Allocate an emergency fund from the community pool

Summary
Allocating an emergency fund for situations that require immediate action.

Motivation
This proposal draft is in no way related to the ongoing discussions about the off-chain multi-signature funds. This is a general proposal for future handling of an emergency fund for several cases.

Recently two proposals passed, namely #10879 (Terra Station) and #8813 (Terra Station).

The first one was kind of signaling proposal that showed that a majority of the (voting) community thinks all community-related funds should only be distributed by governance proposal and not be managed in a centralized way.

The second one was a proposal to establish the Grants Foundation (initiated by Edward Kim). In short: The Grants foundation shall help projects being reviewed before applying for a community spend in their favor. This shall build trust in the project if it has been approved by the Grants Foundation.

I acknowledge the demand of the community to have all spends from the community voted on by the community. Nonetheless, I think that there are situations in which it is not good for the chain to wait 7+ days for a decision.

This is a signaling proposal and numbers will be discussed and “fixed” before an actual governance proposal goes up.

Proposal
It is proposed to allocate a small emergency fund to an on- or off-chain multi-signature wallet. This should be a quite small amount, for example worth 10-20,000 USD. The emergency fund should cover expenses for the chain that are imminent and for which the full governance process (agora post, discussion, governance proposal) would take too long.
This multi-signature wallet would have to be funded by a governance vote (Community Pool Spend proposal) initially and each time it has been used to a certain extent.

Examples – using the emergency funds:

In my opinion there are some situations that might require immediate action that is paid for. Future projects developed as community-owned will need budgeting. So this can be handled by the normal governance procedure. Let us construct an example and assume that re-opening IBC would have been a budgeted project. It would have passed governance and is paid by milestone to the corresponding developers. In the final steps there occurs a problem that was not budgeted and requires work that needs payment. Passing full governance again would delay things quite a bit and brings further hassle in explaining to a broader community what exactly has to be done.

Second example for this: A severe bug in the code is found and needs fixing. The emergency funds could then be used to pay this development and maybe a bug bounty.

Third example: A community-owned DEX is built at some time and has a temporary liquidity problem in one of the liquidity pools that has to be fixed to remain operational.

There are probably more situations in which immediate action (and such spending) would be beneficial if not mandatory.

Clarifications

Judging the “emergency-case” would be up to the multi-signature holders. As the funds in there are very minor, misusing it would not bring any benefits. The community would refuse to re-fill it later and the reputation of the holders would be permanently damaged.

As the work related to this should(!) be minor, I do not propose a compensation for the holders, but that should be open to discussion.

As to who the holders should be:
As the initiator of the Grants Foundation and a very trusted member of the community, I think Edward Kim should be part of it if he agrees to. Also Tobias (Zaradar) and at least one member of the validators should be in my opinion. Furthermore, the community could vote on two additional members that are suited for doing this.

I reckon that the emergency fund would not need to be used very often (best-case never), but in my opinion it is essential to be prepared.

As this is only a signaling proposal draft, it would require at least two further votes if it passes.
1.) voting / approving the proposed holders of the multisig
2.) approving a community spend to that multisig wallet

16 Likes

Great prop
Yes vote for me👍🏼

2 Likes

I like this, i think it should move forward. Starting with the small budget is a good idea and if successful this could be increased.

A separate technical team specific for emergency situations is a good idea, currently there is too much mistrust, an emergency situation would likely end up in back and forth arguments where people without technical expertise would voice their opinions loudly and cause confusion.

2 Likes

Not a bad idea on its own, but I think you need to nail down the nominees list before the rest of the proposal can be considered. The community is very touchy as to who gets to handle its funds, and the people in charge of this emergency fund will make or break the prop.

IMHO you’d need about 5 or so for the multisig. Have you spoken with Tobias and Ed? Have they agreed to take on this duty? As for the other 3, have you considered reaching out to a few of the validators? Perhaps Allnodes and Interstellar? Do try and assemble a list; as the prop-writer you can’t expect the community to do this work for you. Perhaps it’d be best if you presented 5-7 trusted individuals (after speaking with them), and then let the community decide on the final selection.

Apart from that, the idea has merit and warrants support in my opinion.

Shalom! :pray:

4 Likes

Thank you. Indeed, a list of possible holders would have to be determined and probably proposed by myself. But as you say the community is very selective in this. So I first want to have an overall impression of the thoughts.

Regarding Ed and Tobias, I have not yet spoken to them and of course their names are not fixed. Although I am the writer, I’d expect the community to have some demands of who they’d like to see as a holder.

1 Like

A great proposal and definitely a necessity. And like you said, best case scenario (never needed).
I personally do not feel that anybody from the development team should be a signatory as this can cause conflicts of interest. And some members of TR, for all their wise and level headed past, have shown a rather whimsical side to them, as of late. Ed (TGF) is definitely a good option as a signatory, but some Validators have shown clear bias towards TR, so we’d have to chose carefully. For such a small amount 3 Signatories should suffice but must be 100% in agreement on the expenditure.

Great proposal, let’s talk more about…
Yes for me👍🏼

Make it so…

This emergency fund is a great idea and I would like to nominate/request TGF to handle this. They have enough members to give us a couple of signers.

Better safe than sorry !
My YES vote goes to this

I would vote yes on this, set the specific amount first and 5 signers requiring 3 out of 5 in case someone is ill or dies etc. I would suggest 20k in todays world even that doesnt go to far but enough for emergencies.

My initial thoughts are to give this a yes vote.

Es buena idea!! Por mí bien!!

100% in agreement, you can never be too safe.

Just an update why I didn’t proceed with that. Everyone I had in mind that I could propose as a signer is now involved directly/indirectly in L1 and/or TGF. So I have no people I personally could propose to act as signers.

1 Like