Launching a DAC: We Value Your Input!
If you’ve been following the eosDAC Github activity or the 5-tech-and-development channel in Discord lately, you know we’re very close to launching the member profile, custodian registration, and and custodian voting portions of eosDAC on EOS. We’re quite excited to be pioneering DAC governance systems, and we recognize how challenging the task is before us. We also know we can’t do it alone. We need your help and input.
The custodians who are elected by the EOSDAC token holders will have a lot of responsibility determining which worker proposals to approve in order to bring the most value to the DAC. They will also have to protect the funds of the DAC for long term, sustainable operations and growth. Not only will their reputation be on the line, but the contract also requires a certain minimum number of EOSDAC tokens be staked for a certain period of time. Of course, some candidates may decide to stake more than the minimum. The thinking behind this is to ensure each custodian candidate has what Nassim Taleb describes as Skin in the Game. It’s a financial commitment to go along with the reputational one that the custodian candidate will act in good faith in the best interests of the DAC and the EOSDAC token holders. To ensure this commitment isn’t short-sighted, the staking period will begin after the member is elected as an active custodian and will update once the member is no longer serving on the custodian board.
Here’s where we need your help.
What should the initial staking amount be and how long should the tokens be staked?
For example, if we set the minimum staking amount to 50,000 EOSDAC tokens, at the current USD trading prices, that will be a bit less than $1,000 worth of tokens. If the staking period is set to six (6) months, then at the point a candidate is elected as a custodian, the staking period begins and will reset once the custodian either resigns, is removed via Special Resolution, or is not elected again. After six months from that point, they will be able to claim their tokens again.
The two questions we’d like input from the community on are:
1) What should the minimum number of staked tokens be?
If we make the number too high, it will exclude those DAC members from registering as custodian candidates who do not have the funds available to do so. If we make it too low, then there will be no real skin in the game anyway. A high staking amount will ensure those who participate in the governance of the DAC have plenty of incentive to value the EOSDAC token while also ensuring some level of financial stability of the individuals servings as custodians who will have to be available on a regular basis for meetings and worker proposal approvals. Not every member of the DAC is appropriate as a custodian while every member does have access to earn and create value for the DAC through the worker proposal system. We also don’t want to exclude worthy candidates who have time to contribute, but not funds available for staking.
2) How long should the staking period be?
The argument for a long staking period of 6 months or so makes sense to encourage long-term thinking over short-term thinking and because adverse outcomes from a custodian’s tenure may take time to present themselves, such as a dispute progressing to a legal claim. At the same time, 6 months in the cryptocurrency space is like a lifetime. Since the unstaking period happens after a custodian leaves, they would then be at the mercy of the custodians [and the markets] who follow after them to protect the value of their staked tokens as they waited for them to become available again. If the period is too short, then any damage done by a bad-acting custodian may not be noticed in time enough to withhold the staked tokens, if needed.
Another question we want to consider is what exactly can a single (or group of colluding) bad actor custodian(s) do? If those actions involve legal repercussions, would the amount of staked tokens and staking time be great enough to help the DAC offset the losses from their actions?
These are the hard questions we’re working through as we finalize launching the DAC as an on-chain, decentralized autonomous community. Those of us who have been working on this for quite some time don’t have all the answers and can’t speak for the whole DAC even if we thought we did. We need your input, and we invite you to leave your thoughts in the comments and join our Discord server in the 6-legal-and-governance channel to help us launch the DAC with defaults we’re comfortable with.
The beauty of EOS is that these settings are not completely immutable but can, by the appropriate resolution of the custodian board, be updated and improved in the future. We can try things out and see what works. Please give us your input to give us a good start.
If you haven’t already, please take a few moments to register your EOS account holding your EOSDAC tokens as a member of the DAC at https://members.eosdac.io/ We have to reach 15% registration by token holders before we can launch the DAC on chain.
Thank you!
-Luke Stokes
Please vote for eosdacserver
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In my very humble opinion, 50,000 EOSDAC at the current value seems a little too less. I would expect min. 100,000 EOSDAC to be staked to be a Custodian. On the other hand, staking them for 6 months does sound like a lifetime!
Thanks for your input!
The concern with requiring too high of a staking amount is that it essentially says that only people with money can become custodians. Some in the community feel this will lead to a plutocracy and not accurately represent all the views of the whole community.
50,000 tokens could be significant to one person while being insignificant to another. You're trying to avoid influence being weighted by wealth but that's the fundamental model you have proposed. You can't have your cake and eat it.
We're talking about a minimum staking amount. Others can stake more, if they like. What you describe as "weighted by wealth" could also be described as secured by stake holders with skin in the game. If you're prefer no skin in the game, I recommend reading Nassim Taleb's book mentioned in my post. If you disagree with his fundamental analysis, that would be a fascinating discussion indeed. If you agree with it, what suggestions do you have to find a balance? We're looking to find a sensible starting point, not a forever consensus. Once the DAC launches, members could vote in custodians who will change these values.
If you have a better approach than staked-weighted voting (also used by DPoS which includes Steem, BitShares, and EOS), what is it?
You're right that the people making decisions need to have their intrests aligned with the success of the DAC. Wealth is a metric to use but perhaps it's not the be all and end all. I think the following stats could be useful as part of an equation to determin how much 'skin' a member has in the game.
Members activity score
Give members an involvment/activity score calculated by how active they are with voting, proposals, giving suggestions ect ect
Members peer rating
Allow members to endorse each other in some way.
Thats all ive got for now, ill keep thinking onit.
Nice ideas. I do think reputation and identity are critical for a well-functioning voluntary system, but I also think we have to protect privacy. Finding that balance is going to be interesting. Also, whenever we create a formula for how we score reputation, it will be gamed. That's the tricky part.
Yeah i have'nt been able to get round people gaming it. Tbh this is why i've been putting energy into creating games, manga and other art that contains a moral story. I feel like teaching people from a young age about societal injustices through these mediums negates the need to enforce fairness in the first place. But thats another conversation alltogether. Keep up the good fight!
50 000 - 100 000 EOSDAC, for me personally, looks like a golden mean) Good article, Luke. Thank you!
Given that it's a minimum being discussed here, what about having it lower and letting anyone who thinks it should be higher use a higher amount as part of their candidacy platform? If it's too high (50k is $1,326 at today's prices), then those who may do a fantastic job as custodian (intelligent with plenty of time but maybe not so much money) would be excluded.
I'd say a low cap, but a long staking period. Long time commitment seems much more valuable than money invested.
The 'skin in the game' argument doesn't seem to work all that great here on Steem. Maybe we should recognize that both time and money are investments. I would value a time investment over a money investment for a custodian, but only when the commitment is long-term.
6 months is short imo. Yes, things can change rapidly in crypto-land, but we don't want custodians chasing hypes. We want structural progress towards DACs that someday will be massively adopted.
Ah, interesting. Some think 3 months is too long. Finding consensus is fun. :)
Right now, we have it set to 3 months as we're discussing it. Some think it should only be 1 month. Maybe something like 4.5 months would be a good compromise?
Six months is a long time but those having the means to 50k-100k don't want to be tie up for six months. Those that commitment tend to grew roots, a by product of good people.
I agree that real commitments should (in theory) attract people who are serious about being involved to improve the DAC for everyone. That said, I don't want to exclude good candidates either because the amount is too high or because the stake lock up time is too long.
I'm watching and learning. My thoughts are skin in the game for at least 6 months. I don't know how much skin would be appropriate.
My reasoning who would hire someone for less than 6 months? Especially for a young project.