MIP61: Delegate Compensation

We need to include some minimum requirement with respect to communication and participation metrics here, otherwise this is very abusable.

I would recommend >90% for both, that leaves enough leeway for unavoidable absences / accidents while still ensuring the delegates maintain a good standard.

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delegate per month
monetsupply 679
Flip Flop Flap 3255
MakerMan 118
Field Technologies 4000
Tim Black 404
Planet_X 4000

These numbers are taken from the lower block of Delegate Reward Proposal v2.0 - Google Sheets

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If I recall correctly, @blimpa suggested that I remove the definition of Recognized Delegates and leave that to Governance Facilitators to define. @blimpa can you comment?

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I did find it a bit odd to have that one definition there, which I also found to be prescriptive in tone, since delegation had been worked outside of the MIPs Framework. I suggested to add a reference to the forum post Delegation and MakerDAO.

I don’t think that removed definition made any reference to minimum communication and participation metrics though, but I might be wrong.

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I actually suggested that that go in. In an ideal world it would be defined in the MIPs framework itself. Given that no one has done that yet, the best way to define it is to refer to the governance facilitators. In practice it’s accurate, and is more or less the best we can do in the MIP.

The alternative is not defining it at all, which I believe is worse.

Minimum comms and participation metrics don’t define Recognised Delegates, but they do need to define who gets compensated.

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Hey bud your numbers need to be updated – some of the Delegates have been allocated a little more MKR to their respective delegate contract.

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Added goal 4:

We certainly don’t want delegates wasting energy trying to sabotage other delegates. In contrast, let all flowers bloom. :sunflower:

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Since there already is a maximum per delegate compensation amount, is there a limit on how many such delegates there can be and/or a maximum total compensation amount?

Note that depending on what parameters you choose, this doesn’t necessarily mean zero-sum thinking (which I agree should be avoided) with the number of delegates right now.

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No, it is in the hands of MKR holders how many delegates to delegate to. The only limit is imposed because there is a finite amount of MKR.

Originally I was thinking that there should be a parameter for the maximum total comp summing across all delegates. However, this parameter could be updated by vote anyway so why not just let MKR holders determine the parameter by how they delegate. It seems more direct and simple.

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Maybe this was discussed further elsewhere and you can point me to it if so but the last post here seemed to propose a maximum of 10 well-compensated delegates. EDIT: I see LFW’s proposal on the spreadsheet now.

My two cents on this is that I prefer your original line of thought. Either a maximum number of delegates or maximum total compensation would be a good thing as it provides an additional safeguard on the total expenditure, even if it adds some complexity. This is a parameter that can be updated by MKR holders, if required.

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Yeah, that’s correct. There hasn’t been much debate on this decision. @LongForWisdom proposed the simple compensation scheme in the current draft. I decided that I liked it because it makes delegate compensation more independent.

I’m not sure how strongly you feel about this change. MIP61 is pretty much certain to pass once it is up for a vote, regardless of the details. If we need to go back and debate this detail then what process would you propose? Informal poll?

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I agree - this point is very unlikely to affect whether it passes or not.

It was sort of polled in your original thread and had 50% abstaining and the next highest option selected was 10 delegates. But I think things were a lot less clear back then when the question was asked and participation was low. I’m not sure what the appropriate process is here. Maybe @LongForWisdom or @prose11 can suggest an appropriate course to take.

I personally think including a cap doesn’t have any downsides and is a good safety feature to have so it’s more of a suggestion from my point of view.

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Well, if we had 11 delegates then they would find themselves in a situation where persuading one of the delegates to resign and drop out would increase the compensation to the remaining delegates. That is an unpleasant zero-sum game dynamic.

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They could also vote to increase that parameter of max compensated delegates. Assuming we had delegates who were all contributing and the cap was in the way, this would be a straightforward thing to get passed, incidentally, by the delegates themselves :slight_smile:

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So my thinking on the amounts here has evolved a bit in the past few days. Given the difficulty in attracting and retaining delegates, I’d suggest that we move to a higher maximum annual compensation per delegate.

To give a little more colour here, we’re seeing delegates unwilling to accept the legal and regulatory uncertainty at the proposed rate of compensation. I think it’s unlikely that this uncertainty is going to go away at any point in the near future.

If we don’t increase this, I think we will end up in a situation where delegated MKR continues to centralize to only a handful of delegates.

Given that we’ve clearly undershot initial compensation here I would propose leaning towards overcorrection rather than further exacerbating the issue. I’d suggest increasing it 3x the current value to 144k. This is roughly equivalent to a CU facilitator at >10k MKR delegated.

To avoid low quality delegate spam. I would suggest keeping the current thresholds for communication and participation.

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I have been thinking this for a few weeks already, but I hesitated to propose any change until at least the MIP61 initial amount of 48k was flowing. Given that

I’d say this has become more urgent. 100% support

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As a CU facilitator, I can clearly see the value of having delegates, it’s a clear net positive (even without agreeing on everything).

The system is far from perfect, but it’s an improvement and only the start.

Fully in support.

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Absolutely agree with the statement that this issue has become more urgent. I was very relieved to see (surprised, even!) that @PaperImperium decided to stick around even after his signal request failed to pass.

The long-term success of Maker—regardless of the mission statement we decide to rally around—will require a healthy governance process, spearheaded by a diverse set of engaged and smart delegates. We won’t be able to cultivate this as a DAO without proper incentives in place. The opportunity cost in this sector is simply too high.

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Changelog:

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Changelog:

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