#14 Governance Series
The decentralized governance landscape has become increasingly complex, and it requires more and more from its participants. We have to once again acknowledge that Delegates today are one of the main driving forces behind decision-making in billion dollar protocols. It is self-evident that there are very high requirements that come with the role of a delegate.
In this article, I will explain why delegate roles will be managed by organizations, how StableLab pioneers the work as a professional delegate and which measures we take to ensure the best decisions across the leading DeFi protocols.
Why we needed to advance DAO Governance
Looking back at the last couple of years of DeFi, we witnessed rollercoaster-like ups and downs, bringing many new possibilities, learnings, and challenges for governance with them. In 2020, the DeFi summer took the crypto world by surprise and decentralized finance took off. We saw major DeFi protocols like the Maker Foundation dissolving and Aave launching their DAO. Compound has unleashed a sudden craze for yield farming, presenting users with unprecedented possibilities and taking DeFi to new heights. Vampire attacks have led several major organizations like Uniswap to launch their token. At the same time, some of the most hyped DAOs such as OlympusDAO, Terra, Wonderland, and TribeDAO faced severe difficulties and ultimately collapsed.
These events provided significant opportunities to upgrade the state of DAO governance and participation. We are now at a tipping point where certain governance models are emerging which prove the need for committed and professional delegates. Today, these delegates often hold a lot of (voting) power, and with power comes responsibility. Later on, I will outline how we think delegates can best fulfil this responsibility.
Why Delegate Roles will be managed by organizations
Currently, we can witness how an increasing number of professional organizations are taking to the stage. This trend is very promising and reflects the progress the industry is making. And let’s be honest, it was clear for a long time that the delegate concept wouldn’t work in the long-term without professionalism. Nevertheless, most DAO participants today are still Individuals dedicating their free time to partake in protocol governance. We regularly write about the numerous problems there are around the immature concept of decentralized governance, such as a general voter participation rate of only 5–10% (!), delegate compensation, fair voting, and many more.
We believe that most delegate roles within DeFi will increasingly be managed by organizations rather than individuals in the future. It is likely that these are highly specialized in governance due to the time commitment involved. The reason for this development is that only professional delegates offer everything a DAO needs: a variety of skills, unbiased resources and dedication that help shape DAO’s in all of their purposes and needs.
That is why at StableLab, we are keen to bring professionalism to the delegate field. It is reassuring to see that more and more governance organizations stand behind these values. We want to be part of the community that helps drive Decentralized Governance forward. A good competition here can ensure that sustainable and long-term performance is required from all participants.
How we bring professionalism to the delegate space
Our goal is to participate in a professional, unbiased, transparent and reliable manner while promoting the journey to full decentralization. Our expertise is a combination of the outcome of our research and years of experience working with and for DAO’s. The following is a living guide that continues to evolve and improve as the industry transforms and grows.
What our delegates bring to the table:
Professional, transparent, reliable, and unbiased participation.
Use of data, research, and years of experience.
A collaboration of a dedicated governance team working together with the protocol.
An approach that is driven by a strong set of ethics and values.
Implementation of best practices and lean DAO frameworks.
Adherence to a set of Internal Policies and Code of Conduct that ensures all of the above.
To ensure that StableLab is represented in a uniform and value-driven manner, we introduced a set of governance delegate policies that our team follows when performing delegate roles on our behalf.
How we help DAOs to deliver sustainable governance mechanisms:
Focus on lean governance frameworks by reducing operational overhead.
Focus on implementation of delegation frameworks and decentralized workforce.
Act as an unbiased professional entity that brings extensive experience to the table.
Facilitate the protocol’s governance covering where needed.
Be a strong protocol ally, who they can always rely on and turn to.
Earn the recognition of the community.
Code of Conduct
We provide the tools that help the communities to govern the projects that they are involved in themselves. We’re an impartial and unbiased voter who work based on the information presented in proposals.
Backing up our arguments with evidence, research and examples of similar cases.
Validation of proposals pre submission to make sure it’s aligned with our values.
Participation in all governance meetings within the community.
Participation or Lead in working groups where applicable.
Conducting ourselves in a productive, informative and understanding manner.
StableLab is a research-driven firm dedicated to advancing the understanding and development of the DAO governance landscape. Our team is committed to providing investors and institutions with key insights through a suite of services including DAO analysis, governance research, tailored consulting, and delegation.
We have a dedicated governance team working on the company’s delegations while we also run governance research projects and product developments.
Get in touch,
If you would like to support us in our governance efforts,
If you and your team need guidance on governance related matters, or
If you are a founder who is building something interesting in web3