Introduction
I am writing my first post here about the proposed modification of the quorum for the DAO because I think it is a bit rushed as proposal and does not take into due consideration the potential risks that such a revision could bring to our DAO.
The process of modification of any governance process must assess not only the aim of the modification proposed, but must include an assessment of potential risks connected and include measure to mitigate those potential problems. In my reading, the recent proposal to increase to 120M votes the quorum does not comply with this prudential and comprehensive approach.
Risks connected to quorum modifications
Setting a quorum to consider decision valid and approc=ved is pretty common, but it doesn’t come free of risks. It is clear to everyone that when a quorum is too low it becomes useless and unfit for the purpose, but on the other side to set it “too high” can be even riskier.
The closer the quorum is to the total of the rights to vote, the less efficient becomes the governance as it tends to shift from a “majority” system to an “unanimity” system. As a consequence, we have to be always very careful to keep a balance between the need to represent “all” the interests of the governance body and the need to remain efficient and operational.
The type of quorum also has impact in the way a governance works. To set the quorum in absolute terms it is very uncommon if not within environments where the total rights to vote is rigid and unlikely to suffer from volatility in numbers (regardless of whom holds those rights). More commonly it is used a quorum set in percentage of the actual total valid rights to vote at the moment of the decision.
Why that?
First because not all the holders of the rights are present or willing to decide about specific topics, but secondly because the total number of rights to vote can be very volatile. This second case is particularly relevant for the JUP DAO as that number depends on staked JUP and not circulating/held JUP. Currently it might look unlikely to see a massive unstaking event, but it can’t be excluded that it could happen. If that happens and the total JUP staked falls under the proposed limit of 120 Million, the DAO will end up completely paralyzed because it would impossible to any proposal to achieve the quorum. To make it working again would require a “centralized” action and this would completely deprive the DAO of its main functions.
On the other hand, huge increase of the staked JUP could make that quorum too low and expose the DAO to some risks of manipulation of the votes ot lead to the implementation of decision that are not supported by a qualified majority.
A different approach
I would like to add that any proposal to modify the DAO processes should the most comprehensive possible in order to avoid miscalculations and/or the need to patch it frequently. Very often, those modification are coming together with other aspect of the governance that are similarly important. For instance, modification of the DAO processes should require “super majorities” because they are touching the very core functions of the whole organization. It should be stated how to make them public, how long in advance, through which channels and so on (just to mention some elements)
Conclusion
To conclude my post, I am asking:
- @Slorg to withdraw the current proposal and to rethink it in a more comprehensive way because it doesn’t include countermeasures to be taken in case of bad scenarios;
- in sub, to modify the proposal replacing the absolute limit with a relative one;
- in sub, the DAO members consider all the potential consequences before casting their vote
Final note
I am a business developer in real life. I don’t have experience in other crypto projects, but I have been member of governance bodies both domestic and international