Decentralized, Autonomous… and Lost? What Keeps DAOs Functional — ​​Alex and Jen | Lido

works yeah it works great so uh hey everyone uh we are very glad to be here and of course first of all I'd like to thank uh Tanya pet whole and the whole East Belgrade team for organizing this Meetup and for their great effort uh of growing this community and uh thank you all uh for being here and uh all are you are here so it seems like you would like to listen something from us about d uh our today's topic here it is uh decentralized autonomous and lost uh we'll figure out what does it mean but first of all uh I'm Alex uh I am Dow Tech infr uh at Lial uh contributing for like a year and a half and Jen please yourself yeah I'm also lighted Dow contributor and uh I'm working the same well you stream and I wanted to say that you can believe us because we're are not just contributing to the DA we are contributing to the specific governance part in the lighted da and I have one more Point why you can believe me personally uh that's the point uh last year is Belgrade I was the winner of the governance M contest great so yeah let's continue and uh so yeah yeah we are both pa uh part of the um dowo infra work stream that uh specific works specifically works with the uh light da and today we're going to talk about like what is what is the Dow how does it work how can we build processes within the Dow and what does it mean like at all but we are going to walk through it uh through our own example that we are working on that is is wo so uh please raise your hand if you know what lier is I see a lot of hands that's great but not not not all of them so uh we need to briefly talk about what is light because it is an important part and Jen laa is a liquid staking protocol the idea is pretty simple if you have ethereum you can come to lier deposit it and get back liquid token which you can use everywhere in the defi ecosystem this is the main idea and Lia is one of the one of the top players in the market so actually TL a bit higher today which is nice um Li is decentralized Li is um secure and Li is governed by da but yeah that's cool but what is da uh please raise your hand if you know what the da is but not just what does does mean like what the the meaning of uh these three letters mean like like raise your hand if you know yes I know what D is great uh maybe someone wants to to tell us about what da is who raised their hand no please I so decentralized autonomous organization that says nothing essentially it's a bunch of supposedly random J that are making decision about is to evolve allocate resources and the way they do it right now is in the form that I find absolutely archaic it's essentially the loic of one toker equ equals one V so it's absolute and pure plutocracy for honest because the richest you are in prodoc on token the more you wait to the point that most do have votes past with just one significant voter able to meet the cor by himself and pretty much dictate what should happen thank you thank you thank you that's that's actually great explanation and we can talk about like the meaning plutocracy the philosophy of the stuff but I'll leave this for another talk like for the second one uh yeah no spoilers so yeah that's a great explanation but uh uh I want to like maybe reform it somehow uh and think with you guys uh together yeah this is the meme by the way uh what the Dow is like what the components are shaping the Dow so we can look at this uh from different perspective um during my first year in University a professor told me like the simple and Brilliant uh definition of function right so the function is uh three or troa you can say it like in Russian and Serbian uh basically it's the two sets two sets of values and some rule that connects each value from one set to other set and we can look uh to daos uh in this perspective so we can say okay the da is also troa uh here you see three big blue circles uh token token holders and some governance object so if we're saying we're the da uh probably we'll have all of this so we will have a token like a represent like that represents something and you can apply it somehow uh we have some people let's say token holders uh that are holding tokens and we say something we can control uh with doubt like some some object governance object we'll say uh protocol because it's like our case and mostly of all cases B like most of cases in uh defy so if we have three dots we have like an instinct to somehow connect them we can try that together like I did it for you but you also can think about it somehow yeah uh so we have token holders holding a token maybe we have like token somehow applying to G object and maybe there is some like connection with from like from protocol to token holders yeah maybe yes maybe not but I'm not sure about that maybe it will look like this but how does talk interacts with protocol does it happen all the time not probably not so like I wanted to make a beautiful triangle so you can see it and admire it but no no triangle for today and we have definitely connect these two dots like yeah because like it's in the it's in the meaning token holders and token uh token holders are possessing the tokens uh so we figured that figured it out for you that these three dots has to be connected like this so we have token holders that are connected with protocol in this way through the token via infra and what is this infra thing and why does lier has a lier contributors group has a like uh Dow infra workstream and that's the what we'll figure it out today so we'll see an example Jen please let's start from the easy one let's imagine some ra da with five members just five friends here decide to make a DA and produce ra they have three uh three out of five multis with the Forum and they have a group chat this is actually really really easy going down and um let's think about the oh wow you just decide to show they switching themselves let's wait for a few seconds for the name uh who are the the holders here those five friends what is the token uh in this example the token is just the address that added to the multi and where is the infra Alex where is the infra uh the infra is like a multi itself and a group chat where like all the discussion happened is there any problems with this ra down uh it's very simple and it if it works if it works like I I see no problems but if can we can apply it like can we try to apply it it for uh big def protocol I'm not sure um and this is the meme yeah this is one of favorite memes uh can you see the botton uh what is your security Model mck A lot of projects can have like mulick and maybe call them themselves a DA and uh it may be totally valid actually like it's okay and if maybe it looks like da sounds like da maybe it is d right but this simple concept of having like group chat uh in telegram or Viber uh and having just one mood seek to for example manage the like raia Distillery treasury to like to make decisions uh won't be enough so what's enough let's try to start with the basic lighted hour infrastructure uh Lia has the three steps uh for governance process to make it um to make it transparent to make it secure to make it visible for everyone to make it possible to keep the uh the the uh decision- making process decentralized we have the proposed phase you can just come to the quum to the Forum everyone can come everyone can um uh can have a proposal to the Dow we have the decide phase it's off chain but it's yet token voting um it's on Snapshot and we have the execute uh phase which is onchain execution onchain vote uh to add anything to the protocol to upgrade protocol to uh change any parameters or to uh transfer any money from the treasurer uh so for laer the minimum Quorum is 5% for any option and from the start it looks like it's enough uh why in general ligher needed uh this process this transparency uh decentralization and everything first of all staking share uh is 27.5% of the all if stake that mean that etherum that uh Li protocol holds need to be safe uh it's more than 100 smart contracts and it's really tough to control the changes if the uh if the governance isn't decentralized it's a lot of money interest usy and a lot of sta holders as a users uh so that's why the dowo and the whole infra that built around the lighted Dow protocol is needed so here's the light Dow is on this hem uh you saw previously uh so we have our holders we have our token and we have the protocol and something that connects all of this uh the process that we often see as governance rails uh is is the infra and it's exactly what just uh Jen showed and shown and said uh and what is Dow infra for us for for this particular example for uh such a uh for such a big protocol uh the first part that I want to like will uh cruise through all the parts uh first part is uh like monitoring we want to know everything what happens within the ecosystem and it it has like a lot of a lot of parts right it has like uh vote votes from three sources it has a Research Forum uh and uh like easy track that I I'll mention later dozen of committees and their transactions and we want to know all of this we want to deliver all the news to uh not only the contributors of the protocol but users as well and we have uh for example we have a telegram bot that you can add to any group chat in Telegram and it will start delivering uh all the digest and news uh like significant events happening uh within lier for you uh and we are using it as well as a source of some uh information yeah so we are gathering events and like Forum posts everything across the as well as onchain stuff and offchain stuff and with our army of bots that we are maintaining and developing uh we try to uh deliver all that info directly to contributors and users what else happening light out is pretty old Dow uh so after the general process were were set um idea of committee come up not only in on light da but in all Dows lighted out right now have around 20 committees the idea is pretty simple if you need to do some operational or even some decision- making stuff that is repeatedly happens uh and it's you can set the strict rules how to make those decision or you need some specific expertise really um experts in the some area uh you can delegate this part of decision making to some committee um the main issue here that uh if that's a lot of committees they also need infrastructure and it became uh harder and harder to understand what's happening in committees uh I hope lighta kind of stop here on 20 committees uh we have different one we have the grant committee which call Liga we have SIMPLE DVT module committee and this is the GU who guys who work with the specific simple DVT module uh we have a treasury management committee and each committee also need infrastructure yeah and uh the answer for this need for committees uh that was brought by wder contributors is easy track uh for those who not know the it's in-house solution for uh mundane onchain operations uh we operate easy tracks like this so it's basically an optimistic governance framework you can start some motion that we call them uh motion is basically some evm script that will be executed uh if uh no objections were raised uh the list of motions that are available for creation is uh strictly like created by the Dow so if you want to add some motion for example uh it will be legal Grant motion that will uh allow committee to fund some initiative uh you need to pass it through the governance rails have the onchain quum and then you are good to go uh so yeah you cannot vote like for or against you can only object but which is basically like vote against and uh if you are not voting against it will happen uh permissionless like uh anyone can not anyone can start the Motions like uh it's like in the contract code but anyone can uh enact them yeah and the objection pH is 72 hours I want to like talk a bit more about this solution uh for example let's let's see this example right right we have a legal uh Grant committee that wants to issue some grants to the community that would like to help grow our ecosystem or contribute some somehow uh to the Dow uh and if we want to do this like on a regular basis like each month each year uh there are like several options for example First Option uh if someone requests a grant like we have a proposer that goes to to the Research Forum tells the Dow what does uh they want then it if no objections were raised during the like Forum objection period uh the we need to start an onchain vote we need to gather token holders G and gain the quum for the vote to pass and it will fund the like it will move uh assets from treasury to to the proposer this is very long and tedious uh second option that you can have you can allocate budget for example once per year and have like the proposal for the budget allocation then you'll have the same onchain vote that will allocate for example a budget a grand budget for a year that can be like a lot of money uh and then per request you'll see the you you should go to like the same process basically but instead of having an onchain VA at the end you'll have a like mult transaction uh of like from the M uh committee multis to the proposer that is not that safe because you can again you can have a lot of money there and you don't want to lose uh those this money so our solution is option ET uh or easy track uh it looks kind of looks like the second option but it's different uh we are all the Dow is allocating budget uh per committee proposal uh it goes through the uh through the rails to the snapshot vote which is offchain vote uh and then like committee has its power to start EAS direct Motions like uh to start the interact with smart contracts and the those contracts will move funds from treasury to the proposer in the specific value that operator of easy track uh uh will input yeah so that's our solution and that is why we have easy track and we have using it and uh I I think it's great like the optimistic governance mindset framework is great uh to think F further next one yeah M part the most boring one uh we have infrastructural tooling and everything but also uh we have a problem that no one understand understand what's happening because happening a lot of stuff uh no one understand how to understand what's happening uh and um uh we need to explain it and we have a lot of sources of information uh so you you understand that you need to have a calendar you need to provide the ex short explainers long explainers you need to make uh you need to help Dow making strategic decision and strategic planning but same time you have uh huge huge amount of token holders some of them are engaged some of them just do nothing and here just yet a challenge for every da for us also build the system where you can come and understand where to go what to do what to check and uh how to start interact right now if you want to um I think in general it's enough like we have a pretty huge amount of channels like Discord telegram chats uh uh visualizing each proposal uh but the main problem yet to keep attention to what is important right now for this da uh I will not touch the Strategic strategic cycle of flight a DA because this is like uh topic for one separate presentation okay let's go ahead and back to security yeah yeah back to Security in the Dow so like for someone who is new to like this concept if you're new to this you you can understand that like you have token token holders and you need to vote on something right so we need our own voting system uh for our Dow to like operate and to improve uh and for anything else so in the cases where we don't like just saying the da agrees on that is isn't enough we have uh our own onchain voting system uh it was built uh by it was like improved improved by why the contributors and maintained but it was built on top of the Aragon governance framework shut out to the Aragon they're great and we love them uh and uh when we need to change something for example in previous example I said that for easy track we have a limited set of uh Mo like motion factories that we can create in order to add or remove uh one of the factory we need to start this vote because basically the vote uh contains some evm script that will be executed on on action so you can start the vote then you need to wait for the main phase an objection phase uh and then oh I think I messed it up not 72 hours 48 hours for the main phase sorry and uh so the whole the whole time is 72 hours 48 hours is the main phase 24 hours is the objection phase where you can vote only against the proposal uh to like be ready for some kind of like malicious proposal to uh to have an option to uh object it because the creation of those votings like voting scripts are permissionless anyone can go now and start a vote but please don't please don't because uh it is pretty late and we don't want to to mess with it uh but yeah this is uh our like main voting system and actually because because of the Quorum it's getting like harder and harder to get uh get it done uh to to gather all the voters because of the Gen set it's very hard to be involved deeply enough into the dowo and at the same time uh have like uh a good amount of uh tokens to uh to make like significant difference but it is also very hard to be involved like in the first place no matter what what amount of tokens you have so yeah this is one of the parts of the infra and uh here's just a pretty a picture of calendar we are uh from the contributor site we're planning each vote it happened um it happens like once per month or per two uh and we are preparing them very hard uh trying to get all the parts done in a good way and at the same time providing the community uh like guiding guidelines instructions to make it so like if if someone one will will have a will like to create a vote what should you do like what what are the steps let add small Point here just uh on the previous slide uh first of all wanted to highlight that uh aligned with the preparation of the voting it's nowadays a big problem that on chain voting need the dev to check it but not every token holder is a develop Vel ER and able to check what's happening and what changes is and we yet talking about the lighted out protocol which is pretty huge um and right now team also making the instructions how to check the vote and the instructions how to check the instructions and all this stuff just to uh trying to make it possible to control everything that happening and to be able to check at least a part at least like token Holder have um some time to check that now one here is malicious they are able to do so because of the th infra existence let's move to the delegation yeah delegation my favor for delegation uh we also have a delegation I would say that any big da nowadays have a delegation uh lighta was I can say the last Dow in the the space who add the delegation because we are using the Aragon framework which is uh pretty old uh we actually we actually really think internally as a team that um token holders need to have the whole ownership and the delegation were added because of the repeatedly repeatedly request from the token holders what is the idea under under the lia Dao uh delegation what is the specific uh obviously token holder can delegate tokens what is important you don't need to make any transfer you you don't need to lock your tokens in any Vault or any contract to delegate you just map your address and the delegate address um delegate can vote delegate also can use all the info we provide to to uh vote for then if someone find the um mistake or any malicious movement vote against or object and ldo holder yet uh always have the override power uh under the delegates if the token holders disagree he or she can come and override any decision um and actually it's general idea of Delegation uh a lot of infrastructure were were built to fight with the voting epy which is a huge thing for the nowadays Dao and we're unfortunately also faced it h and it's helped so I would say that delegation isn't so far helps so far help so far but but anyway um we also right now already have a a decision of the lighted out that we need to extend uh voting duration and objection phase because after the delegation were set um token holders might need more time to check what happened how the delegate voted and more time to overwrite wanted to mention mention it also thank you and yeah this is one more me this is the number of the vote that enabled the delegation for the ID uh yeah so we like talk briefly about the infra and what is this uh it's like a lot of info to digest I I guess and like maybe you still don't know what the Dow infra is it's perfectly fine the infra can be like anything if it works and seals your project your protocol the uh uh if its size and it's the size of community Etc but what like what really can we get uh from the stock or the final final I forgot about this one yeah yeah so yeah this is the future of uh light da governance it's very simple uh very simple to understand and to tell someone yeah you can just interact with this system and you'll be fine uh this is do governance this is our next big I'd say like huge release huge milestone that will I beg for it to happen this year this like it's been three years already from the start of research yeah to this day and this is like not just a theme for another talk it's a theme for another like I don't know another life another life yeah it's it's very huge and yeah so what what kind of insights can we get uh in the end uh basically like our shared Insight uh from going through the like the preparation of the talk is that the Dow is still an experiment right the industry is still small the amount of projects uh like is still small and da is is experiment we uh like why the contributors group built the in for the Dow the way that we and they know know like how to build and your example can be different or someone else's example can be different of course and it's okay because if you have like a like hundreds of thousands of uh video guides on YouTube how to build a to-do app perfectly like you have those but you don't have like single guide on how to build Dow perfectly and it's still like like a subject to figure out and we like ourselves haven't figured out yet so just try to share our experience try to show you uh what we did why we did it uh to make it easier for you if you will decide to have your own Dow to start with the better design and to learn on our experience yeah on our bumps and mistakes and wouldn't say mistakes it's yet experimental yeah it's big experiment yeah and this uh if you want to learn more you can just uh go to the the website and see more info about governance uh that's it from us uh thank you so much for your attention [Applause] um do we have any time for questions or not maybe one yes please you cannot miss that it's it's about promise uh just some context so I am a delegation skeptic essentially because there is what I call the delegation trap you know where you launch delegation people are happy delegates raise up to the occasion and then you end up okay I'll take a real example Aid like situation ACI initiative has a delegation of 1.5 Quon so that means ACI pass whatever they want and they have so much vote that even if a big we vote against them most likely they so that's what I that's dedication trap Illustrated for me where you know this you don't want this as an outcome I think we all agree on that whatever you think of a they might be Angels but still I don't want this iide my goal is to decentralize govern so I'm thinking in terms of you know conditional delegation for instance I'm delegating my token to you but I Blacklist any extra spending if your vote involved saying yes to an additional spending automatically my delegation is removed to you this the conditional delation what are your thoughts in terms of infra to avoid the delation TR uh so I can ask like I can answer briefly uh from the like technical side of like technical design of Delegation uh what we did we left an option for a toking holder to overpower any decision of the delegate so uh if I delegate uh for example if I delegate my tokens for uh to some other delegate uh they can vote on my behalf and anytime during the vote I can overpower the decision with other answer and if they voted in main phase for example for some malicious proposal they voted yes I can overpower in both Main and objection phases as well just say no this is like simple simple answer but yeah Jen do you want to add something because J answer she knows a lot of stories about delegations and some I also delegation skeptic that's why um that's why uh I was actually fight as far as da can fight to not to have delegation I'm personally skeptical about the professional delegates I just think that professional delegates is not the not a good thing for the industry uh but in general there are no solution and the delegation in just what we try to do we try to uh we try to uh Outreach to some people in the space who are might be interested to participate in light theow governance because they have specific expertise and try to have not just professional delegates on the uh our list of potential delegates but people who are really carry about ethereum people who are really car about the lighted out uh how it works just token holders can at least choose based on their values uh but it's yet not resolve the problem of centralization of voting power for lighta it's not a big Pro problem because the voting power isn't really like centralized the problem more that we have twoo um too small amount of active voters um but they they are pretty different and they don't want to delegate all decision Mak to some entity as a as a in a for example um I think that there are no solution yet like that was just trying to uh trying to do trying to keep it at least somehow decentralized da is trying to balance thing between uh voting empathy and needs to make a decisions for protocol evolving so the delegation was just a try and based on our experience for us it works it just help activate some V in power helped to attract some experts who can provide their uh their opinion who can provide their advises to the contributors to the uh token holders but some Dow struggling with the uh voting power which is holded but by delegates who are not active anymore for example and they can do nothing with this uh so my personal opinion delegation will evolve somehow and like the trend is on the optimistic governance rails right now not on the delegation just last two year was delegation Hub hype two years now it's optimistic governance hype two years ahead that's my personal opinion here thank that's it thank you again see you I [Applause]