This SIP proposes to deprecate the current pDAO (protocolDAO) and replace it with a new governing body, the Risk Council. The Risk Council will be responsible for the risk management of Synthetix deployments, contract upgrades, and parameter changes.
The SIP aims to improve the governance structure of the Synthetix protocol by replacing the existing pDAO with a more transparent and accountable Risk Council. This will allow for more streamlined decision-making, risk management, and protocol improvements. This SIP supersedes the previously rejected SIP-186.
While the existing pDAO structure has functioned well for the past few years, it is now the primary area of centralization within protocol governance. The pDAO is a multisig controlled by members of the community who meet specific criteria, but these members are not elected via SNX token governance. This reduces their accountability to token holders and creates a potential attack vector on the protocol.
The existing pDAO will be officially deprecated, and its responsibilities transferred to the Risk Council.
The Risk Council will consist of 3 members, elected by SNX token holders. The voting method will utilize unweighted debt shares, as is currently used for Treasury Council elections.
Once implemented, all deployments must be signed and executed by the majority of both the Risk Council and the Spartan Council. This closely replicates the status quo, where the pDAO's role in governance is to validate, stage, and execute upgrades on behalf of the Spartan Council. In the proposed system, the role of the Risk Council will be to validate that the proposed change is reflected in the staged transaction. Their role is NOT to interfere in governance, but instead to ensure all protocol upgrades are validated prior to being executed.
This change is crucial to ensure that Synthetix has a robust, transparent, and efficient governance model. By replacing the pDAO with a Risk Council, the community will have a clearer pathway for participation in decision-making and risk management.
Low-level implementation details are to be confirmed (TBC).
At a high level, a new governance contract will be deployed. This contract will be owned by two sets of NFTs: The Spartan Council NFT set and the Risk Council NFT set. These NFTs are distributed at the start of each governance epoch following the conclusion of the election process. This governance contract will accept transactions from any address holding a Risk Council NFT or a Spartan Council NFT. In order for a transaction to be confirmed, 2/3 of the Risk Council NFTs must sign it, and 5/8 of the Spartan Council NFTs must sign.
Copyright and related rights waived via CC0.