tldr;
- Trust the Swiss Legal System, minimise NF micro-management
Thanks for the work youâve put into this proposal Chronear, I know you and the team have the best intentions and that everything is a work in progress.
I do have a few questions, concerns, and reservations.
I am concerned that mere weeks after we created a payout procedure that is utterly unworkable, and a major turnoff for most community members, we have now managed to come up with a procedure that is also very cumbersome and a potential major turnoff for current and future council members.
As payout process is being amended now (as anyone familiar with it would expect to, most of us have actually waited before proceeding to make payout requests), so it is with much cynicism that I ask *how seriously should we take the current proposal given it is likely to (fail) and be changed sooner than it takes to actually digest all the changes. Worse, this is creating a self-fulfilling prophecy - new policies and procedures are more likely to fail because community members simply stop taking the NF seriously.
The decline in trust and legitimacy of the NF can be attributed to many things, senseless and ever-changing policies being just the public manifestation of greater issues, the core of which (to me) is:
Lack of transparency and consultation. I am a geriatric, active community member AND sitting Council Member, the fact that this monolithic treaties are being drafted behind closed doors and handed down without any type of consultation or input is disturbing.
First, letâs start by acknowledging the good - Swiss Foundation is the way to go. Holding Council Members to a higher standard of performance and accountability should always be a priority and some of these measures represent good progress.
Now some of my questions, concerns and suggestions (in no particular order of importance):
- The post fails to mention the most important thing: how do Swiss Foundations work, what are the legal implications for Council Members, and how do the current structure affect funding levels.
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My understanding is that Foundations have very clear guidelines on what the money that they hold can be used for. These are very strict mandates: if funds are disbursed in any way that is not compliant with them then Council Members are personally liable (return funds out of your own pocket or face potential prison time for fraud). This is obviously a strong safeguard and a major point of consideration both in accepting the role and fair remuneration.
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** SWISS FOUNDATIONS ARE MEANT TO BE INDEPENDENT** I am almost certain that the epic legal battle between the Tezos Foundation in Switzerland and the founding team in US came down to them appointing puppeteer Councillors, meant to act on behalf of an external party. Councillors refused to take certain direction from Americans and litigation ensued. Swiss foundation independence won. I am sure that this is something that the Legal Team has thought of, and Iâd like to see their legal reasoning behind having 5 NF members essentially control the separate entity.
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Funding. Given the very strong safeguards natural of a Swiss Foundation, can we expect these DAOs to be given proper funding or are we just setting up very expensive entities and exposing Counsillors to significant paperwork and liability while being limited to asking a childâs allowance worth of funding each quarter?
Proposal 1: minimise, and ultimately eliminate, NF members from DAO Foundations. Explain and embrace the safeguards provided by the new Legal Structure.
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Quorum: seven out of nine votes is extreme. The only reasonable way in which this would be justified is if there is a legitimate risk that 51% of Councillors could be corrupted in some way - this both negates all the previous measures such as stringent selection criteria, KYC, and the Swiss Foundation liability (it is illegal in Switzerland to steal money)
There are also some very real practical issues with a 7 out of 9 vote:
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It will quash dissent. We want to encourage open conversations were many different points of views are expressed. It should be acceptable to oppose proposals, and it is extremely important to leave some leeway for Council members being sick (or otherwise temporarily unavailable), enable them to abstain due to a potential conflict of interest, etc.
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These level of extremely onerous consent is only ever seen on for critical decisions that are designed to fail by default - only things that are truly outstanding should pass rarely. We are talking about Constitutional amendments level of votes required.
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Iâll say it again for sake of clarity - no proposals will pass, either by natural and healthy opposition or by omission.
Proposal 2: maintain the standard 51% voting requirement.
- Makeup of the Council
Would like to know where the magic number 9 comes from? This number seems high, to start with, and opens up a few questions and issues:
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Is this a legal requirement set out in the constitutional documents of the Swiss Foundation or another arbitrary requirement by the Foundation? This is yet another instance of major divergence between Swiss Law, NF bureaucracy, and the reality of operating a functional DAO.
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What happens if a DAO falls below this threshold? Do DAOs cease to function the moment a Council member steps down, and until a new one is recruited? It would no doubt be easy to recruit someone to fill NF seats (anyone to fill the seat, vote in accordance to the rest of them without any idea of what is going onâŚ). This is a compounding issue as there can be difficulties in recruiting from the community given the eligibility requirements, DAOs could be paralysed indefinitely.
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Budget. The ability to recruit and retain Council members is obviously tied to pay. Considering there have been concerted efforts to publicly attack anyone earning a decent amount, is the NF going to impose any limits on Council membersâ remuneration? Honestly, current remuneration is not nearly enough - this could easily amount to a signifiant amount of hours worked, specially considering that 5 of the 9 Council members already have full time jobs within the foundation (emphasis on this req. being a nominal Seat to hold real Councillors back, serious questions on time availability and commitment)
Considering the above, I am wondering about the profile of the NEAR Foundation employees that will be joining the DAOs:
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I donât think I need to reiterate that most Foundation employees already have a full time workload, and the experience up until now is that unless the NF employee is actually required as part of his/her duties to be active on the DAO, involvement is minimal and scattered⌠Weâve struggled in the past to pass proposals with a simple 51% quorum, canât imagine how the situation could be any different under the current proposal.
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The only way I see this would make sense is if the Foundation hires new teams to dedicate primarily to being DAO members. While I would strongly encourage them to do so, and I would even consider putting my hand up - the benefits of privacy when it comes to your remuneration combined with the stability in terms of how long and on what terms you will be performing work, as well as achieving the clear desired outcome of the NF controlling funds and decisions, are unparalleled. Naturally, spending more money than the DAO is going to be allocating to set up a separate entity staffed by a new team of NEAR employees has to be one of the best schemes that Iâve seen by lawyers to extract the maximum mount of money while providing the least amount of value.
I said it before and Iâll say it again - we should consider scrapping the âDAOs - Decentralise Autonomous Organisationâ altogether and simply running a Grants program directly through the foundation: simple, efficient, honest.
Proposal: create a proper internal team to handle all community grants (put existing community members on Payroll) OR trust the Swiss Legal System and desist from micro-managing the artificially separate entities.
Final thought is on the Council Rotation scheme. Once again from my personal experience:
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It can take weeks to properly onboard a new Council member, rotating them every three months means we will be missing out on Councillors that should be hitting peak performance as theyâve had the chance to acquaint themselves with the processes, teams, etc.
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It is unreasonable to have 1 week processing time of applications when Council members will be constantly in and out. We should not underestimate the value of accumulated knowledge and experience.
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I am unsure what the desired goal of having very short term is. However, I can make a strong argument for the value of consistency and continuity. Most of the applications that we asses are decided based on the accumulated body of work of the applicant and in the on-going working relationship established between applicants and Council (we meet, coach, assist, and assess performance reports and subsequent applications). Longer terms means that the process is smoother, and more robust. The opposite is also true, having a Foundation endowed with large amounts of money and a revolving door or Councillors creates the perfect scenario where no one actually knows what was approved or why six months ago, where applicants have to engage with new people (that actually know less about the workings of the DAO than they doâŚ), etc.
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The scope of work of Council members has been increasing steadily, and the Swiss Foundation structure represents a major increase in admin work and liability. This is not quite something that (9) people can be expected to do - given the performance requirements set above - at the drop of a hat, while maintaining existing professional and personal commitments. This means that the pool of Councillors is limited - while we strive for diversity we are making it so that only (young and single? older and retired?) people who are willing to work nights and weekends will step forward. The time commitment and remuneration need to be sufficient for a wider range of Council Members to consider making considerable changes to their life arrangements to join.
** Proposal: extending the tenure of Council roles to six months, with the option to renew. Maximum two terms.**
Anything that I havenât addressed above directly I agree with.
As you may be able to infer from detailed post above: I am relentlessly committed to seeing the NEAR ecosystem succeed, I have always put my own money where my conviction is, and I am currently the most active that I have ever been, working in various capacities across several teams and communities in attempts to create the most amount of value, the fastest (this includes sitting on Marketing DAO).
I really do hope I do not come across as antagonistic, I am just increasingly frustrated that everything the community is achieving through BUILDING the NF continues to undermine through bureaucracy.
Looking forward to having more open communications with NF teams working on this proposals, to receiving more information on the next steps for setting up the Swiss entity (and reviewing current legal advice), and contributing towards the next evolution of DAOs.
Finally, to clear up any perceived conflicts of interests, I am ready and willing to step down as Marketing DAO Council Member if required. While my current experience informs my views above, I stand by those views whether I continue to sit on the Council or not.
