I got this idea because several days ago I saw on Twitter that there is a scam Mirror Protocol proposal to transfer MIR tokens to a wallet saying that it is a burn. Of course, we as a community ended up working together, some even spent their MIR tokens to create other proposals to not vote on the scam proposal (I see you white knights). However I believe we need to create a system where this could not happen again in the future. I know that in a decentralized economy this is hard to achieve but hear me out:
With current governance token tokenomics, we usually get a lot of people buying the tokens just for price appreciation and not actually doing governance activities. People could also buy tokens to create scams like what we saw a few days ago. Some protocols also creates governance tokens to generate extra income making the platform not fully efficient.
What would happen if there is a new governance token structure where you get free governance token for using the platform and is not transferrable with no max token limit?
Wouldn’t this solve several problems?
- Protocols are forced to create a sustainable business model with proper income generation (eg. Anchor, Kujira).
- People that actually uses the platform (usually knows more about the protocol inside out) gets to decide where the platform is going.
- No panic buys/sell or nagging around the community saying their token is a rug pull.
- No risk of a whale buying the entire token governance token supply to move the protocol to their liking.
- People who wanted to create scams actually have to use the platform for a while and when they do that we could easily tag that wallet for unfavourable activities (ie. you cannot create a brand new wallet for scam proposals).
I would also agree that people active on the platform should be given incentive, and while I do believe steering a well established protocol is a good enough incentive, there can also be another incentive mechanism where the governance voters would be awarded something (eg. UST/Luna reward from platform revenue by voting/starting governance proposals). I chose UST/Luna because if a lot of protocols uses this mechanism, Terra as a whole would also benefit since there will be deeper liquidity on the underlying swap.
I believe this would increase governance activity, reduce scams and reduce unnecessary noise in the community - so we can all just focus on building and improving Terra community.
I’m open for discussion, generally interested in the future of governance.
I don’t know why there has not been any interaction here but your idea is REALLY INTERESTING.
Would love to read your full take on this.
Thanks! Maybe because it’s something new and ‘abstract’. Let’s see how this idea can be improved so we can have a better crypto community. Would love to hear your inputs as well.
A simple example would be:
Anchor sets up a new governance treasury, taking let’s say 0.1% of the yield reserves in UST.
People using Anchor Earn/Borrow gets gANC token proportional to the amount they Earn/Borrow over time, gANC token would be used as governance voting rights ONLY. There will not be any supply limit to gANC.
In case of a governance proposal voting, people would vote based on their gANC (meaning the people who are in the protocol longer and put more money gets a higher vote count) and gets rewarded UST based on their number of gANC from the treasury. A similar structure is seen in Kujira’s governance proposal where you get KUJI tokens just from participating in the governance vote.
Seeing Kujira’s mechanism, the goal to incentivize people who are voting is really good but it comes with a flaw. A big whale that doesn’t know anything or even the worst case scenario, a malicious big whale could come in and get 51% KUJI tokens and steer the platform however they like.
In this example of gANC, since the token is not tradable, the only flaw is if the wallet of a big gANC whale is hacked and does stupid/malicious votes. But what kind of hacker hacks to vote?
Please let me know if anything is not clear.
PS: would love to hear from @dokwon
As of today, there are even more scam proposals on Mirror. Hate to see it going like this.
The only problem I see with this is that Governance Tokens often are bought by interested parties to help shift a protocol that’s slowly moving towards obsolence and make it better, they see an opportunity and buy the necessary stake to shift governance. Without the ability to do this, you may end up with an empty governance, previous users are no longer interested and so they don’t vote. Whales buying participation doesn’t necessarily need to be bad…
I agree, and I know for a fact my suggestion is not perfect. That’s why we are in this forum discussing right. Maybe there should be a mechanism where there are 2 tiers of government?
Create 2 governance tokens, 1 is from using the protocol and 1 for voting? The users of the protocol can be the one posting suggestions and proposals, and let stakers of the voting token that can be bought or sold to vote on the said proposal.
It just breaks my heart that there are a lot of scam proposals being executed.
What do you think?
Could you put the links of the scam proposals?
We need a reputation system, people is trying to explode governance
Starting to think that Curve has the right governance model, more protocols should adopt it.
Your idea of non-transferrable governance tokens is interesting, and I also like the idea of 2-layered governance. It makes sense for purchasers of large stakes to be able to propose new ideas, and I would even say that they should be able to vote in support of their proposal. But it would be great if active users of the platform could protect their interests better against scam proposals. Maybe you could distribute a governance token along the lines of what you described and have that be the 2nd layer of voting on a proposal, so that proposals must be approved both by stakeholders + governance token holders.