The future of work lies within Digital Organizations (DOs). These are the cousins of DAOs, still digital, but not fully autonomous. Rather than relying strictly on code, DOs rely on humans and tokens to coordinate. - David Hoffman - Bankless
The PowerPool DAO is summoned to enable investors to pool their efforts to achieve balanced, longer-term investment performance more efficiently than could be achieved individually. The objective of the DAO is to increase the value of the CVP token, provide superior returns to those who stake xCVP, known as the 'Illuminati', and to increase the liquidity and financial flexibility of investments in CVP/xCVP.
Key metrics guiding the DAO will include DAO Net Asset Value (NAV) normalised by xCVP staked, NAV normalised by CVP in circulation plus Treasury/LP pooled CVP, and also NAV fully-diluted by all potentially stake-able authorised CVP, including unissued and unvested CVP. These metrics will be periodically reported formally by the DAO in PowerPool Forums restricted to xCVP threshold staking members.
PowerPool DAO governance will strike a balance appropriate to the mission of the DAO between delegation to an executive Management Board, and proposals put forward periodically for informed stakeholder voting. The DAO welcomes larger investors, but governance is based on quadratic voting, which reduces the influence of the larger stakeholders relative to the smaller.
PowerPool DAO governance processes are designed to balance the inherent tradeoffs between flexibility/agility on one side, and stability/dependability on the other side.
Given that the PowerPool DAO is an activist collective investment scheme, it is essential to lodge some responsibility in a Management Board empowered to represent the DAO and negotiate/contract with third parties. Many jurisdictions around the world are passing legislation to permit some types of DAOs to register as legally-recognised entities. The PowerPool DAO is being reconstituted to preserve this type of option in future.
Governance Platform Evolution
DAOs should theoretically be a vehicle for amplifying collective intelligence. But the tools and infrastructure just are not there yet. You can't amplify collective intelligence on top of Discord and Forums. @Benschecter
Investment management is basically about managing various shortlists of tokens and weighting/re-weighting the holdings on each list, long or short, naked or hedged based on evolving sentiment. Together with governance platform partners, the PowerPool DAO will maintain and evolve powerful governance tools for harnessing the collective insights of xCVP stakers with ‘skin in the game’. For example, the process of proposing and promoting a token successfully added to a product shortlist will be incentivized with rewards, as would be the process of advocacy for moving tokens from one shortlist to another. The re-weighting of pooled holdings will be frequent, and triggered by events. To prevent front-running and other gaming of the treasury and various public vehicles/tokens, the results of various governance processes are only reported by the DAO retrospectively, with time lags.
Some members of the Management Board also act as DAO Forum moderators to maintain the feedback processes and document the ideas for ongoing and milestone voting by DAO xCVP stakers
Some typical PowerPool DAO community feedback mechanisms include:
- Adding/removing a token to/from a product shortlist; quadratic weighted voting yes/no, one week delay result on single token only; rewards for proposer/promoter, one week delay on announcement of result;
- Tokens from each product shortlist nominated/selected weekly based on fundamentals tracking and flash polling, comparative quadratic +1 bull, or -1 bear voting, one-week delay result on selected tokens only;
- Ranking of pre-screened thematic candidate token lists for new thematic pools being launched or re-structured; quadratic-weighted forced rankings, probably 1 through N, where each xCVP stakers assign a ranking to each token, including 'decoys'. The resulting ranking is reported back with at least one-week delays, and the numbr of tokens on the pool's initial launch list may be randomised based on other inputs from fundamentals tracking.
Participation in the voting is incentivised in various ways. Each xCVP wallet is tracked for voting delegation, participation and correlation with outcomes. Although there are no, or only light slashing penalties for holding CVP/xCVP totally passively, voting frequently increases the chances of rewards, especially if your (anonymous) voting pattern closely tracks the consensus outcomes. You might even win a PowerPool MVP NFT!
Issue: there are currently open issues about how total xCVP holdings for a given wallet which is also engaged in either/or DEX LP & Lending will be tracked across ever-increasing numbers of DEXes & Lending sites.
The PowerPool protocol has the ability to support not just the DAO Treasury and PowerPool DAO bull/yield vehicles, but also external fund managers, strategists, and methodologists, who could use PowerPool NFTs to identify the vehicles they manage via the protocol. The DAO will vote before going forward with any external Fund Manager/Methodologist in part based on the extent to which the methodologist has name recognition and their own following to aid in gathering minting liquidity and marketing their pooled vehicle.
Summary of Venues, Quorums & Thresholds by decision types:
Venue refers to whether the voting takes place on the DAO Forum, some more informal/specialised part of the Governance platform, or in some cases, just among the Management Board. Quorum refers to the percentage of eligible stake-weighted votes required for a vote to be valid. Threshold refers to the margin by which the affirmative vote must exceed the negative vote for a DAO Proposal to be actioned.
All staked xCVP is eligible to vote, but experience of other DAOs shows that a certain percentage of staked xCVP will become inactive for extended periods, and therefore the Quorum calculation needs to be based on ACTIVE xCVP (~xCVP). The calculation of eligible active ~xCVP for voting/quorum calculation purposes is based on rolling tracking of voter participation.
PowerPool Shortlist Management Governance Parameters
New Product Specification - (no initial financial commitment)
- Forum Proposal to add a new pool and refine launch parameters
- Quorum: xx% ~xCVP; Threshold: 1.x to 1, i.e. simple majority yes/no
New Product Launch-Power Universe
- Forum Proposal to launch new pool with defined parameters
- Quorum: xx% ~xCVP; Threshold: 1.5 to 1, i.e. two-thirds majority yes/no
Re-weighting Proposal - (new/removed tokens enter/leave with zero weightings)
- Forum Proposal for re-weighting of public pool, token(s) to be increased/decreased
- Quorum: xx% ~xCVP; Threshold: none, simple majority yes/no
Launch Externally Managed Pool - powered by PowerPool (no whitelist control)
- Forum Proposal to Launch - Powered by PowerPool
- Quorum: xx% ~xCVP; Threshold: 1.5 to 1, i.e. two-thirds majority yes/no
Risk Management position limits - (all limits start at zero)
- Forum Proposal - Treasury hedging/shorting limits, CVP & other tokens;
- Quorum: xx% ~xCVP; Threshold:
- Forum Proposal - hedging of public pooled neutral-yield vehicles;
- Quorum: xx% ~xCVP; Threshold:
Treasury Management - (buy, sell, LP, lend, borrow CVP or other shortlisted tokens)
- Forum Proposal - approvals to buy, sell, stake (as LP or Lender) CVP;
Quorum: xx% ~xCVP; Threshold:
- Forum Proposal - CVP Flash loan limits & fees;
Quorum: xx% ~xCVP; Threshold:
- Forum Proposals to burn CVP;
Quorum: xx% ~CVP; Threshold:
Grants & Donations for Community Development/Charities
Quorum: xx% ~xCVP; Threshold: 1.5 to 1. I.e two-thirds majority yes/no
Delegated Meta-governance - Tokens with governance power held in the PowerPool Treasury or pooled public vehicles will be automatically delegated to Powerpool DAO, enabling ~xCVP holders to vote in that protocol’s governance decisions.
- Voting DAO Treasury holdings;
Quorum: xx% ~xCVP; Thresholds:
- Voting public pooled vehicle holdings:
Quorum: xx% ~xCVP; Thresholds:
Safeguards/Protocol Abuse response - Halting Trading/Risk Management Caps
Unlike finalized pools in DEXes, internal trading in PowerPool public vehicle pools can be halted. Emergency transactions can be prepared via a vote of DAO token holders and broadcast in the future under specific conditions that require trading to be halted. These transactions can be triggered based on multiple conditions by bots monitoring the mempool for abnormal behavior regarding the price and total supply of the underlying assets, in order to minimize the risk of a single asset collapse draining the entire pool.
Over time, PowerPool believes live risk statistics and predictive analysis regarding the likelihood of a specific asset defaulting will be essential tools for liquidity pools (and shorting grey-listed tokens) to succeed. Internal safeguards against various risks are constantly being refined.
- Pool caps, maximum capacity limits for experimental pools
- Circuit-breakers, halting internal trading in public pool tokens
- Change limits, maximum periodic changes designed to limit impact of flash loans
PowerPool Management Board - There will be term rotations and (re-)elections of Board members. If a Board member resigns or does not win re-election, the other Board Members must submit at least 2 replacement candidates for DAO voting.
- Management Board positions - increase/decrease from 8?
- Management Board rotating re-elections - staggered 2 year terms. Existing Management Board Members up for re-election in 6 months or a year. New Management Board members being added for 2 year terms.
- Tabling draft Forum PPIPs for DAO voting - mimimum 2 Board Members (25%) supporting
- PowerPool Forum/DAO Moderator(s) - SparkDAO Team Leader/Moderators must be re-confirmed every year
PowerPool Forum Evolution
Formal Proposals to the DAO can start on Discord with intriguing ideas referred to Team Leaders for discussion/option generation within the relevant SparkTeam(s). Promising options will eventually move to the PowerPool (Discourse-based) Forum, which will be strongly-moderated to manage signal/noise and clutter, since any xCVP>1,000 staker can post suggestions in the Forum.
SourceCred has been successfully trialed by MakerDAO to increase Forum idea flow and participation. The initial trial was successful and is being extended. The data and metrics provided by the Discourse Forum platform are impressive, and emphasize that PowerPool needs to pay attention to analytic metrics on governance as well as protocol rebalancing. More info on SourceCred
It is important to have the appropriate Forum rules for investment management. To set the tone of the Forum, the chief moderator account should be called ‘Gordon Gekko’. In the movie ‘Wall Street” our mentor Gordon Gekko had strong views over how to manage this. Rules for the PowerPool Forum should be something like this:
- This Forum is for considered, long-term conversation on structured investment management issues. NO shilling or memes! Topics/posts/replies with low information content will be ruthlessly moderated. Only comment if you’re adding a thoughtful, new idea, i.e. more signal than noise. If you agree with an existing statement, just indicate your agreement with a ‘like’ instead of cluttering the thread. Evolving proposals will be subject to flash polling to gauge sentiment, so there will be other ways to signal your approvals and disapprovals.
- Please read the Forum rules and FAQ! They contain a lot of advice for how, and more importantly how not, to be a productive Community member.
- Please keep posts in English. Whilst we welcome discussion on Discord in other languages, we don’t support the Forum in any other languages, although proposals tabled for a formal vote by the DAO may be translated.
- Proposals which do not gain enough support on the Forum after a sufficient period of time, will be summarised, abstracted and all details deleted.
Model Forum FAQs
Routine on-going decisions - Off-chain Forum voting
Routine soundings or flash polls of Forum members’ sentiment, whether regarding evolving proposals (not xCVP-weighted), or modulating multipliers for weightings on token holdings (xCVP-weighted), will be managed mostly on the Forum, and not via formal on-chain voting in the DAO. Routine Forum flash polls are gas-free and data and reporting managed via the Discourse Forum platform. Rolling cumulative polling results may or may not be visible in real-time, with outcome(s) reported, or potentially kept confidential for 1 week, so some degree of moderation may be required in some cases.
Non-routine decisions - On-chain DAO Voting
Non-routine decisions are made through xCVP-weighted DAO community consensus by the developing PPIPs (PowerPool Improvement Proposals) initially on the Forum. Once the intent and wording of a Proposal has been refined enough to attract sufficient flash poll support, a quorum of 2 Management Board members can decide to table the Proposal to the DAO for a formal vote. From new products to budgets, everything is decided as a community of voters through the staked xCVP token.
The Management Board has discretion at which point, and how formulated a well- constructed PPIP that has been reasonably well-received in the Forum is tabled for formal voting.
❌ Voting on poorly-constructed PPIPs creates confusion
✅ It’s better to use informal polling inside the Forum discussion to gauge sentiment
Strong moderation of the Forum discussion preceding the Management Board members decision to table the Proposal to the DAO helps ensure that PPIPs are thoughtful and well-crafted. A well-crafted PPIP enables developers to take action quickly to implement community initiatives, fostering ownership and rewards for members able to follow every step of their own proposal, allowing the organization to scale as more contributors can easily pick up a proposal to work on.
Proposal Development Process
The process of creating a successful PPIP usually begins with informal discussion, either through our Discord community, other social media platforms such as Twitter, or preferably on the PowerPool Forum. Given that Forum access is restricted to stakers of 1,000 xCVP minimum, the PowerPool Discord channel will probably be the foundational communication and coordination hub for the community. To reduce noise, shilling and memes in the Discord Forum, however, PowerPool should implement a restricted access Proposals/Governance channel on Discord. The future PowerPool Discord Proposals/Governance channel process should operate similarly to the Bankless DAO Discord channel.
If there is some encouragement from the Moderators on Discord, the process to create a PPIP follows three stages:
PPIP Stage 1: Discussion / Idea
An idea-discussion is the first step in proposing a PPIP. If it's a proposal for an entirely new product, it is likely that during this phase the proposal won't have a model or a technical spec attached to it yet. Ideas are important as they allow members to be creative, but it’s important to make sure those ideas progress into actionable PPIP in order to be implemented.
PPIP Stage 2: Agree wording of PowerPool Improvement Proposal/PPIP
A PPIP with agreed wording is a proposal with actionable steps for the DAO to be working on. Based on flash polling support for candidate Proposal wordings, at least 2 of 8 Management Board members have to sponsor tabling the Proposal to the DAO.
PPIP Stage 3: Voting on tabled Proposals
Once a mature Proposal is tabled to the DAO for a vote, it should have everything it needs to be implemented; there was rough consensus on the Forum post to refine the wording, the minimum number of Management Board members have supported tabling the proposal to the DAO as a whole, and translations may have been prepared into principal staker languages. It is time to submit it to the (xCVP weighted) judgment of the community.
Voting Process- PowerPool uses different voting mechanisms depending on how routine a proposal is, and what stage of the governance process the proposal is in.
Forum flash voting is used to gauge interest and ranking of non-routine draft proposals, in order to determine how much prospective support a proposal has. These votes are not weighted by xCVP. Once the wording of the proposal is agreed and at least 2/25% of the Management Board has supported tabling the PPIP to the DAO, control of the process passes to the DAO discussion platform BoardRoom, and voting is weighted by staked xCVP. Boardroom allows xCVP holders to sign a message from their wallet to signal support or opposition to a governance proposal without having to spend any gas on an Ethereum transaction.
Decisions that require the deployment of the DAO’s Treasury funds via the multi-signature wallet must be ratified through Aragon.