Funding Request: Request for funds to run a 10-person delegated voting pilot program

Name of Project: Risk Labs

Proposer: Clayton Roche, clayton@umaproject.org

Proposal Summary Requesting funds to create a small pilot program that would give voting grants to 10 people.

Project Description
Two months ago I posted a request-for-feedback for a proposal that would offer 100 people incentives to vote on UMA protocol disputes. The feedback was generally positive, and here today is a proposal to get started on the program but with a few changes from the original post:

  1. Allocate UMA tokens for 10 delegates to vote with and earn rewards. They can’t sell the UMA, but get the total rewards paid out to them at the end of 12 months. This was scaled down from 100 so that we can learn how hard it is to implement, and gather learnings in general before going bigger.

  2. They vote with a hot wallet that has delegated voting permissions for an address (“cold wallet”) holding the StartingAmount of tokens.

  3. Delegates will be from the pool of participants in an ETHGlobal 2022 hackathon.

  4. The delegates will stake their $UMA and begin earning staking reward emissions. Here is an example of the impact on the reward economy:

    • Staking rewards for UMA 2.0 are based on fixed emissions, and so the more tokens staked, the lower the rate-per-token. The per-second emissions rate is .18 $UMA; yearly that’s 5,677,200 UMA.

    • Based on the last 10 votes, we had about 20MM tokens participating. The difference to your personal earnings is reflected in the highlighted column. (If we went with my 5k suggestion, that means you go from 28.4% → 27.7% annual APY)

If we give as a StartingAmt: Est. Balance in 1 year Delegate gets in 12 months At $2 UMA, worth Est. Base APY Tokens given away in 1y
We don’t do it - - - 28.4% -
2,500 3,250 750 $1,500 28.0% 75,000
5,000 6,500 1,500 $3,000 27.7% 150,000
7,500 9,750 2,250 $4,500 27.4% 225,000
10,000 13,000 3,000 $6,000 27.0% 300,000

*This model does not account for the token reallocation effect that rewards/punishes good/bad voters. If all the delegates vote perfectly, they’d take a portion of those rewards, too. If only half were good voters, it would cancel out (I think.) There is a world where someone stakes the tokens, fails to vote, and they get dinged all through the year. In this world, the DAO loses some of its tokens and they were distributed amongst active voting tokenholders.

Value Add

  • Strengthen the oracle and start to address the corrosive “influential whale” narrative
  • More devs in our ecosystem is a pure win. And if they are voting consistently it will result in understanding the oracle and its capabilities
  • Devs are a likely group to think in nuanced ways about votes, contribute valuable rationale, and help us think of ways to make things even better.
  • Of course, we hope they end up building stuff using UMA, or just as valuably, explain it to other devs for whom UMA is the solution they didn’t know was out there.
  • Further solidify UMA’s relationship with ETH Global

Deliverables
For this pilot program, Risk Labs will share updates about how it is going, either on Discord, Medium, or Twitter.

When the program ends after 12 months, Risk Labs will deliver an analysis of how this program went. This would mean data on how frequently the delegates voted, how many $UMA they earned, and when the data becomes available, how many stuck around vs. sold.

Total Budget Requested
The budget is 10 delegates X 5,000 $UMA each = 50,000 $UMA.

Most or all will be given back to the DAO at the end of the program. The only reason it would be fewer is if one or more delegates staked without voting and lost some of their stake.

These 50,000 $UMA would be requested to be sent to a Risk Labs multisig address. Risk Labs would then be responsible for setting up and deploying this program. RL would be the custodian of all 10 cold wallets.

At the end of the program, RL would reclaim the StartingAmount from each cold wallet and send the remainder to the associated hot wallet. Then, all the base amounts would be returned to the DAO. As mentioned above, there is a possible scenario where some wallets have a lower balance, in which case the DAO would eat the loss (the loss that was distributed evenly among ya’ll good voters.)

Requested: 50,000 UMA
Destination multisig: 0x8180d59b7175d4064bdfa8138a58e9babffda44a

Team
Risk Labs is the foundation that supports UMA. You can learn more on the Risk Labs website.

Additional Information
As UMA typically sees around 60-70 voters, so this would represent an increase of 15%. The intention is that if this program goes well, we would put up another proposal to expand it.

Do you support this proposal to be sent to Snapshot for a vote?

  • Yes
  • No

0 voters

3 Likes

Clayton, re: 1*. Delegates will be from the pool of participants in an ETHGlobal 2022 hackathon.*

Any thoughts on how specifically these 10 individuals would be selected from this pool of participants?

2 Likes

Can someone who didn’t participated at the Hackathon still be considered for the program?

A snapshot vote on this funding request will go live in approximately 1h and will remain open for 5 days.

https://snapshot.org/#/uma.eth/proposal/0x5ad3f7ce04dd4696fe8103c90e40cf7966358cba7c73e0facf9abd2247edec3f

norurhandle from Butter here. Love this initiative.

We’d certainly be interested in participating if you’re considering people from outside the hackathon pool.