Serious Issues with POKT Governance and Voting Around Proposals

Been lurking here for some time watching the development, discussion and voting process around various proposals and it is causing me to have serious concerns about flaws and shortcomings in the Pocket Network governance process as follows:

  • If you look at all the snapshots to date, there have been a maximum of 8 participants voting and more often than not typically only 4-5 participants. This is a disturbingly low number to control the fate of the entire project that represents itself as a DAO.

  • The majority of the snapshots / votes are decided by a rotating cast of the same 5-7 participants (as far as I can tell) and who don’t seem to reflect an accurate composition of the views of the larger community discussion I see happening around the proposals.

  • For example, on PUP-13 and PUP-11, arguably two of the most important, influential and contentious proposals to date, currently there is a unanimous approval vote on both of them by 4 participants who are from the group of the same 5-7 participants who decide virtually all votes.

  • In the case of PUP-13 and PUP-11, you can clearly see in the discussion around these proposals that there are many valid and well thought-out dissenting opinions / suggestions that may represent as much as 40-50% or more of the collective opinion around these proposals (judging by the composition of comments), but these are being totally un-represented in the voting process.

  • So essentially, you have something like a dynasty that is controlled by a select few people who are clearly not representing the views of the larger community, which for a DAO, is—in my and many other peoples opinion—a problem. The best that the vast majority of the community around Pocket can do is make a thoughtful post in the comments of a proposal and hope someone with voting power is doing a comprehensive survey of all the sentiment around the proposal and doing their best to vote in alignment with the larger communities wishes. There is a lot of trust assumptions there that I am near certain are not being met.

  • Surely the logic from the team (based on how they have setup governance) is that the most active members of the community are the most qualified to vote and that theoretically, these people/orgs will do what is in the best interest of the community because if they are good actors, it will benefit them as well. But again, this relies on many assumptions and this process can be gamed and taken advantage of by purely self-interested actors with different motives. The possibility of bad / gray / overly self-interested actors capturing governance happening is lessened by more people having access to voting in my experience.

  • And finally and perhaps my most important point, many of these proposals and in particular PUP-13 and PUP-11, are based on heavy speculation and personal opinion—regardless of how thought out they are—and could have serious and damaging implications for the project if they are wrong. The lack of representation of dissenting opinions in the voting composition is disturbing and makes me feel like the communities input is not being heard. In the case of PUP-13 and PUP-11, I witness a few strong personalities pushing through a proposal that is contentious at best without really meaningfully integrating or addressing critiques.

I believe that the bar is currently being set too high by the current governance rules for acquiring a vote and it is negatively impacting the project by causing a misalignment between the larger communities sentiment and the voting block.

I am more than involved, invested and educated enough about Pocket and crypto in general to have a meaningful take on the project that is worthy of representation by a vote, but I do not. As an investor and participant in many projects over the course of a decade in crypto, I have extensive knowledge and relevant experience to make a meaningful vote, but I do not have the time to invest in overcoming the hurdles necessary to acquire one for Pocket.

I witness the same situation in many highly experienced and intelligent governance forum participants who also do not have a vote or say other than pleading in the comments to have their views represented and hoping that someone with a vote is reading their comments.

I think the bar should be lowered for participation otherwise I am worried that the future of the project is in jeopardy as too few people are deciding big things without adequate input and checks and balances on their power and general reasoning.

Thank you.

2 Likes

TL;DR - I agree that it’s time the system got an update, I just disagree that the current voter pool is non-representative.

Going Against Your Interests Doesn’t Mean it’s Non-representative

Those who disagree strongest with a proposal are more likely to take the time to reply to the proposal. That doesn’t mean they’re representative of the majority. You shouldn’t use the comments as a sample of collective opinions.

Here’s the list of current voters:

  • ArtSabintsev: core VP Engineering, became a voter before joining the core team
  • BenVan: node provider & protocol contributor
  • Blockwall Capital: early investor
  • Chainflow: node provider
  • CrisOG: core engineer, became a voter before joining the core team
  • disruptbanksy: core marketing/BD
  • Eden Block: early investor
  • _hk_: community member
  • Jinx (Poktopus): community figurehead, poktpool admin, host of node runner office hours
  • MetaCartel Ventures: early investor
  • Michael O’Rourke: founder/CEO
  • NachoNodes: node provider, Dir. of Engineering
  • Poktdachi: poktpool community member
  • Saturn Network: app
  • Shane: Node Pilot founder
  • SimplyStaking: node provider
  • Tony Kim: community moderator
  • virtual knight: community member

Note that 17 out of 18 of these voters are node runners who stand to benefit in the short-term from high inflation. If they are voting in favor of inflation reduction, it is because they believe it to be in the long-term interests of the ecosystem.

I will concede that the voter pool is small. But that doesn’t mean it’s non-representative.

The Low Voter Count is More Due to Apathy than Barriers to Entry

Have you looked into how a vote is earned?

Here’s what’s required of someone running a node (in addition to proving unique identity via BrightID/Coordinape), only 5 of the following:

  • Stay unjailed for 1 continuous month (2,880 consecutive blocks)
  • Process 50k relays
  • Help another community member set up a node
  • Contribute to open-source node tooling
  • Contribute to node documentation
  • Contribute to a node guide
  • Beta test a new Pocket Core version
  • Upgrade your node to a new Pocket Core version

The community path is equally easy for someone who is an active community member, requiring a mix of dogfooding Pocket, engaging with Pocket on Twitter, contributing minor fixes to docs/websites, attending calls, and helping other community members out.

The majority of steps on the path to earning a vote are all things that can be reasonably expected of someone who is an active stakeholder. I would bet money that there are hundreds of community members who already qualify for a vote or at least have very little left to do to obtain it. But they haven’t bothered.

In other projects, you see this kind of apathy towards governance in the form of low voter turnouts. Perhaps that feels better because the “option to vote” was there but it’s no different from apathy resulting in people not bothering to claim their vote.

And if someone can’t be bothered to take the time to claim their vote, can we trust them to take their time to analyze an issue, consider all sides to a debate, and vote with the long-term interests of the project in mind?

I Agree that Improvements Can Be Made to the Existing System

I have already begun brainstorming ways to expand the voter pool while upholding the mission of the original system.

This will involve automating the verification of someone’s stakeholder status, while ensuring that we gradually roll votes out starting with core community members.

I’m hoping to have a proposed update in the near future.

5 Likes

As an aside…

This feels unfair.

The WAGMI proposals have had the longest-running debates of any proposal by far. I have personally held off on putting them to a vote precisely because I wanted to allow for critiques to be expressed and addressed.

The biggest critique was the suddenness of the change, in particular for PUP-12, which was directly integrated into PUP-13 in the form of a 5-month gradual drawdown. If that’s not a meaningful integration of critiques then I don’t know what is.

4 Likes

Thanks for the thoughtful reply @JackALaing

This is a moot point because the opposite/inverse is also true — those who most support the proposal are also more likely to take the time to reply to the proposal. It doesn’t mean they’re representative of the majority.

This is all also besides the point because currently the only real meaningful handle we have on community sentiment is in the comments on the forum so until there is a better proxy for community sentiment, it’s all we really have to go off in a quantifiable way. Sure there are Discord groups, etc. but as far as I can tell the sentiment there seems to mirror the comments in the aforementioned PUP’s. Divided.

Next up, the list of voters. Thanks for compiling this by the way!

However, this voter list hardly reflects the composition of the larger Pocket community and is heavily biased towards early investors / contributors and team that likely got in at low prices and are likely already extremely profitable.

Yes I thoroughly reviewed the requirements for getting a vote and that was a big inspiration for why I wrote the post here in the first place! In their current form they exclude most of the investors and community around Pocket.

Many people are using a third party node hosting service or POKTPool so they can’t meet the node requirements as far as I can tell. That is a fail. I could go on but my point is the bar is way too high and the requirements are disconnected (at least in the node category) from the current composition of the Pocket community. As a general statement, for the other categories the requirements are either too technical or require too much time / chance in my opinion.

Most experienced crypto investors I know are invested in many crypto projects and participating in governance at the level you are asking for a vote for of all them would be an almost full time job and not practical or desirable. Nevertheless, their experience investing and doing due diligence into tokenomics as an investment thesis is highly valuable and relevant to the success of Pocket Network. Thus their input and vote should be welcomed without so many high bars to jump through.

Think we are going to have to agree to disagree here… from my perspective many salient and important suggestions were shot down and not integrated. Which is fine! Because if the people who commented with dissenting views had the ability to vote, their sentiment could be expressed there in a meaningful way. But in its current form, their ideas got shot down and they have no way to further express their sentiment other than drafting a proposal which is hugely time consuming. The onus in my opinion is on the original proposal author to continue to work in the suggestions of the community to get things to a place where a vote that is much more representative of the full spectrum of community participants passes, not just 18 people of a similar makeup with only 5 (as of this writing) actually voting.

Anyways, I believe we agree the bar should be lowered for voting rights. Weighting active community participants votes higher is reasonable to me (as we discussed in discord), but everyone who has any meaningful skin in the game should have a vote in my opinion.

hey,
i run nodes via poktpool and thunder pokt , so it’s not like i can connect my wallet and vote like i have been doing with every project till now. i am active on forum and for me it was about difficulty to vote, i tried a month ago so maybe something changed. my lack of effort is becuse:

  1. i don’t like to…lol
  2. i saw the vote is going in the direction i’m for :slight_smile:

maybe an implementation via discord is an idea that can help smooth things ?

i will give in another try to vote, maybe i was wrong and it is simple :slight_smile:
cheers!

Hi, thanks for these points. Have a couple comments.

The question for me is, what are we optimizing for? Quantity or quality? I would argue that the bar is high enough that most people who care enough can claim a vote, and those who have claimed are more likely to participate.

8/18 votes with 3 days left is a 44% turnout rate. Contentious votes will have higher turnouts. For comparison the USA has gone between 37% - 67% over the last 20 years. There also may be an effect here of voters seeing the path, and not bothering to vote given the fact that it’s likely going to pass.

While far from perfect, I believe the system is working as intended.

Pocket’s DAO is an opt-in democracy. Once you claim your citizenship by claiming a vote, you have the same level of power as everyone else, regardless of how much POKT you have or how long you have been part of the community.

I hear you on requirements being too high, yet given the makeup of the current set of voters and their activity within the recent PUP proposals, I would find it hard to believe that all of us didn’t take everything into consideration. PUP-12 didn’t go to vote due to the pushback against how it would have been implemented. It was clear there was relative consensus around something needing to be done, the question was how and when.

Any governance system can be captured/co-opted given the way it is architected. The important part about Pocket’s system is that it cannot be sybil attacked (or at least incredibly difficult to), and everyone has the same power in their vote. This of course has tradeoffs such as making it more difficult for some to claim a vote, but the other side of this vote has more impact.

I agree with your point here. Our thesis has always been as Pocket grows in importance and the impact of decisions become larger, more people will be incentivized to claim a vote. While slow, we’re seeing this happen in real time.

The arcade isn’t perfect and can be iterated on over time, but over the last 20 months we have seen 13 people go through the process and claim their vote. I’m certainly monitoring how this plays out over the next 12 - 20 months, especially post PUP-11 and PUP-13.

4 Likes

It is unfortunate that many community members feel left out in the current governance and can only comment on the forum. I urge all of you to claim your votes at the earliest. Like Jack mentioned, there are several community members who are qualified for votes but still have not claimed them. Nevertheless, we assure you that voters are considering the community sentiment before casting our votes. One of the best examples is PEP 15: PEP-15: Pocket DAO Treasury Diversification Proposal, which was rejected due to the larger community concerns. Also, the rejection of PUP 12 has to be mentioned here as it was taken out due to the feedback received.

With regard to PUP 11 and 13. I feel most of the community concerns have been addressed but not everything was adopted. Here is what I noticed:

  1. With the network already hitting 30k nodes, the supply side is more or less satisfactory, and to continue the current level of inflation and rewards is unsustainable in the long term. And current high rewards were set up for only one purpose: bootstrapping the demand side. There were some community concerns against decreasing the reward but taking the long-term view on the network, it was clear for most of the voters (a huge proportion of node runners themselves) that the current uncontrolled inflation in the network is unsustainable.
  2. The request for an opinion from an independent expert on the new economics is taken up by Jack.
  3. There were community concerns over the 6 months timeline being too short to reduce the rewards. Here, this is a proposal to manage the inflation temporarily until the new system comes into place with version 1 (Also, many recommendations from the community including stake burns can only be done with version 1, so the feedback wasn’t rejected as such). So it does not make sense to make the timeline to 1 year or more because by that time frame Version 1 could be already out. Moreover, the current high inflation is not a good signal to the market. By having a concrete plan to manage the high inflation ASAP, we are committing to the long-term vision of the project. I am of the opinion that it could have been shorter than 6 months. But keeping the larger community feedback in mind, a less drastic 6 months is understandable.

The governance of Pocket is set in such a way that only engaged community members can vote. I will be in support to continue this. Unlike many protocols Pocket, solves a core problem - infrastructure that is decentralized. Any governance system with an easy entry (i.e., voting according to the number of tokens held) will make it too easy for token holders who do not run nodes, and big node runners to dominate the governance. This does not stay true to what the network tries to achieve. Whereas the current system is set in such a way that any node runner can become a voting member, provided they attain the milestones. The same is true for an application or a community member who does not run nodes. This governance system provides an equal voice to the long tail of small node runners and applications along with the whales in the network. But it is true that it doesn’t offer any governance rights to token holders whether small or big, and this is intended.

Nevertheless, I am up for any measure that decreases the complexity of attaining votes for node runners and other community members. But I will not remove them and make it too easy for token holders or holders who run nodes through third party options (because you are not really helping in the decentralization of the network), because the primary citizens of the network are node runners running nodes themselves, that party who runs nodes for you (he/she can get a vote), and the applications. The governance has to be set this way to attain the decentralization of nodes and hence the service.

Lastly, little value can be ascribed to the experience of investors. In the current proposal, maybe. But it is good to see that non-voters are already giving their feedback. But why do I need the expertise of a host of investors in a governance system where 80-90% of the decisions are technical? How will it help in the long term when most of these investors are not interested in other decisions made in the DAO? Whereas other stakeholders such as node runners, community, and applications are much better bet to continue a DAO that is focused on the protocol and its long-term sustainability.

3 Likes

Democracies works to build a park with public funds, but dont work to run a company and we can see it here.

Voters need business background and experience to understand the effect od every decision.

This structure is not good enough to go to the next level.