Written by Eric
Synthetix, a project that has been operating for several years, abolished its foundation at the end of July 20, and reorganized into a community autonomy model: the community is governed by 4 DAOs (Decentralized Autonomous Organizations), which cooperate with each other and check each other to form a self-consistent management system. Synthetix is one of the few projects in the existing DeFi ecosystem that has achieved true community autonomy, taking into account the interests of developers, commoners, users of the whales, and project owners.
To better understand the relationship between the 4 DAOs, let’s talk about Synthetix’s improvement proposal.
Synthetix Improvement Proposal
Synthetix improvement proposals are of two types: SIPs and SCCPs, where SIPs are similar to EIPs (Ethernet Improvement Proposals) in that they are design documents that document and provide information to the Synthetix community about changes to the system. The authors are responsible for building consensus within the community and documenting dissenting opinions. Community members can all fill out the proposal in an officially drawn up format and go through a community governance process to determine whether or not to implement it. sCCP is essentially the same in form as SIP, but SCCP is more focused on changes to the system’s configuration parameters. Its purpose is to provide a clear and detailed history behind each configuration change and the rationale for why that change should be implemented.
The SCCP focuses on setting important parameters in the Synthetix protocol, such as transaction rates, collateral rates, etc., which are voted on by the “Spartan Council” and submitted to The protocolDAO will be the final authority. Under the recently adopted SIP-111, the Spartan Council may also vote on SIPs.
Anyone can submit a SIP, SCCP, and the corresponding DAO will vote on it in the governance interface, and proposals that receive support may be included in updates to the project, subject to review.
Proposal to cast Coinbase’s synthetic asset sCOIN for equities
The entire review process involves two DAOs in the governance system: The Spartan Council and protocolDAO.
The Spartan Council (The Spartan Council)
In order to reduce the chilling effect of governance by voters and some token holders, and to reduce the voting weight of large token holders, Synthetix has designed a representative system: the thrice-weighted “Spartan Council”, which is currently responsible for reviewing and voting on the SCCP and SIP, and is the highest council of Synthetix.
Since SCCP is a change to the core parameters of the protocol, it was originally done by protocolDAO (to be introduced later), but protocolDAO is mainly composed of core developers and large cryptocurrency holders, in order to prevent large cryptocurrency holders from destroying the balance of the protocol for their personal interests, and to allow retail cryptocurrency holders to participate in the process of protocol improvement. Synthetix has set up a “Spartan Council” to make the final decision.
The “Spartan Council” is composed of 8 people who are elected and have a new election every 3 months. The 8 members of the Spartan Council will vote on the SCCPs/SIPs, one person, one vote, with each proposal requiring at least 3 votes to pass. After passing, it will be implemented by protocolDAO. In this way, proposals that only satisfy the private interests of the big players but are detrimental to the protocol itself may be rejected in the “Spartan Council” vote.
Of course, the checks and balances work both ways, as the protocolDAO also has the power to suspend, revoke, or roll back the SCCP/SIP passed by the Spartan Council through a vote.
As the name implies, the protocolDAO is the DAO that manages the protocols, and consists mainly of the developers of the protocols, all contracts of Synthetix are owned by the protocolDAO.
The protocolDAO is responsible for the final review and implementation of SIPs and SCCPs, and the protocolDAO makes the final decision on whether or not to implement SIPs and SCCPs that are voted on. In addition to improving the protocol, the protocolDAO is also responsible for the security of the overall protocol operation. If an attack on the protocol is detected, the protocolDAO has the authority to suspend the protocol and fix it directly.
Of course, this “high-level” authority is subject to certain limitations: protocols can be suspended for a limited period of time, and if the protocolDAO does not restart the protocol for a long time after suspension, the system will restart it according to a time agreed upon by the community.
In the worst case, if protocolDAO members collectively commit mischief and cause the protocol to be suspended indefinitely, the SNX token holders have the right to vote to restart the protocol.
The governance of protocolDAO will later include an option for token holders to vote to impeach protocolDAO members, but with certain restrictions on such power to ensure a balance of power between the protocol’s administrators and token holders.
The governance of the Synthetix protocol itself is primarily the responsibility of the two aforementioned DAOs, who collaborate with and constrain each other. Among existing blockchain projects, Spartan Council’s representative system of governance is a balance of efficiency and fairness. Although the project owner has one voice, it is very efficient but largely suppresses the enthusiasm of the community, while the referendum method is fair but prone to the situation that Bitcoin and Ether need to play for years to reach a conclusion on a proposal.
The mutual restraint between the Spartan Council and protocolDAO makes it much more expensive for either party to do evil, and it is in the best interest of both parties to work together to promote a healthy and positive development of the protocol.
GrantsDAO is set up to fund community donation proposals and is composed of three community members and two core contributors. The funds will be used for infrastructure development and marketing direction, and will primarily support teams or individuals who contribute to the project, provided that they hold a SNX, thus providing a positive incentive for the project to grow.
Proposals can be discussed with DAO members in Discord prior to submission to grantsDAO, and each successful proposal will require a vote of 5 members to decide whether to provide funding, up to a maximum of 50,000 SNX per proposal.
The details of the proposal and the voting results can be found here.
GrantsDAO will receive an annual contribution of 1 million SNX from synthetixDAO for the next three years to incentivize community developers to provide contributions including DApp upgrades and protocol updates. To ensure the decentralization of the network, grantsDAO’s primary focus will be on distributed networks such as IPFS, which can be hosted in perpetuity.
synthetixDAO started as a simple multi-signature contract, created primarily to secure funds during early fundraising and to regulate the use of those funds. SynthetixDAO then continued to fund the foundation and some of the teams or projects within the ecosystem until Synthetix wrote off the foundation and moved to more open community governance.
Whereas previously major funding requests within the ecosystem were made to the Synthetix Foundation, today any entity within the ecosystem can apply for funding directly to synthetixDAO. These requests are first reviewed by grantsDAO, and if the request is outside the scope of grantsDAO’s authority, it is transferred to synthetixDAO for review. As the foundation is wound down and written off, synthetixDAO must continue to evolve to ensure that all stakeholders in the network are represented and that all entities that contribute value to the ecosystem are funded.
Currently synthetixDAO consists of three members, representing the main stakeholders in the network, core contributors, and large token holders. In the future, synthetixDAO will be open to all token holders, and anyone can become a member of synthetixDAO with the support of enough token holders. Eventually, all funding proposals in the ecosystem will be open for review and voting by synthetixDAO members, with the veto power going to token holders.
The decentralization of the use of funds is a bold attempt; most projects are still very cautious in the use of funds even if they have achieved community autonomy at the governance level. But in fact, just like traditional companies, frontline community members and developers often know better what the project needs and where to spend the funds to maximize efficiency. This means that the community is no longer just a “proposer”, but is involved in the entire process from proposing to deliberating to funding to execution, completely decentralizing governance.
The above governance changes mark a phase shift in Synthetix governance, and while we have been governing by rough consensus for some time, this shift puts more power directly into the hands of token holders. More critically, such governance will provide token holders with a collusion-free and censorship-resistant protection mechanism and reduce the degree of credit granted to core contributors within the ecosystem, changes that will make the entire protocol more secure. synthetix’s goal has always been to provide a censorship-resistant protocol for trading synthetic assets. These changes are an important step in achieving that goal. As always, the Synthetix community will continue to iterate and test these changes to ensure they are consistent with our long-term goals.
Community Governance Sessions
In addition to the governance DAO described above, the Synthetix team will also hold community governance meetings with community participants. The community governance meetings are the communication channel between the Synthetix team and the community. The community governance meetings will be held on a semi-regular basis and will have predetermined issues to be discussed and addressed. The project team will use them as a supplement to the Discord to get the community’s views and suggestions on the project through direct communication. Community governance meetings will be held and posted on the blog
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/read-about-synthetixs-community-governance-model/
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