PIP-61: Increase Quorum Threshold

Governance Proposals
1

PIP-61: Increase Quorum Threshold

Abstract:

This proposal suggests increasing the quorum threshold from 2% of the circulating PSP supply to 8%.

Goals & Review

  • Boost community participation in governance votes
  • Ensure decisions represent more PSP holders
  • Build trust in the ParaSwap DAO by requiring wider agreement.

Means

Update snapshot strategy

Implementation Overview:

ParaSwap’s governance rules, updated by PSP-IP-33 on March 20, 2024, set the quorum at 2% (30M) of the circulating PSP supply. This means a proposal needs votes from at least 2% of PSP holders to be valid. Quorum should scale with the DAO’s size, stakes, and security needs, ensuring decisions reflect a meaningful portion of the active community while remaining achievable.

Fundamentally, quorum ensures decisions have enough community support to be legitimate and representative. It protects against unrepresentative outcomes or malicious exploitation by requiring a minimum level of participation.

If participation is too small relative to circulating supply, decisions may lack broad support or be gamed by a minority. As PSP grows or its decisions become weightier, a higher bar may better reflect community intent.

chart
chart600×371 8.57 KB

With PSP’s circulating supply at around 1.5B, 2% is just 30M PSP. This low bar could let a small, coordinated group control outcomes as the DAO grows. Looking at the past 10+ votes, all have easily gathered over 120M in quorum. Thus we propose to increase the quorum to 8% (120M PSP). This helps safeguarding against minority dominance, especially for critical votes like treasury use or protocol changes as well as demands higher community participation.

Time of Implementation:

If the proposal passes, the changes shall be implemented to the snapshot strategy

Budget:

There is no cost associated with this implementation

Risk Assessment:

There is always a risk of not enough PSP voting on proposals. However initatives such as the delegate incentive program help mitigate this risk

6 Likes
2

Thanks for your proposal!

I agree with the reasoning and think it would be a good idea to increase the threshold. Historically, since PIP-33, most of the proposals got at least 200% of the quorum (29 of 31).

However, I’m not sure about the new threshold suggested. (22 of 31 are above 400%). This could introduce unnecessary difficulties in the governance process, and the impact of the DIP is not well-known yet.

27 of 31 proposals got over 300% of the current quorum (I believe it translates to 6% of the circulating supply). It seems a well-balanced choice between enhancing the governance resilience and introducing requisites that may hinder the process.

I hope it makes sense!

3 Likes
3

Thank you @jengajojo_daoplomats for taking the time to write this proposal up, it has been on many’s minds for a while now.

Totally for this though I think @jameskbh makes a good point here that I’d agree with, 5-6% probably seems more reasonable to avoid unnecessary risks.

1 Like
4

Thanks @jengajojo_daoplomats for this proposal, it was an topic that we and other delegates felt was necessary given the current state of the DAO.

However, we agree with @jameskbh that while it is clear that the quorum needs to be increased for security reasons to prevent possible risks to governance, it is still too early to know the impact of the DIP, in fact 3 new delegates have presented themselves in the last 20 days which shows that the DAO is in the process of adapting to the new circumstances that we have promoted. Perhaps it would be prudent to take a more gradual approach, to increase the quorum at this time by a slightly lower percentage than the 8% proposed, to avoid any possible risk of paralysing the DAO, and in a few months time, when the DIP is more consolidated, to review this topic, analyse again what participation has been and decide whether a new increase in the quorum is appropriate. Does this make sense?

In another matter, and regarding the formality of the proposal posted in the forum, we would kindly request that you edit the title to “PIP-XX: Increase Quorum Threshold” to comply with the PIP framework. According to the guidelines, during the debate stage, the appropriate nomenclature is “PIP-XX,” and the proposal should only be assigned a number once it is submitted to Snapshot. This ensures numerical correlation between the proposals posted on Snapshot, as multiple proposals may be debated simultaneously, and one may take longer than another. Assigning the number only when it goes to Snapshot guarantees numerical consistency at the start of the voting process.

2 Likes
5

The rationale behind this proposal makes sense, and we would be in support of implementing the higher quorum threshold. In an effective governance system, quorum should not be easy to reach—but it should simultaneously prevent stagnation in being able to pass proposals simply due to voter apathy. The current 2% mark is clearly too low. We think anywhere between 6-8% as of today would be a satisfactory earmark.

The DIP should reasonably help prevent voter apathy over the next handful of months. We have also seen new delegates register their comms platforms, indicating more eyes on the forums and therefore a higher likelihood of proposals reaching quorum.

2 Likes
6

Thank you for the feedback @jameskbh @SEEDGov @Avantgarde @AranaDigital There seems to be a consensus to update the quorum to 6%.

The forum does not allow me to update the main proposal. However, here is an updated version based on all the feedback:

PIP-XX: Increase Quorum Threshold

Abstract:

This proposal suggests increasing the quorum threshold from 2% of the circulating PSP supply to 6%.

Goals & Review

  • Boost community participation in governance votes
  • Ensure decisions represent more PSP holders
  • Build trust in the ParaSwap DAO by requiring wider agreement.

Means

Update snapshot strategy

Implementation Overview:

ParaSwap’s governance rules, updated by PSP-IP-33 on March 20, 2024, set the quorum at 2% (30M) of the circulating PSP supply. This means a proposal needs votes from at least 2% of PSP holders to be valid. Quorum should scale with the DAO’s size, stakes, and security needs, ensuring decisions reflect a meaningful portion of the active community while remaining achievable.

Fundamentally, quorum ensures decisions have enough community support to be legitimate and representative. It protects against unrepresentative outcomes or malicious exploitation by requiring a minimum level of participation.

If participation is too small relative to circulating supply, decisions may lack broad support or be gamed by a minority. As PSP grows or its decisions become weightier, a higher bar may better reflect community intent.

With PSP’s circulating supply at around 1.5B, 2% is just 30M PSP. This low bar could let a small, coordinated group control outcomes as the DAO grows. Looking at the past 10+ votes, all have easily gathered over 90M in quorum. Thus we propose to increase the quorum to 6% (90M PSP). This helps safeguarding against minority dominance, especially for critical votes like treasury use or protocol changes as well as demands higher community participation.

Time of Implementation:

If the proposal passes, the changes shall be implemented to the snapshot strategy

Budget:

There is no cost associated with this implementation

Risk Assessment:

There is always a risk of not enough PSP voting on proposals. However initatives such as the delegate incentive program help mitigate this risk

2 Likes
7

The proposal to increase the quorum threshold from 2% to 8% we think is pretty reasonable. Going through the quorums, the consensus to update to 6% is also reasonable and we think it makes sense.

Some members who advocated for a more moderate adjustment to 5-6% to balance improved security with maintaining active participation is likely a good starting ground and we are in support.

A gradual approach, increasing more later possibly after observing the impact on community engagement should create a balanced and inclusive decision-making process.

8

Thank you for making this proposal.

The 8% seems acceptable to me. As shown in the voting participation chart published by @jengajojo_daoplomats, it’s clear that this rate wouldn’t have posed a problem in any of the recent votes.

9

We support the idea of allocating 6% of the circulating supply, as other delegates have mentioned.

Additionally, in Project Miro, I suggest distributing rewards to stakers who either delegate their voting power to an active delegate or actively participate in governance—similar to what Arbitrum DAO is planning. This approach provides strong incentives for stakers to engage in governance, ultimately strengthening the system. As a result, we will be able to increase the quorum again.

10

Good to see the quorum adjusted to 6%. 8% felt a bit too high and could’ve made it harder to reach quorum. The delegate incentive program is clearly working, bringing more people into governance, which is a good sign.

I always support decentralization in every DAO I’m part of, so I’ll support this proposal. It helps prevent power concentration and ensures the DAO truly reflects the community’s voice.

1 Like
11

Great work @jengajojo_daoplomats, 6% feels spot-on for now with room for future tweaks as
@SEEDGov suggests. Not much value I can add anymore as all comments align nicely! Kudos frens

12

We support changing the quorum number, though not to 8% of the circulating supply. We’d be on board with raising it to 6% as other delegates have suggested. To reduce potential risks, we think this should be done in two steps. First, we’d double the current quorum requirement. Then, after reviewing the impact of that change, we’d propose a second update to increase it by 50%, bringing it to 6% of the circulating supply.

13

We’re in favor of this quorum increase. 6% better reflects actual participation levels (120M+ PSP consistently voting) and it could be adjusted upwards later on down the line if needed. One thing to consider is creating clear metrics to monitor its impact on proposal velocity. The key is balancing security with governance efficiency and making sure that our speed of decision-making isn’t significantly negatively effected

14

At WakeUp Labs, we support increasing the quorum threshold to 6% as a meaningful and balanced step forward. Since recent governance activity has consistently reached this threshold, raising it to 6% should not create any issues. A higher threshold might ensure that proposals have broader support and reduce the risk of governance capture by a small minority.

2 Likes
15

Thank you to everyone that has shared their feedback.

Following the positive feedback we have received from the proposal, we are initiating the 48hr frozen period for PIP-61.

3 Likes
16

Thanks to @jengajojo_daoplomats for bringing up the idea of increasing the quorum, this is something we’ve also noticed and mentioned in our own proposal.

As highlighted in the forum post:

This kind of imbalance clearly shows the risk of the current 2% quorum, it’s simply too low and doesn’t reflect the growing size and influence of the ParaSwap DAO.

We support increasing the quorum to 8% to ensure that governance decisions are backed by a broader and more representative base of token holders.

Additionally, we’d like to suggest a further refinement:
Different quorum thresholds for different proposal types for example, one for the Core Governor and another for the Treasury Governor.
This would ensure that more critical or sensitive proposals (like those affecting treasury funds) have a higher minimum participation requirement.

We believe this would lead to a more secure, accountable, and community-driven governance process.

1 Like
17

Makes a lot of sense.

Voted FOR