PIP-66 - Deprecation of the Governance Committee

Governance Proposals
1

PIP-66 - Deprecation of the Governance Committee

Authors: @Laita and @SEEDGov

Abstract:

With the introduction of WakeUp Labs’ new automated distribution system in PIP-55, the main role of GovCo is now not needed anymore. Additionally, the currently established delegate structure allows for a more trustless process for PEP approval than the one previously assigned to GovCo.

Considering the operational overhead the structure creates (5000 usd/month), we propose to remove this structure, and instead reorganize the signers of the GovCo wallet (the fee claimer wallet multisig in Ethereum).

Additionally, we propose that now Express Proposals be approved not by an internal vote of GovCo, but rather needing approval from either service providers or top delegates.

Goals & Review:

The Governance Committee was a new governing body introduced along with PSP 2.0 to control the uncertainties of a system that was highly experimental and untested in DeFi. Thanks to the introduction of the committee, it was possible to assess how the new system was doing, propose alterations during the trial period, and introduce Express Proposals as needed.

The initial framework of the GovCo, which has been updated and is therefore currently in effect, establishes that its duties are:

  1. Determine whether a proposal qualifies as a PEP and publish it for a vote on Snapshot.
    • As per usual, anyone will be allowed to publish their own PEP.
    • Once the proposal is considered ready for publication by the author, they request the Governance Committee to post on Snapshot.
  2. Handle the creation of the recurrent transactions needed to support PSP 2.0 operations:
  3. Upgrade Module sePSP1 unstaking, withdrawing, and approval
  4. Support for future manual transactions specified on their own proposals
  5. Verify and sign transactions needed to support PSP 2.0 operations
  6. Monitor and report potential vulnerabilities or unintended uses of the Social Escrow PSP system, and trigger Emergency Measures if necessary.

It should be noted that, with the exception of duty ‘1’, all other duties relate to the creation, verification, signing and execution of transactions and the monitoring of PSP 2.0 operations, specifically in relation to fee distribution, which are managed from the Fee Claimer Wallet multisig on the Ethereum Mainnet.

Despite the benefits that GovCo brought, the structure was meant to be a temporary centralized effort until a more trustless solution was found, which has been introduced thanks to the ‘PIP-55 - Reward Mechanism Automation’ approved last December and the development based on it that has culminated in the successful implementation of automation in the calculation and execution of the fee distribution and gas refund transactions. Now that distributions are verified by the entire DAO through oSnap, this function of GovCo is not performed anymore, so this structure has lost its main purpose.

Besides the signing of distributions, the only other role GovCo was to determine whether a proposal qualifies as a PEP proposal, according to the current framework for PEPs voted in PSP-IPΔ22: PSP 2.0. This, too, was a temporary centralized solution, and despite helping ensure that not all proposals counted as PEPs it still relied on less than 5 members to advance Express Proposals. Since then, ParaSwap DAO has advanced significantly in its delegation and participation system, allowing for a more professional set of decision makers to make these kinds of decisions.

In consequence of the above, this proposal wishes to discontinue the Governance Committee and propose an alternative for the following reasons:

  1. Simplification of redundant DAO governance structures.
  2. Reduction of running costs (~5k USD per month)
  3. Decentralisation of decision making and verification.

Means:

The means of this proposal can be divided in the two roles that GovCo is currently taking: the ownership of the GovCo wallet and the handling of Express Proposals.

1.- GovCo wallet ownership:

We propose the following mechanism to restructure the GovCo wallet:

  • Approval System: 5/8 signatures required.
  • Signers:
    • One representative from the Foundation – Ensures alignment with the broader mission and provides continuity.
    • Four representatives from current DAO service providers. Specifically:
      • Mimic - @brunitob
      • Laita Labs - @Laita
      • WakeUp Labs - @WakeUpLabs
      • SEEDGov - @SEEDGov
        If new service providers are incorporated in the future and express interest, they may be added as multisig signers in even numbers. The signature threshold will be adjusted accordingly to maintain a similar ratio between total signers and required signatures (e.g. 7/10, 8/12, 9/14, etc.).
    • Three top delegates by voting power and active participation in voting and in the forum, excluding SEEDGov – Delegates will have to be existing recognised delegates with a Delegation platform established at least 30 days, with the voting power being present at the time of the designation as signer.
      Every three months a review will be conducted to assess the voting power and active participation of delegate signers, in order to update the signer composition if any changes occur.
  • Signing Timeframe: Transactions are expected to be signed within 24 hours of creation, except in urgent cases where a shorter signing window may be required.
  • Signer Commitment: All signers are expected to remain active and sign within the established timeframe. If any signer repeatedly fails to be available, steps down, or shows disinterest in fulfilling the role, the remaining signers may replace them with another active community member according to the following process:
    • If the signer to be removed is a DAO Service Provider, another potential new future service provider not yet onboarded may be added as a signer to maintain the same number of signers. If no other service provider is available, no replacement will be made, and the signature threshold must be adjusted to maintain a similar ratio between total signers and required signatures (e.g., 5/7, 4/6).
    • If the signer to be replaced is a Delegate, they will be replaced by the next Top Delegate with the highest VP avaiable who is active both in voting and on the forum.
  • Compensation: No compensation is foreseen for signers, as the task requires very low dedication, appealing to a collaborative spirit to play an important role in the DAO’s operational security.

2.- Handling of Express Proposals:

We propose instead for the process to be more open. Instead of requiring a closed vote by GovCo, new Express Proposals will have to be approved by either two of the existing service providers (as of the time of writing, Mimic, Laita Labs, WakeUp Labs, SEEDGov) or by 3 of the top 5 delegates.

If additional service providers are incorporated, the threshold required to approve whether a proposal qualifies as a PEP will increase by one for every two new service providers (e.g., 3 of 6, 4 of 8, etc.).

Delegates will have to be existing recognised delegates with a Delegation platform established at least 30 days, with the voting power being present at the time of proposal creation in the forums, and active participation in voting and in the forum.

As GovCo’s role has not been needed since the last WakeUp distribution, we also formalise that Epoch 30th will be the last compensated Epoch for GovCo.

Implementation Overview:

  1. Immediate GovCo deprecation.
  2. Replacement of GovCo signers for the new stakeholders above mentioned, subject to their acceptance.
  3. Communication to GovCo members of the latest proposal, were it to pass.
  4. Distribution of final GovCo payment.

Time of Implementation:

The proposal will be implemented immediately after its passing.

Budget:

The current proposal does not require a budget, and instead would free the DAO of a 5k USD a month commitment.

Risk Assessment:

We believe this proposal represents meaningful progress in decentralizing both the operations of the DAO’s Fee Claimer Wallet on Ethereum, currently managed by GovCo, and the approval process for determining which proposals qualify as PEPs.

The only major concern we can see from this new proposal comes from the Express Proposal decision, although the proposed mechanism which provides for two variants of approval allows for flexibility and speed in decisions. We remain open for alternative ways of proposing PEPs in addition to the one we stated above.

Regarding the GovCo wallet, this proposal will serve as a first test for decentralizing the operations of a DAO-managed wallet. Based on its performance, it will be possible to assess in the future whether this model can be extended to the DAO’s other wallets or not.

6 Likes
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Thanks for laying this out @SEEDGov. We’re in favor of returning any centralizing forces into a more trustless setup, especially if there are operational cost savings involved. It might be good to include a concrete plan for adding new potential service providers to the multisig in a more structured way (e.g. increase the threshold by 1 for every increase with an even number of signers). Also, will there be any alterations should the makeup of the top-3 delegates by voting power change? For example if one of the delegates falls out of the top-3 or leaves the DAO, how will they be rotated out? I guess in simpler terms: will you periodically review/update which delegates are on the multisig?

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We appreciate the @SEEDGov team for spinning this up and taking on this initiative. We are on board with moving to an entirely on-chain flow and sunsetting the Governance Committee. Overall, it seems like the intentions of that were temporary to start with, but if there are counter opinions, would love to see and consider them.

For us, some things this proposal highlights that we thinks makes sense are:

  • Streamlined Approvals: Shifting express proposal sign-offs will greatly speed up distributions without sacrificing decentralization.
  • Robust Multisig: The 5/8 threshold makes sense, strong enough to prevent bad actors but agile enough to keep things moving.
  • Treasury Efficiency: Phasing out the $5k/month GovCo stipend delivers real savings that can now go back into community incentives.
  • Clean Handover: Setting Epoch 30 as the final paid period and automating on-chain approvals ensures a smooth transition with minimal manual overhead.

Again, thanks to the Seed team for this layout!

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Great feedback! Thank you for pointing out those aspects. We have made two editions to the text on that basis.

Regarding this topic, we add the following:

And with respect to this other subject, we incorporate this:

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DAO will save 60K/year and avoid wasting people’s time and effort. That money could be used for other DAO activities.

I think the big win here is the PEP approval process, it makes governance more democratic, transparent, and easy to verify. Plus, fewer admin tasks and unnecessary committees will help streamline the structure.

Makes sense, but what if a delegate suddenly loses VP or steps down for unexpected reasons? What’s the process to onboard a new signer after that? Is it top-down?

Overall, this proposal aligns well with the DAO’s long term goal of reducing centralization and increasing transparency. Will have a yes from me.

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Great proposal! I just wanted to add a criteria here in order to foster increased representation.

If the top delegate holds a seat in any other DAO structure, it should be excluded too

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Thanks for your feedback!

If a delegate suddenly loses their Voting Power VP, they will cease to be a signer in the next quarterly review. We don’t believe it’s necessary to act immediately, as we are dealing with multisig signers and frequent changes to the signer group are not advisable in our opinion. The more stability, the better. Moreover, the loss of VP is not a critical issue that prevents a delegate from continuing to sign, so we see no issue with waiting for the next scheduled review for a replacement.

If any signer is steps down or repeatedly fails to sign transactions within the expected timeframe, they will be subject to replacement. We’ve included the following addition to clarify the process. Thank you for the feedback!

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Why do you believe that a delegate holding a role within a DAO structure should be excluded from being a signer on the multisig? What kind of role overlap or conflict of interest do you see in such a case?

Perhaps we’re missing something, but from our perspective, there’s no reason why, for example, a delegate serving on the Velora Growth Committee couldn’t also be a multisig signer—provided they have sufficient VP and remain actively engaged in the DAO.

Moreover, if we exclude delegates based on holding other non-conflicting roles, we would effectively be lowering the VP threshold required to become a signer, which we don’t think is desirable from a security standpoint.

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If the top delegate holds a seat in any other DAO structure, it should be excluded too

Why do you believe that a delegate holding a role within a DAO structure should be excluded from being a signer on the multisig? What kind of role overlap or conflict of interest do you see in such a case?

Given that the position is not compensated, we don’t think it would be too much of a conflict of interest for members who hold another role in the DAO to sit on this multi-sig. That said, it would help from an inclusivity standpoint to exclude them. It gives more DAO members a shot at being involved in Velora. We don’t have a strong preference either way.

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Thanks for putting this together, @SEEDGov. We share the goal of removing residual centralized choke points and redirecting the $5k per month GovCo budget toward higher-impact initiatives, so we are broadly supportive of the proposal’s direction.

That said, we would like to flag two areas that merit further refinement:

  • Signer incentives
    Multisig operations are fairly low touch, but purely volunteer models often slip over time. A modest or small compensation for non-service-provider signers could help maintain the 24-hour signing target and reinforce accountability.
  • Rotation procedure clarity
    The quarterly delegate review is useful, yet it remains unclear whether each signer change will require its own Snapshot vote or can be executed automatically once criteria are met. A concise, step-by-step outline of the trigger, verification, and execution flow would make the process more transparent for future delegates.

These points are not blockers; they are suggestions to strengthen an already solid plan. We look forward to supporting the proposal once these details are addressed.

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Thanks for the feedback!

We haven’t considered it any compensation, since the activity of that multisig is extremely low. With fee distribution and gas refunds already automated, it typically requires the signing of just one transaction per epoch. That means it involves very minimal effort, and given that the signers are service providers and top delegates who are already being compensated for other roles, we appeal to their willingness to contribute this small additional task for the benefit of the DAO with a very limited and tight treasury.

We also didn’t design the signer seats to be elected through a voting process, as that would require triggering governance every time a change is needed—something we see as unnecessarily burdensome and bureaucratic. Instead, we’ve proposed a framework with clear criteria for who can occupy the seats and how replacements should be handled, so the system can operate automatically based on those rules.

In the latest edit, we’ve included simple process for replacement in cases where a signer steps down or is repeatedly inactive. Do you think more detail is needed? In what direction? We’re open to any suggestions.

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Thanks for your clarification!

This is a great point that we missed and makes sense.

It would be better to add a timeline (e.g. within 7 days) for each process, otherwise they are clearly detailed. Thanks for the additional edit!

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We believe the proposal makes sense, and the DAO’s feedback is helping shape the solution in the right direction.

WakeUp Labs is honored to be considered and will take on the role with full responsibility.

We’ve been contributing to Velora through meaningful discussions, technical input, and active participation in governance. This invitation confirms we’re moving in the right direction.

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Hello. Thablnks for your reply.

The reason was stated in the previous sentence: “to foster increased participation”.

Roles concentration (having the same actors in all places) may contribute for centralization (always relying on the same ppl) reduce knowledge expansion (fewer ppl knowing what is happening), and increase the difficult to onboard new ppl.

But is is only a suggestion. Have a nice Sunday!

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Stake Capital supports this proposal.

Phasing out the Governance Committee feels like a sensible evolution that simplifies the overall governance structure, reduces unnecessary coordination layers, and helps focus efforts on more active contributors and working groups. It’s a good step toward making the process leaner and more efficient.

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Thank you @Laita, @SEEDGov and everyone who has carried the GovCo through ParaSwap 2.0 and now Velora, your tireless work has given our DAO the confidence to evolve our multisig structure and possibly enhance ops. I’m fully behind this proposal to streamline costs and lean into a 5-of-8 signing threshold that strikes a solid BFT balance between resilience and decentralization.

At the same time, I’d like to note and encourage us to bake in a few light safety checks for every signer we rotate in: a short “onboarding audit” to confirm transaction data feeds are being validated and safety checks carried out, perhaps leveraging proven frameworks like OpenZeppelin’s or Den’s. This way we retain GovCo’s spirit of hands-on vigilance without reintroducing potential points of failure and ensure we never again find ourselves in a Bybit-style troubled waters. A simple acknowledgement that signers will perform due diligence is enough for me.

While it’s fantastic that service providers continue in these roles without compensation, returning value directly to the DAO, I believe our delegate signers should receive at least a nominal payment for their time and accountability. Even a small stipend, perhaps governed via our DIP, would help motivate delegate signers to stay engaged and thorough in their duties.

Overall this proposal is the natural next step: cost-effective, more trustless and respectful of every stakeholder’s time and expertise. I look forward to seeing it pass and then welcoming our new multisig signers into a streamlined, battle-tested process that keeps Velora safe and agile. Smooth PEP ops here we come!

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Thanks for the feedback!

Indeed, that multisig is associated with Den to process and execute signatures. Among its helpful features for multisig management, Den allows adding descriptions and links for signers to review, and —regarding your point— it also includes a Simulations function that lets signers verify whether the transaction will produce the intended result before it’s signed. Signers will be encouraged to perform this security check before signing.

As for compensating the signers, the time commitment involved is truly minimal — we’re talking about roughly one transaction per month. Additionally, all proposed signers already receive incomes from the DAO, so we believe this represents a very minor operational contribution in support of the DAO that is already rewarding them, which we consider healthy.
Of course, if activity were to increase significantly, it would be reasonable to consider compensation for the time required. But at this stage, the workload is insignificanrt.
That said, we do agree it could be considered a DIP-related activity in the case of delegates, since it’s a task directly tied to governance.

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I am happy with this, at least it would count towards their score somehow, that would be awesome !

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The progressive move towards decentralizing the multisig operations is of course a positive—along with the 5k per month reduction in overhead costs. While we don’t see this necessarily being an issue any time soon, increasing the number of signers on the multisig, whether it be service providers or delegates, would subject the operations to further bloat. It would be nice considering a cap on expanding the quantity of signers. Rotations can also be implemented over time instead of adding new signers. We’d also not be against increasing the delegate signers’ term duration to 6 months. Usually when it comes to more sensitive roles like multisig signers, the less flux there is between signers, the better. I wouldn’t image there would be too much contention here since the role isn’t paid.

As for the PEP component of this proposal, we are on board. It would be nice to have a place where the top 5 delegates are listed, along with the active list of service providers. I can foresee a scenario where people repeatedly ask, “so who are the people we need to get approval from again?”

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Thank you for facilitating this @SEEDGov. We’ve already expressed our support for this move in the TG delegate chat, but would like to add our thoughts on a few comments made here in this thread:

  • We disagree to some extent that delegates holding positions in other DAO structures like the VGC should be excluded as this does not really involve any decision making so there is little to no risk of “centralisation” in that sense. Plus, lowering the VP threshold is indeed a higher risk. But we are not against the idea for broader participation’s sake if a good enough threshold can be maintained.
  • If some delegates feel that they require remuneration to perform this duty, we either remove the delegate slots and just stick to Laita + service providers, or pass it to someone else who’s happy to do it (though within reason of a VP threshold). How would you even price signing once a month? $50? Seems highly unnecessary and somewhat greedy even.
  • Signing within 24hrs shouldn’t be an issue as long as signers are notified well in advance.
  • Signers should most definitely be vetted beforehand, but we’d assume any added signers should have a trusted standing in the DAO before being onboarded.
4 Likes