventions were not a thing yet, I think). Six months later, we ended up with a patch bundle called FREN (PUP-22). By that date, June-August 2022, the panic was on us, resulting in many more patchy things being pushed into the network, namely PIP-22 (this triggered my rage and initial involvement in the community), PUP-29, SER (PUP-30) and ARR (PUP-32), all in a single year (without counting unsuccessful ones). What Iām trying to highlight here is that despite the existence of a clear problem (supply growth, or wrongly called inflation), the DAO took a lot of time to engage and never produced a solution. It was only able to agree on patches that came in late.
Itās interesting also to note how the very inefficiency of the DAO to handle hype/FOMO cycles fueled by high APY/emissions led to the creation of ARR and posterior stability, which basically killed the feedback loop that Michael is now trying to revive. So, if you agree with Reflexivity or Michaelās plan, the DAO as it is now controlling every aspect of the network cannot function.
However, letās be clear that the ATH that was probably achieved by a FOMO that is explainable using Reflexivity is not guaranteed to occur again. In my opinion, it is more speculation than economic theory behind itā¦
Reflexivity and the Long Term
The proposed path is not sustainable in the long term; no hype cycle lasts forever.
I think that, if deployed correctly, this path can lead to new buy-ins lured by higher APY (fed with higher supply growth) and kept in the ecosystem farming yield and airdrops. Higher buy-ins will help with liquidity, liquidity with exchanges, and exchanges with Moon. But it wonāt last.
We are buying time here, and we will be buying it with dilution. There is an unavoidable end to the hype cycle that leads to the negative cycle. We donāt know when we will reach that point, but before that happens, we need to have grown our traffic. For you, Michael, the goal might be the token price; for me, it is the paid volume. Because I know that with enough paid volume, we will thrive regardless of the next shiny thing in the crypto venturersā minds.
So, whatever you do, the building and growth should not cease (nor change direction, in my opinion). I can accept giving you control over economic variables of the network, but I will keep being noisy on technical stuff because I think that we are going in the right direction there.
Narrative and Community Growth
This is not my strongest suit; in fact, I probably go by wearing a swim brief here (really? āSungaā is āswim briefā in English? I was hoping for āmenās beach thongā or somethingā¦ you English people lack styleā¦).
The problem of narrative has been a constant topic in the community. My understanding is that any decent narrative is regarded as fantastic if the price is up, but the same one is the root of all evil if the price is down. I think that there is only so much that a narrative can do to help a protocol, but if the narrative does not have the correct tools to operate in the target audience, we will always fail. I cannot say if the current narrative is good or bad; I personally think it is better than what we had before and much more concise and focused on our technical strengths.
Some of our previous public-facing numbers, which attracted the initial community growth, were based on things related to APY, relay volumes (which were not completely organic), and price trends. I donāt think that previous narratives were better, and they even cost us credibility (i.e., Tornado Cash, revenue calculation based on minting).
So, I think that the narrative will fix itself if the price goes up. The only thing we need to do is to avoid technical screw-ups. With this last thing, I want to bring up the role of AI that Michael is proposing to put at the forefront of the network. We worked a lot to keep the hype shit out of POKT Networkās approach to AI, and I hope that this is kept like this.
We do not have room for technical nonsense in our narrative after we have worked so much to keep it serious. You want to highlight APYs and other make-up numbers that crypto loves? Go ahead.
On the Role of Grove
I would like to express my opinions on some of the topics you touch upon regarding Grove:
The AI litepaper was not produced by Grove; it was an initiative of the PNF. It might show the values that Grove has for LLM inference, but it is only through the input of Olshansky. It is not as much from Grove as it is from the rest of the POKT Network.
It is undeniable that Grove (formerly known as PNI) has improved since it was separated from PNF. However, this development cannot be regarded as open. Groveās portal remains closed source, and there is no open information on how it works. This is OK; you are a private company. But I have many questions:
- Why have you closed the open data streams that fed POKTscan and allowed the public to see the stats of the network?
- Why refuse to provide very basic QoS data in the format provided by Nodieās Gateway server?
- Why donāt you provide data on incidents? I can recall two of them that made us work like hell and never got an answer. Never, radio silence from Grove.
This makes me wonder how open your decision-making process will be if we have you as sole director. Grove is not an example of transparency; ādefault to openā is not one of their values. This is especially important when you will be managing the whole DAO treasury, which will get bigger and bigger due to higher DAO allocation and supply growth rates.
How big will be the influence from Grove (employees or interests) in your decisions?
Proposed Actionable Changes
I will go one by one here:
Services per Node to 1
Thanks. I have advocated for this since 02/2023. It was not until Shane revamped the concept in GANDALF (a nice name goes a long way) that the DAO started to listen.
Sliding Supply Growth 5%->20%->30%->20%->30% ā¦
So, you propose to fix RTTM, wait until we go from the current 5% to 20%, and keep it there, readjusting to 20% every 6 months or when it goes above 30%.
The first thing that I see here is that you expect to see the relays go from 500M/day to 2B a day in the near future. If we fix the RTTM that produces 5% supply growth today, with 500M relays/day, we need 4x relays to get 4x supply growth. Or are you planning to hard reset it to 20% supply growth with 500M relays?
Keep in mind that if the DAO allocation goes to 75% but the supply growth is not at 20%, the node runners will bleed.
10x on New Chains/Services
I believe that you will keep an eye on them and do some due diligence before whitelisting new chains. It is not a bad idea, but everyone will want to be creating new chains to farm yield.
Gateway Fee = 0
LOL, what? I know that you were advocating for a reduction, but zero is just too much. We need minimal friction for fake relays. I really see no upside here. If you have to buy at least 5K POKT to stake a node, why not have to pay a little for the traffic you send?
This opens up the door to spurious traffic. Strongly against. It is a step backward.
DAO Allocation to 75%
Well, not a problem if we are at 25% supply growth. The node runners will earn approximately the same:
Today we earn 0.75*220K = 165K POKT per day, the same as 0.15*220K *5 = 165K (given that 5x220 is 25% supply growth). If we stay at 20%, node runners will earn less than today (unless POKT price goes up).
Also, regarding:
Adaptation: We will adapt this parameter to maintain Node/Validator inflation aligned with the current schedule as annual inflation is adjusted.
and connected to:
Keep in mind that if the DAO allocation goes to 75% but the supply growth is not at 20%, the node runners will bleed.
You plan to increase the DAO take as the relays increase to keep node runnersā income constant?
Reduce Stake to 5K POKT
I agree on this. The number of nodes makes no difference today; the staking amount should be smaller. Also, it does not affect block size too much, as far as I know.
Marketing Around APY and New Services
No comments, seems OK.
Reposition Brand AI-forward, Support Beyond RPC
I like this. I will be watching closely to see what you actually intend to do. There is not much information on what this means to you.
Compensation Package
Letās make a tableā¦
| # | Milestone | Reward POKT | Reward USD | POKT Market Cap Top # | Years to get there (pure speculation from me) |
|---|---|---|---|---|---|
| 1 | Shipping Shannon | 48 M | ?? | ?? | 0 |
| 2 | Price: USD 0.5 | 48 M | 24 M | ~65 | 1 |
| 3 | Price: USD 1 | 48 M | 48 M | ~30 | 2 |
| 4 | Price: USD 3 | 98 M | 294 M | ~15 | 2 |
| 5 | Price: USD 5 | 98 M | 490 M | ~10 | 3 |
The first milestone is not a valid one, in my opinion. The DAO already paid for that, and I donāt see how you being in charge should affect its development. Maybe something above the mere shipping, like an increase in relays (new ATH), could be rewarded.
Milestones 4 and 5 seem too much, in my opinion. Maybe Iām too poorā¦ Why is the reward in POKT doubled when the POKT price is multiplied by 3 between milestone 3 and 4? Is that a typo? Are there examples of such high rewards in the industry?
NOTE: After I wrote this Michael clarified that the tokens are to be shared among many participants involved in the fulfillment of such milestones. In that case the new question would be, whatās the maximum Michaelās take on these tokens? because they are pretty high nonethelessā¦
Closing Remarks
Wow, you read the whole thing? You have my respect. Wait, you skipped to the end to see some elevated conclusion? Shame on you!
Well, there is not much else to say. It took me ~5 hours to write this. In the meantime, the Poktopus Den produced ~900 messages that I wonāt readā¦
I donāt know how much time we have to keep discussing this, but there will not be much time given the current market volatility. We better make up our minds and try to bring calm toā¦ us? as soon as possibleā¦
13 Likes
@AmishBatman, who else would be responsible if @o_rourke is making all the decisions? Thatās accountabilityāyou can have autonomy and still be accountable.
2 Likes
Yāall 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.
Iām also surprised to see the lack of appreciation on Ben and Dermots post. Actually, maybe Iām 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!
3 Likes
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 Mikeās 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 @shaneās 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/Constitutionā¦
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
5 Likes
A summary of my thoughts:
- Whatever the backstory of mutual loss of confidence in each other between OāRourke 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.
- If OāRourke 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 OāRourke to trust the DAO to not use itās supermajority vote to oust him without extreme cause or to use itās majority to capriciously override his funding and parameter choices. The call to āsuspend the DAO,ā 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 OāRourke and the DAO in case things do go south in the future (see below)
- 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 OāRourke 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 OāRouke 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 OāRourke 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 āsole directorā does not have meaning within the constitution. The addition of the word āsoleā is unnecessary and could lead to constitutional challenges.
- Wording the proposal to include any action of the nature of āsuspend the DAOā does not have meaning within the constitution. It is unnecessary and could lead to constitutional challenges.
- By āconstitutional challengesā 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, OāRourke 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 everyoneās 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 communityās interests. None quite hit the mark yet and work should continue over the next few days on this front. In addition, if OāRourke 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 Jackās 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 OāRourke to purchase $POKT from the PNF treasury at various price points and vesting at certain milestones. E.g., vesting immediately could be options to āpurchaseā (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 OāRourke from the DAO, as certain options could vest day one and arenāt 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 OāRourke 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 OāRourke no matter what; the control of the second portion would either be with OāRourke, 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 donāt see any conflict between him leading PNF and Grove simultaneously. I saw Jackās reference to Article 4.6. Iām not sure yet the relevance of this article to OāRourkeās executive position at Grove; Iād have to see the exact wording of the article. Note that āwithin the DAOā does not on face value mean āwithin the Pocket ecosystemā.
- 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 donāt 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, āLaunching Shannon with a 1:1 burn/mint is the right approach.ā 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. Thatās 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 āforcesā (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 OāRourke as PNF director (or even if he is not a director) is not a problem constitutionally. Itās a very simply PUP that doesnāt 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/OāRourke would have discretion to set the parameters only within the sandbox that the DAO defines. I havenāt 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.ā
-
- "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.ā
-
- "GatewayFeePerRelay shall not be set lower than $0.00000085. That being said, PNF is empowered to use itās treasury resources to offer rebates to gateways to offset this fee during the first 6 months of service.ā
-
OāRourke 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.
7 Likes
Good call out - Iāve 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.
1 Like