SIP 155: Deprecating the synthetixDAO Source

AuthorJordan Momtazi, Kain Warwick
Discussions-Tohttps://research.synthetix.io
StatusDraft
Created2021-07-02
Requires SIP-157

Simple Summary

This SIP proposes deprecating the current synthetixDAO and replacing it with two new governance bodies, The Synthetix Treasury Council and the Core Contributor Committee. The CCC will be proposed in a separate companion SIP.

Abstract

The synthetixDAO was formed in 2020 as the mechanism to oversee some of the aspects of the project that had previously been governed by the Synthetix Foundation. The decommissioning of the Foundation led to the creation of three distinct DAOs each of which controlled certain aspects of the protocol. The other two governance bodies, the protocolDAO and the grantsDAO have been folded into the evolving decentralised Synthetix governance process with the synthetixDAO yet to be incorporated into that framework. This SIP proposes to replace the existing legacy synthetixDAO with two new decentralised governance bodies. The Treasury Council and the Core Contributor Committee. If passed this will put all aspects of Synthetix governance under the control of token holders.

Motivation

The synthetixDAO is currently the only remaining legacy governance component within the protocol, by deprecating it and replacing it with governance mechanisms under the control of token holders we will be removing one of the last remaining vectors for protocol capture.

Specification

Overview

This SIP establishes a new Council with four members (configurable via SCCP) voted on by token holders using the voting process described in SIP-104. As per SIP-137 aligning governance epochs, the first epoch of the Treasury Council will be shortened to ensure it is synchronised with the current governance epoch, after which it will continue to be aligned with the other governance epochs.

The synthetixDAO currently has a number of functions, listed below:

  1. Treasury management
  2. Core Contributor grant payments
  3. Core Contributor discretionary bonuses
  4. Governance participation payments
  5. Funding grantsDAO
  6. Funding protocolDAO
  7. Funding pDAO costs
  8. Discretionary incentives
  9. Partnership and operational costs

Each of these functions is critical to the continued operation of the Synthetix Protocol and will be split between the Treasury Council and the Core Contributor Committee. This SIP places the following functions under the control of the TC:

  1. Treasury management
  2. Governance participation payments
  3. Funding the CCC
  4. Funding grantsDAO
  5. Funding protocolDAO
  6. Discretionary incentives

Treasury management The protection and investment of the treasury funds to ensure that the operating expenses of the protocol covered into the future.

Governance participation payments The Treasury Council will set and manage the governance payments for all elected members of governance bodies.

Funding the Core Contributor Committee The Treasury council will also negotiate with the CCC to set quarterly and yearly budgets for CC expenses and will provide this funding in advance to the CCC. At the outset to derisk this transition the TC will provide three years of operating expenses to the TC ~$15m USD and ~1m SNX

_Funding grantsDAO _ The grantsDAO currently has more than 100k SNX allocated to it, this will be retained by the grantsDAO and cover the next 24 months of funding. After which the TC will set a quarterly budget in collaboration with the gDAO.

Funding protocolDAO The protocolDAO requires funding for administering the protocol typically this is 5-10 eth per month, the TC will be responsible for ensuring the protocolDAO has funds needed for testing and administration of the network.

Discretionary incentives One of the primary benefits of the synthetixDAO has been its discretionary flexibility, this has allowed for funding to be allocated to testing numerous initiatives that would have been difficult to reach consensus on within the Council, these include early liquidity incentives and staking incentives on L2. This mandate could be handed to the Council by establishing a discretionary incentive budget.

Rationale

The SIP is designed to balance a number of considerations, but the primary reasoning behind establishing two new governance bodies rather than transferring these functions to existing governance systems or maintaining the status quo is to ensure that these critical functions are performed by community members elected specifically for their ability manage these functions. Separating these powers also ensures that there are checks and balances within the system of governance to ensure that all governance bodies are held accountable not only to token holders but to each other.

Configurable Values (Via SCCP)

Please list all values configurable via SCCP under this implementation.

Copyright and related rights waived via CC0.