Regulating Sockets (REGS)

Proposals Pre-Proposals
1

Regulating Sockets (REGS)

Attributes

Author(s): @Cryptocorn

Recipient(s): PNF

Category: Governance Upgrade

Implementer(s): PNF

Asking Amount: 0

Summary:

While having a low bar for plugging into a Socket is desirable to ease friction and try many and differentiated ideas in a lower cost environment, there should be some minimum standards needed by socket applicants to show that they are genuine in their efforts to help the Pocket community and understanding of Pocket’s needs, applications, and strengths, so as to discourage and prevent opportunists with low or no skill from making minimal contributions to the Pocket Ecosystem at Pocket’s expense.

Background/Motivation:

PNF seeks to encourage contribution to the Pocket ecosystem with a quick, low friction program which errs to the side of inclusion and project acceptance to promote a wide range of contributors to join and be part of the Pocket ecosystem.

While this proposal believes that low friction access to grants (Sockets) is a great way to encourage community participation and experiment with a broad spectrum of ideas, many of which will knowingly be high-risk and ‘fail fast’, we believe that there should be some guardrails in place to stop opportunistic low value contributions from those with no knowledge of Pocket or interest in its long term success.

By setting up minimum standards we can better ensure that Sockets are awarded to those who are genuinely interested in furthering Pocket and discourage opportunists or ‘grifters’ from accessing DAO funds.

DAO funds are limited, and should be spent on worthwhile projects. Each payment that goes to a Socketeer that is then immediately sold to stable coins is downward sell pressure on $POKT and should be mitigated against.

Rationale:

We should implement the following requirements to be eligible for opening a Socket (to be debated in pre-proposal before being aligned and fixed at the proposal stage):

  • Socketeers must have spent at least 6 months in our community, defined as being a member of a major Telegram group - the Den, poktoprice or a Node-runner with over 1m million $POKT staked Telegram channel, or being in the official Pocket Discord.
  • Payments are to be made in $POKT only, with half the $POKT awarded to sit in escrow for 6 months before final payment.
  • When the 3D Governance/Creds system is set up, Socketeer must be a participant and have gained a minimum level of Gitcoin membership and voting power.

Implementing these simple rules will help deter those seeking to offer low quality work on an opportune basis. This pre-proposal welcomes additional suggestions for the ‘minimum bar’ needed to apply for a Socket.

Dissenting Opinion:

“Socket are designed to be frictionless, this hampers that goal.”

This proposal seeks to balance a system of low friction access to try novel and potentially high-risk ideas with some safety towards protecting DAO funds from bad actors. Any serious potential Socketeer should already be an active member of our community, and if they have not shown involvement and understanding of Pocket, they have the ability to introduce themselves and their ideas to the community and demonstrate their interest and knowledge of Pocket.

Delaying partial payment of funds should only be of concern to those who do not intend to hold POKT and want to quickly cash out. Forcing Socketeers to hold 50% of their payment in POKT is designed to be a parsing mechanism to weed out opportunists and reward those who believe in the long term success of Pocket.

Implementation:

PNF (I assume B3N who is incharge of Sockets?) will need to check and confirm applicants are eligible to open a Socket based on the final criteria. Rewarded POKT can be held in a separate wallet for the escrow time period before being divested to the recipient.

Open to GRIP involvement and help.

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As a Socket participant, I personally see potential value in this. Especially good point to encourage being part of governance, since getting qualified should be very straightforward with the new direction.

I thought that was the standard already, but if not, clarifing it makes sense.

I don’t agree with the need for this point. If someone doesn’t do work, PNF can easily step in to make sure funds aren’t going to any who don’t do the work. If someone does the work, delaying payment doesn’t increase quality. If anything it may have the opposite effect, so I’d lean towards not having undue payment complexity.

Open to defining what qualifies are a POKT contributor. Not sure if it should be 6 months (which seems like a long time), but some kind of “proof of contribution” could make sense. However this may seem like resident requirements if they already have to be part of the DAO. That could be qualifying enough IMO.

I think PNF should have the ability to green light high value exceptions though, but a general standard could make sense.

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It’s interesting to set up some low level friction to the Sockets. Participation in forums, discord or telegram would be easy to check, and it would be best to require a minimum of Gitcoin level also, to avoid civil attacks.
It is difficult to regulate this system as its objective is to be frictionless, while I’m in favor of setting some barriers, I would like to know PNF opinion on the subject and if this would change the expected outcome of sockets.

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Thanks for the thoughts guys.

I’d like this proposal to be about discussing the above, the numbers/ideas are not set in stone and I definitely welcome everyone to give their opinion on what they think the amount of ‘friction’ should be to deter bad actors without being unduly onerous on good actors.

I’d remind everyone that remember that Sockets are only up to $2k in value, and that PNF has POPs and Other mechanisms, including direct funding to fund anyone they personally think is high value but may not fulfil all the needed criteria. However, I think that should be the exception to the rule - that PNF can waive requirements for high value opportunities, whilst maintaining a minimum threshold to deter low value work.

In response to PNF being able to withhold funds- yes, this is true, but it tends to lead to a pretty ugly situation with all that can entail and I think it’s better to filter applicants somewhat before they start the work, than if they contribute low value work and then are not paid and want to retaliate against Pocket in some way.

6 months may be too long - I think 3 months should be the minimum though.

Forcing Socketeers to hold Pocket stops them from immediately dumping the Pocket on to the market and so they have to have some faith in the future prospects of Pocket as they now have a financial interest. I think it ties them into the ecosystem.

What are people’s thoughts on the Socketeer needing to show that they have staked a certain amount of POKT? So already financially invested in Pocket. If one would argue that that stops new talent helping to build, i’d point to PNF being able to fund or use other mechanisms for any exceptionally good program?

Any other ideas on what Guardrails should be employed in the Sockets program?

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I don’t see how $2k in value is considered “dumping”. For large ticket items, I can see PNF using mechanisms to ensure large amount of POKT don’t effect the market… but trying to regulate such small amounts makes no sense. The argument for this proposal was to establish a quality standard… and regulating to this level does not have to do with the quality of work IMO.

Saying to someone who did quality work “we’ll pay you… but primarily in drips, in future, for the work you already did” does not drive affection for a project. I see that actually driving builders away. I believe more people will commit to building if they are rewarded in real time vs fractional plans that take unnecessary time to recoup.

If we are talking about incentivizing quality of work, then trying to regulate to this level is not the way to go. I would focus on the other points if you want to increase quality of work.

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I’m going to include this in the community call accouncements this week, @cryptocorn I’d love if you can talk for a couple minutes about the project and then we can point people to this forum post to discuss.

If you can’t make it, I’ll do a 1m overview and then point people here.

I’d like to chime in but want to see the general community sentiment before adding my voice.

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I think I missed the community call but I am not really in favour of the locking funds away part. If someone does the job they are being paid to do - let them get paid.

I am very much in favour of the minimum level of participation in the new governance structure tho, that is a very good idea

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I agree with this,the network gets more attention,innovation or creativity filtering through it .

IMO,It would be more productive to find a mechanism of filtering which sockets make it to get funding rather than who opens a socket as talent, innovation or creativity reside anywhere.

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