Segment governance votes and create listing committee

Summary

Written by Regan Bozman and Pierre Chuzeville from Dove Mountain Partners

C.R.E.A.M. should separate Critical Proposals from Light Proposals, and create a Committee that handles decision making for Light Proposals.

These two types of proposals would have different parameters which affect the length and execution of a proposal:

  • Critical proposals that affect would require more voting time and a higher vote differential.
  • Light proposals that affect asset listings and collateral requirements would require less voting time, can be quickly implemented - they should be delegated to a Listing Committee

As part of this change, we should also adopt Kiba’s proposal to create a Listing Committee and move all decisions around listing new assets and changing collateral requirements to this Listing Committee.

The Listing Committee will consist of 5 Nominees who are voted in by the CREAM token holders. Nominees should decide on Listings, Collateral Cap, Collateral Factors and Reserve Factors. This will enable much quicker governance decisions and also allow CREAM to avoid listing all new tokens as 0% collateral.

For

Create two types of proposals with different parameters which affect the length and execution of a proposal.
Create a C.R.E.A.M. Listing Committee

Against

Do nothing

Motivation

C.R.E.A.M. community members have voting fatigue because they need to approve small changes to the protocol. Currently, the governance forum is overloaded with requests related to assets listing and Collateral Factors. Consequently, critical proposals are lost among others.

The C.R.E.A.M. protocol development process is slowed down, participation rates are relatively low, and discussion is not encouraged enough. This is mainly due to a lack of structure, order and clarity, leading to a messy governance process.

Currently, the community votes on every Collateral Factor and new asset. This has a number of issues:

  • Creates voting fatigue for token holders because they’re asked to vote so frequently
  • Dilutes bigger governance changes

Creating a listing committee will make speed up new listings. The community can still make proposals for new assets to be added to C.R.E.A.M. platform. The proposal above attempts to balance speed of iteration with avoiding a descent into plutocracy. This will onboard more collateral to increase TVL and fees.

Specification

Light Proposals

Light proposals would include:

  • Asset Listing
  • Reserve Factors
  • Collateral Factors
  • Collateral Caps

What is included in governance proposals labeled as Light Proposals could evolve over time, and anyone is free to make suggestions.

Light proposals would be handled by a Listing Committee, who must make a binary decision. If YES wins (at least 3 positive votes), they have to reach an agreement on Reserve & Collateral Factors as well as Collateral Cap, within 2 days.

Critical proposals

They require more voting time, a higher vote differential, and are not handled by a specific Committee.
This is where the main strength of decentralized governance comes into play: community members should be able to express their opinion directly or at worst delegate their voting rights to trusted actors. Critical Proposals are the ones which must go through the full governance proposal lifecycle (we are planning to propose some updates here soon).

Listing Committee

The 5 Nominees must have a diversified background to foster discussion while remaining flexible and agile to move fast. We believe that the ideal committee looks something like this:

  • 2 C.R.E.A.M. Core Team members
  • 2 active community members
  • 1 lending protocol (other than C.R.E.A.M.) active contributor

This design was inspired by the Synthetix Spartan Council.

Voting

Each Nominee would receive an NFT that gives him or her 1 vote. If enough voters amend their votes such that someone who is not a council member ranks higher than a council member, then the the DAO will manually retrieve the NFT from the departing Nominee and issue it to the new Nominee, giving them Nominee voting rights.

C.R.E.A.M. DAO will need to create a modified version (or custom contract) of an NFT which can be revoked and issued to EOA’s (Externally Owned Addresses), signifying a wallet is part of the Listing Committee.

Each parameter - Collateral Cap, Collateral Factor, and Reserve Factor - requires a minimum of three positive votes, in order to be listed. Nominees can also make proposals on new assets to list, and should discuss asset listing related community proposals in the forum.

Minimum proposal length is 24 hours and maximum is set to 5 days.

Election

Nominees election period would last 7 days, and would be renewed every 3 months. Existing Nominees from the current Listing Committee Epoch can remain on the Committee but will still be able to be voted out via people changing their votes in the poll.

In case of emergency, token holders can vote out a Nominee if the decisions made are not considered as aligned with the interests of C.R.E.A.M. Finance. The number of seats can be modified via an Improvements Proposal.

Limited Powers & DAO Discretion

The C.R.E.A.M. DAO has a veto power and can require a revote at its discretion, but this should happen only in emergency situations - the processes should all be optimized to minimize this potential occurrence.

Rewards

Assets listing, Collateral Cap, Reserve Factors and Collateral Factors are strategic parameters to ensure the longevity of the protocol. Such changes are highly related to downside risk of the whole protocol.

Therefore, Nominees need to be incentivized: they will get 25 CREAM tokens per month as rewards, which would vest over a 12-month period.

5 Likes

As protocol team member, I’m glad to see a proposal like that. This is the proposal that would bring a great improvement to our governance.

However, I have to point out the infeasibility before we move it to voting. As a matter of fact, Interest Rates are not decided by admin key directly. Borrow APY and Supply APY are decided by Interest Rate Model dynamically along with utilization rate on a block basis.

It is technically impossible to empower the Listing Committee to decide Interest Rates.

Thus, if we are going to empower Listing Committee the right to decide Interest Rate Model, the committee must be capable of building one, or be capable of understanding / deciphering the math model at least.

Also, as discussed with @Kiba, I suggest that the committee decide Reserve Factors by setting Reserve Factor for each token category (Major, Stable, Governance token), rather than setting Reserve Factor to new asset one by one. Of course the committee could make exception for any asset with a good reason, but it makes more sense to provide a consistent and predictable Reserve Factor basis in the protocol.

4 Likes

Hi @eason, I like that way you have proposed for the Reserve Factor for each token category and would like to add to it in terms of collateral factor for assets.

When a particular asset gets listed in a particular token category, we can start with a certain percentage per category by allocation certain rules(Number of token holders, marketcap etc…)

For example: Governance tokens of projects with over 4000 holders and 300M marketcap starts with 15% Collateral factor.

I could be wrong in my approach, looking forward to feedbacks.

1 Like

This is great feedback - thanks @Veersingh2 @eason

We’ll work on updating the proposal to reflect this before voting

1 Like

Thanks, that’s a good idea but it requires lots of efforts on generating such strategy. I would say it’s a good direction but not sure if we should include this at the beginning.

Thanks again for the feedback - I am moving to vote and going to remove all references to changing interest rates (that was an oversight on my end).

I agree that the committee should decide reserve factory based on token categories, but I don’t think that it makes sense to include that in the proposal. Ultimately it’s at the committees discretion to decide how they implement this.

1 Like

I am also going to propose that the Collateral Cap feature that the team launched today be delegated to the listing committee

2 Likes

Voting is now live here: Snapshot

1 Like

@reganbozman I forgot to put the link here. Thank you :slight_smile:

For the projects waiting on the listing committee, is there a specific timeline?

There is money happening while we wait :slight_smile: :slight_smile:

hey @jgarzik sorry for the delay here. I just put forward the first nomination here: Calling for CREAM Listing Committee Members - #3 by reganbozman

I’m going to nominate some other folks over the next 24 hours to try to speed up the process.

Which listing are you referring to that is held up?

Trying to raise collateral ratio of VSP & VVSP above zero.

It is difficult for young projects to start collateralizing their tokens. CREAM is a key step-stone in that journey (IMNSHO, as a CREAM fan + Vesper designer).

Each day that ticks by, is a day that VSP hodlers might need to sell VSP, rather than collateralize and hodl.

1 Like