[MIP-#1] Ratifying Mangrove DAO’s Governance Model v0

🗳 Governance proposals
1

Summary

This proposal seeks to ratify the Governance Model of Mangrove DAO, establishing a foundational framework that integrates multi-stakeholder governance with specialized councils. This model serves as a precursor to a comprehensive constitution, aligning with the DAO’s strategy and providing balanced representation across its community.

Rationale

Ratifying a clear and structured Governance Model is essential to foster strategic decision-making informed by diverse perspectives within Mangrove DAO. It ensures operational efficiency, transparency, and accountability, laying the groundwork for a dynamic and responsive governance system.

Specification

Mangrove DAO’s governance model combines multi-stakeholder general governance with specialized councils, analogous to legislative and executive branches in a parliamentary system. General governance sets strategic directions and policies, while councils, elected or appointed by the general governance, are responsible for operational execution and remain under its overview.

1. Multi-Stakeholder General Governance

General governance at Mangrove DAO encompasses:

  • Strategic Decision-Making: Overseeing high-level goals and strategies of the DAO.
  • Council Oversight: Electing, funding, and overseeing council decisions.
  • Operational Oversight: Evaluating and approving key operational proposals initiated by the councils or the community.
  • Metagovernance: Updating and refining governance parameters and processes.

Stakeholder Groups in Multi-Stakeholder Governance:

In contrast to coin-voting governance, multi-stakeholder governance in Mangrove DAO is designed to ensure that strategic decisions are mutually beneficial for different interest groups, reflecting a diverse array of perspectives and concerns within the ecosystem.

  • Token Holders: Those who hold Mangrove’s governance token have a say in its direction. This group includes investors, users, and anyone eager to actively participate in Mangrove’s ecosystem. Their participation ensures that a wide range of voices are heard, particularly those with a vested interest in the protocol.
  • Builders: Long-term contributors integral to the protocol’s success, including core team members, advisors, and key specialized service providers. Their focus is on ensuring the ecosystem thrives sustainably over the long term. Builders bring a deep understanding of the protocol’s needs and a commitment to its ongoing development and growth.
  • Pods: Comprising strategists and developers, Pods are focused on building and operating products on the Mangrove protocol. Their primary concern is maintaining the neutrality and permissionless nature of the protocol, providing them with a reliable foundation for developing their businesses.

Voting Power Distribution:

Each stakeholder group in Mangrove DAO holds an equal one-third share of the total voting power, with each group employing its own method to weight the influence of its members:

  • Token Holders Group: Utilizes coin voting. The more MGV tokens a party holds, the greater their influence within this group. This method aligns voting power with the level of investment in the protocol.
  • Builders Group: Influence varies based on the duration and intensity of collaboration (full-time or part-time). Quadratic voting is employed to smooth out inequalities within the group. The distribution of voting power within this group is self-determined and may evolve over time without external validation.
  • Pods Group: Initially, each pod is given equal voice until their economic contributions can be objectively measured on-chain and there is a sufficient number of active pods. Subsequently, a pod’s voting power will be proportional to its economic contribution to the protocol. The transition to this new model of voting power distribution will be decided by the general governance.

Additionally, it’s important to note that individuals or entities may hold memberships in more than one group. They have the option to consolidate these memberships under a single address for voting or maintain separate addresses to vote independently within each group.

Accessing Groups:

This section explains how individuals can join and exit each stakeholder group in Mangrove DAO’s governance model.

  • Token Holder Group: This group is permissionless. Anyone holding at least one MGV token is automatically a member and can participate in governance decisions. Membership in this group can be exited simply by transferring MGV tokens to another address.
  • Builders Group: Membership in the Builders group is based on cooptation, decided collectively by existing members. While primarily focused on active contributors, the group may occasionally retain members for their valuable experience and insights, even if they become less active.
  • Pods Group: Membership access is managed by the Ecosystem Council, which applies criteria set by the general governance.

2. Councils

Councils within Mangrove DAO are constituted, elected, and funded by the general governance, which also determines their mandates’ duration and composition. While these Councils operate autonomously in managing day-to-day operations, they are accountable to the general governance, particularly for proposals exceeding their predefined mandates or for decisions requiring broader strategic alignment. This structure ensures that the Councils act within the scope and strategy set by the general governance, while also maintaining the flexibility needed for effective operational management.

Roles and Responsibilities

Mangrove DAO establishes two councils to address distinct areas requiring specialized skills:

  • Protocol Council: Responsible for maintaining the Mangrove protocol, overseeing research, technical product management, devops, security operations, and the technical enforcement of governance decisions. It manages both on-chain and off-chain components, including extensions such as SDKs.
  • Ecosystem Council: Takes on the economic and social aspects of Mangrove. Its responsibilities include the curation of public strategies, strategic roadmap development and management, attracting and supporting Pods, managing resources, implementing incentive programs, forming partnerships, and overseeing the DAO’s treasury.

Both Councils appoint specialized teams and individuals, ensuring expertise in their respective domains. Their operational responsibilities also include managing budgets, responding to community inputs, and preparing governance proposals as necessary.

Duties towards Community

Councils are required to document and report their activities on the DAO’s public forum monthly, encouraging community reviews and feedback. They must process community initiatives and ideas, rewarding impactful contributions and responding to all inputs within a reasonable timeframe.

Successful ideas from the forum’s ‘temperature check’ process must be addressed by the relevant Council. The Council must either elevate the idea to a formal proposal or provide public justifications for its rejection, explaining the reasons and considerations behind their decision.

Elections

The general governance of Mangrove DAO is responsible for electing Council members, with the initial mandate set to a 6-month period. The specific details of the election process will be outlined in the first proposal initiating council elections and can be amended by the general governance as needed.

Expertise and Knowledge Required for Council Members

  • Protocol Council:
    • Mangrove technology, particularly smart contracts and SDKs.
    • Building and running strategies on Mangrove.
    • Ethereum/EVM technology.
    • Security in Web environments and crypto.
  • Ecosystem Council:
    • DAO governance and operations.
    • Growth, incentives program, and grant management.
    • Treasury management in crypto and traditional finance.
    • Marketing, communication, and community management.
    • Business development and partnerships.

In addition to electing members, the general governance allocates a budget for the entire duration of the Councils’ mandate. This budget, prepared by the Ecosystem Council, ensures the Councils have the necessary resources to fulfill their responsibilities.

Compensation

Council members are compensated for their work, with the compensation amount decided by the general governance during budget allocation.

3. Relationship Between Mangrove DAO and ADDMA

Mangrove DAO, inclusive of its Protocol and Ecosystem Councils, is the primary entity responsible for controlling, operating, and administering the Mangrove protocol and its ecosystem. In this capacity, Mangrove DAO retains full autonomy and authority over its governance and decision-making processes.

The Mangrove Association (ADDMA) is an independent entity with its own governance structure, board, and funds derived mainly from early private token sales to investors. While ADDMA operates independently, its foundational purpose, as stated in its statutes, is to support the creation and development of Mangrove DAO.

In fulfilling this role, ADDMA functions as a service provider to Mangrove DAO. As such, ADDMA’s role is to facilitate and enable the initiatives of Mangrove DAO, aligning its actions and contributions with the strategies and objectives decided by the DAO.

A comprehensive proposal outlining the past contributions of ADDMA to the DAO and defining its future role will be presented to the governance for ratification in the forthcoming weeks. This proposal aims to formalize the historical activities carried out by ADDMA on behalf of the DAO and to establish a clear framework for the ongoing collaboration between the two entities.

8 Likes
2

Vote is now opened to all MGV holders.

3

Thanks @philh and congrats on the very first MIP!

We look forward to watching a new governance model come into the ecosystem and are excited to see how all stakeholder groups function together.

I just had a couple of points I wanted to touch on:

Giving the council Veto power for proposals may cause apathy amongst participants and also undermine the decentralization of the DAO. Furthermore, it would be great to get more information as to what their Veto abilities extend to? There is a conflict of interest if they are elected, fired, and funded by governance, but they can Veto governance decisions that could affect them.

I think it could be more beneficial and less of a burden on the council to act as a steward of the DAO and help facilitate successful “Temp Checks” to formal proposals which is then decided on by all the stakeholders.

Do you expect subjective voting power to cause issues within the builders group concerning the distribution of voting power and politics? It could potentially be good for the DAO to establish at least a tier system to allocate VP according to full-time/part-time in which members decide who receives a specific tier.

Nonetheless, awesome idea!

1 Like
4

Callen, thank you so much for your praise and comments!

Giving the council Veto power for proposals may cause apathy amongst participants and also undermine the decentralization of the DAO. Furthermore, it would be great to get more information as to what their Veto abilities extend to? There is a conflict of interest if they are elected, fired, and funded by governance, but they can Veto governance decisions that could affect them.

I think it could be more beneficial and less of a burden on the council to act as a steward of the DAO and help facilitate successful “Temp Checks” to formal proposals which is then decided on by all the stakeholders.

There’s a lot to unpack here :slight_smile:
The most important issue you’re raising is that indeed, councils shouldn’t be able to block governance decisions, including and especially decisions to revoke council members, or even a whole council (this issue was also raised here). We intend to fix the loophole in the “Establishing Governance Process” proposal, by enabling token holders to bypass councils for submitting and voting proposals, as long as they gather a support of at least 10% of the circulating supply.

It’s also important that governance decisions are triggered by an independent body. If the governance can vote without the authorization of the Ecosystem Council but then cannot enforce its decision, the problem is still unsolved. Since we’ll be using Snapshot at launch, governance’s decisions such as adding/removing councils’ signers will be enacted by the DAO’s multisig. Hence, we need to have signers that are publicly known and credibly independent from the councils.

Another thing you’re pointing out is the risk to cause participants’ apathy and to undermine the decentralization of the DAO. This observation goes beyond the question of who can post proposals. I do acknowledge that the council model we’re supporting comes with a degree of operational centralization that is not often explicitly stated in DAOs. It’s an intentional design, that doesn’t go necessarily against decentralization.

Most DAOs suffer from voters’ apathy and decentralization theater, even when participation of token holders is supported and encouraged. We think that delegating operational power to a group of elected individuals is a great way to address these issues. Voters are summoned to vote only on critical and strategic decisions, as opposed to countless technical matters requiring time and expertise that most don’t have. We expect less voters’ fatigue as a result. Also, having elected people with a clearly scoped, time and budget-limited mandate makes the system less prone to be manipulated by charismatic individuals or by an independent company or foundation.

Finally, you’re mentioning the role of stewards that councils could play in this context. I wholeheartedly agree! Maybe something was lost in the way it’s been phrased, but this is actually the intent behind the paragraph that you’re quoting! Councils have the duty to collect and process signals from the community, especially when they are submitted as temp check proposals, and to facilitate their implementation. It’s not an option. Yes, ultimately they have the right to reject proposals to prevent abuses, but that is a secondary feature of the model. If we give token holders a way to call for a vote (as discussed above), this right is no longer absolute.

One last consideration: along with the ability to post temp checks on the forum, it might be a good idea to invite token holders and the community at large to directly share suggestions to the councils. Not everything need to be voted by the general governance, as already discussed. Implementation of some community-sourced ideas could also be directly steered by councils.

Do you expect subjective voting power to cause issues within the builders group concerning the distribution of voting power and politics? It could potentially be good for the DAO to establish at least a tier system to allocate VP according to full-time/part-time in which members decide who receives a specific tier.

This topic has been debated by builders. The selected system results from this debate, and there’s no subjective evaluation of the VP. I recently added more details on the forum about it, that you can find in this link. I think that the system described here matches what you were suggesting. Let me know if that’s not the case!

4 Likes
5

Exciting times ahead and great steps taken already for the ratification of Mangrove’s Governance model and frameworks!

We’re eager to participate in this model.

4 Likes
6

Thank you for this comprehensive proposal on the Governance Model of Mangrove DAO. It’s clear that a great deal of thought and consideration has gone into developing a framework that integrates distributed decision making and more centralised executive power. This approach marks a significant evolution from the traditional ‘one token, one vote’ model, addressing its inherent limitations by embracing a more nuanced and inclusive system.

The effort building upon both DAO and traditional governance systems, to design something better reflects a commitment to creating a model that is both equitable and effective. The multi-stakeholder approach, in particular, ensures that diverse perspectives are represented, making the decision-making process more balanced and reflective of the entire community.

I am particularly intrigued by the proposed structure of specialized councils, which resembles a board or parliamentary system, ensuring expertise in the decision making process. This structure seems well-suited to balancing strategic decision-making with operational execution while maintaining accountability and transparency.

As we look towards implementing this multi-stakeholder governance system, I am excited to experiment with it and see how it will evolve and positively impact our community.

4 Likes