Protocol Governance
Last updated
Last updated
Governance is instrumental to the HocDao protocol. From day 1 all decisions will be enacted and ratified by HOC token holders, to ensure a community governed protocol which aims for decentralisation in its end state. The HocDao Protocol will host an online forum, which HOC Holders can discuss and debate the merits of certain courses of action pertaining by the HocDao ecosystem. Proposals will be ratified by tokenholders on snapshot.
Prudent HOC holders could vote to do the following:
Add a new collateral asset with a unique set of Risk Parameters.
Change the Risk Parameters of one or more existing collateral asset types, or add new Risk Parameters to one or more existing collateral asset types.
Modify the HGBP Savings Rate.
Upgrade the protocol.
Govern the use of the treasury HOC
Govern the annual DAO expenditures which are paid via the HocDao surplus buffer.
All governance activity is informally initiated via discussion on telegram, discord or our forum
To formalise an idea, a Request for Comment (RFC) must be submitted on the governance forum
Contact a a Hoc facilitator to create a HIP (HocDao Improvement Proposal) on the governance forum
HIP created on snapshot and released for polling
If the proposal is successful, it will be implemented by the HocDao team
To incentivise a healthy governance process, the treasury will airdrop HOC (amount to be determined in future polls) to successful proposer wallets, being the user wallets associated with proposals that pass voting stage. These proposal rewards will be airdropped to the relevant user wallet automatically by operation of a treasury smart contract.
The treasury may also airdrop HOC to existing HOC holders that actively participate in the governance of the Hoc Protocol ecosystem by voting on such proposals. These rewards would be airdropped to the relevant voter wallet automatically by operation of a treasury smart contract. See Figure 5, Item iii. The exact details of the Proposal and voting rewards, including the formula by which they are calculated, will be shared in due course. The purpose of these rewards is to incentivise borrower drawdown activity and participation in the governance of the HOC Protocol ecosystem.
HocDao has taken great inspiration from the writings of Viltalik Buterin. His points in his latest essay on effective DAO governance, reverberate strongly with us Thus we are constructing the 'Concave Mandate' – a constitutional-type document to hopefully support the most effective governance of the HocDao moving forward, by setting out guiding principles to Governance token holders – which we hope will form a framework for governance (although there is no obligation, nor can there ever be. The meaning of 'concave' as regards decision making, can be best highlighted in the following graphs, taken from Vitalik's latest essay, as well some paraphrasing in the description below them:
'Concave' refers to the shape of the curve on the left, whereby when there are two (or more) options to vote for, a wider crowd wisdom is likely to present a better result. An example would be a DAO vote where the two voting options are giving X% of treasury to charitable causes. Any kind of 'middle ground', i.e. a split of X between the two causes, is likely to yield a more positive outcome than if all of X was given to just one of the causes. We aim to encourage proposals and options that support the 'net-positive compromise'. An opposing 'convex' shape can be seen on the right. In considering a COVID travel ban, the 2 choices might be ‘no ban at all’ or ‘100% ban’. Having a compromise between these 2 options makes little sense, with any kind of compromise adding considerably more complexity, and likely further 'refining decisions' (and thus proposals and votes) needing to be made. It is our hope to discourage these sorts of proposals and options being put to vote at HocDao. In addition to his points on best use of the DAO voting model, Vitalik has also co-inclidentally and recently written very favourably of prospects for RWA-backed stablecoins (with DAO governance) as having a good balance of utility, robustness and independence from centralised control (such as for a central bank digital currency (CBDCs)).
We can consider what we view as the prime use case of this system: the decision as to whether to admit new property collateral to the HocDao Protocol:
First, there will be a RFC. This initial RFC serves to protect the HOC Protocol’s governance from malicious, duplicative and unproductive Proposals by inviting the community to voice their opinions and concerns. We hope members will bear in mind the Concave Mandate (see above) when making such RFCs. Once a Proposal has passed the RFC stage, it will be put to a vote to green light the proposal.
If a proposal is green-lit by the community, the HocDao foundation will appoint an internal risk manager who will conduct due diligence on the collateral asset and communicate their findings to the community. The collateral will be then put to another final vote before being onboarded to the protocol.
Further through a system of token delegation, which will be rolled out at a later stage, token holders can support active voices in the community by lending them their voting weight.
