The “House of Stake” proposal outlines a comprehensive governance framework for the NEAR Ecosystem. It focuses on designing a structure emphasizing transparency, accountability, efficiency, and most importantly, protocol alignment. The primary goal is to equip NEAR holders with a governance structure that permits equitable and sustainable growth. Below is an executive summary providing the high level segments of the proposal. We strongly encourage all NEAR community members to read the full House of Stake proposal here. To provide any thoughts, feedback, or questions, please respond to this forum post or feel free to dm Gauntlet directly on X. At least 14 days of feedback time will be allotted for sufficient community discussion and feedback.
Critical Components of the Proposal
Governance Mechanism (veNEAR)
A vote-escrowed (veNEAR ) token is proposed as an integral factor of the NEAR voting system, allowing users to lock NEAR tokens for a period ranging from three months to four years. The system is designed to increase voting power with the duration of the stake, promoting long-term commitment and enhancing governance influence.
Governance Architecture
On-chain voting mechanisms are proposed to facilitate broad participation and robust decision-making with checks and balances in place to reduce voter fatigue and fast-track pre-screen proposals.
Advisory and Functional Bodies
A Screening Committee is proposed, which will initiate the delegate selection processes, pre-screen grant proposals, and ensure continuous evaluation of governance efficacy. The Screening Committee plays a critical role in maintaining dynamic and responsive governance.
Delegate Framework
Definitions and roles of Endorsed Delegates are clearly outlined, including their selection process and responsibilities. These delegates are crucial for operational governance and are selected based on their engagement and compliance standards.
Utilization of 0.5% Annual Inflation
A key motivation behind this proposal is to effectively direct and utilize the 0.5% annual inflation rate to fund governance initiatives and incentivize meaningful ecosystem participation.
Path to Decentralization
Steps towards decentralization include expanding delegate membership and periodic reviews by the Screening Committee to adjust strategies based on performance and effectiveness.
I’m confused here, so there’s no need to unstake from the current delegator? veNEAR will be given to those currently staking?.. this should be clear, especially on CT… degens barely read anything
nice catch, I’m curious about how veNEAR is minted, also what about users holding LSTs tokens like LiNEAR or stNEAR, how can they vote? do they have to unstake to get NEAR and lock in the voting escrow contract?
I believe the Screening Committee will encounter similar challenges to those we faced in the NDC: issues around election/appointment processes, conflicts of interest, decision-making protocols, and timeframes. Few people in the ecosystem are genuinely interested in governance and willing to engage deeply and publicly in the process, as evidenced by the current committees and nodes. Therefore, I suggest removing the Screening Committee and not revisiting the idea.
Regarding the Security Council, it should be managed exclusively by NF (like a board with people for example: Illia, Bianca, Abi, Chris, etc.) as the New Governance settlor , with clearly defined responsibilities and actions.
Our validator relies on a unique token emissions model that is heavily dependent on NEAR meme subsidies. Based on our understanding of the proposal, validators without LST compatibility may face significant challenges. We’re eager to clarify how this will affect our specific operations.
This model hinges on committees and evaluation criteria. It’s unclear how this resolves the inherent gatekeeping challenges and the lack of support for diverse contributions while avoiding the same individuals making all decisions about the ecosystem that do today.
If I understand this correctly, only LSTs (and non-staked NEAR which doesn’t make any economic sense) will be eligible for veNEAR, and if we want to stake NEAR and convert to veNEAR, it must go through NEAR → LST → veNEAR route. I see 3 problems with this approach:
LSTs have quite high fees right now, the lost APR is an operational expense (even though voters are the ones who suffer from this), and the amount lost / spent on these fees should be considered if we want veNEAR to stay for years.
2 LST projects are a point of failure. What if an LST DAO is attacked and all funds are staked to a validator that has 99% fee? Or if the LST DAO (that consists of LNR and mpDAO holders) collectively decides to increase fees to 99% to buyback LNR and mpDAO. If it takes 3 months to unstake, the whole yield during that time will be lost. In the worst case, the LST DAO can even steal all the staked funds completely, because the LST contract is the one that the actual staked NEAR belongs to. Not to mention that these LST ‘DAOs’ are not as decentralized as many of us imagine. Not everyone is ready to expose themselves to these risks, but there’s no choice if they want a reasonable APR while participating in the governance. Since obviously no one is going to convert NEAR directly into veNEAR without staking, the entire governance framework will be in a very bad state if, for example, metapool.sputnik-dao.near (that needs 2 people to approve a proposal), for some arbitrary reason decides to shut down the operations. And the 3-months unstake period makes it impossible to react quickly to such incidents.
What’s the point of using LSTs if they’re locked for 3 months? Aren’t LSTs only used because they are supposed to be liquid? If there’s some technical challenge implementing the veNEAR staking without LSTs, why not make a new LST that has 0% fee, can’t be stolen or changed by anyone, and is deployed for each validator automatically, so that the experience is roughly the same as with the native staking that we have today?
I think there should be an option to natively stake NEAR to a validator of your choice, and get veNEAR for that. This will also solve the problem of lower veNEAR yield than if the user just staked NEAR.
Also, regarding the screening committee, we may encounter the same issues as with NDC. But since the number of people involved is not high, it’s easier to notice when the committee members vote based on something other than the facts, so there can be a solution this time. Perhaps, requiring them to stake veNEAR as well, and slashing if the security council finds out that the screening committee misbehaves? That would also imply that 1) the screening committee consists of people who are actually involved in the ecosystem and are capable of making it better, not just an employee who doesn’t have much to lose and has much to gain, 2) they need to submit the rationale for their votes if they reject a proposal during the pre-screening stage, 3) there is a clear set of rules by which a proposal can be rejected during pre-screening, 4) there are incentives for reporting cases when an application was rejected without enough evidence, or for a reason that is not covered in the pre-screening guidelines.
Removing the screening committee completely is also an appealing option, but in that case, we’ll need a replacement that will filter out spam and scam proposals. Not everyone is capable, or has the incentive, to do thorough rug checks and reality checks on every proposal, so the more layers of protection, the better, as long as these layers don’t filter out the legitimate projects.
I appreciate the effort and thoughtfulness behind the “House of Stake” proposal. After reviewing it thoroughly, here are my perspectives on its various aspects:
Pluses:
Utilization of 0.5% Annual Inflation: I strongly support this idea. We discussed it last November at Nearcon, and if the NEAR Foundation agrees, I believe it will be beneficial for everyone.
Incentivization of Governance Token Holders: This is a commendable approach that will likely increase active participation and commitment from stakeholders.
Temperature Check: While I appreciate the intention behind this, I have some concerns about its effectiveness given the relatively small size of the NEAR community. Similar initiatives haven’t worked well in other ecosystems like Arbitrum, potentially leading to prolonged processes with minimal benefits.
Minuses:
Token Locking Mechanism: Creating another venue for token locking may inadvertently drain liquidity from other essential parts of the ecosystem, such as DEXs, lending & borrowing platforms, and NEAR validators. As we have discussed over the past six months, leveraging existing contributions seems more practical. The NDC implemented a system that considers users’ activities across the ecosystem, and it is open-source. Voting power should be based on these existing contributions, with optional enhancements through locking mechanisms if desired. Given NEAR’s current liquidity constraints, creating another locking venue may not be the best approach.
Committees: The challenge with active contributors remains. The risk is ending up with the same individuals in governance roles, which has been the case for the past five years. To address this, we could consider minimizing the number of committee seats and ensuring frequent rotation. Alternatively, we might eliminate the human factor entirely, relying solely on governance token holders for decisions, with the NEAR Foundation providing an emergency brake.
Proposed Solutions:
Governance Token/NEAR Holders as Voters: This approach ensures direct community involvement.
Emergency Brake: This could be managed by the NEAR Foundation or a set of trusted individuals. However, given recent trust issues, transparency and accountability in this mechanism are crucial.
Additional Suggestions:
AI Integration: Leveraging AI, such as fine-tuning Llama or ChatGPT, for initial checks could streamline the process and eliminate the need for a temperature check, enhancing NEAR’s position as an AI-friendly ecosystem.
Legal Wrappers: Any committee will require a legal framework to protect participants.
Benchmark Development: Reports alone are insufficient. We need predefined benchmarks that reflect our primary goals (e.g., user retention, liquidity). Launching governance without these metrics will lead to inefficiencies and misuse of resources. The NDC’s open-source documentation on this topic could be a valuable starting point.
Conclusion:
While the “House of Stake” proposal has many merits, addressing the above concerns and incorporating these suggestions will better align it with NEAR’s long-term objectives. I look forward to seeing how the community evolves this proposal and am ready to contribute to these discussions.
I support the decision to implement ve tokenomics, as it has proven to be a good idea. However, I am completely against the proposal to build the entire governance framework around LST providers, who can change fees as they please and update contracts and delegation principles at any time.
To avoid creating threats to the decentralization of the protocol, a new staking contract should be added to the pool.near base instead, which mints veNEAR during staking, and LST tokens should have a decreasing coefficient.
"doesn’t stake weighted voting just put the governance in the hands of a16z et al
I don’t have anything stark to point out. Voting power correlating with the length of time staked should ensure that those with the most amount of intentional commitment as signaled by time locked will covet an increased share of voting power.
I am pro LRT integration into the framework, as long as considerations can be made to omit the risks that @zavodil and the above have highlighted.
“This model hinges on committees and evaluation criteria. It’s unclear how this resolves the inherent gatekeeping challenges and the lack of support for diverse contributions while avoiding the same individuals making all decisions about the ecosystem that do today.”
Seems like a good opportunity to test out an AI president/committee/etc, or at least prepare for one!
FWIW - mistakes will be made. Nothing is perfect right outta the gate. Radical experiments make for radical success and, hopefully, we can mitigate the impact of any failures with the appropriate safeguards.
Hi, first of all, happy to read that decentralization remains a priority, I honestly hoped we would be further ahead by now. As interesting as the highs & lows of the NDC have been, I would love to see more of our collective learnings reflected in this proposal. While a tabula rasa approach is valid, we should try our best to learn from those expensive mistakes we’ve made. Moreover the proposal only creates a path towards a very minor form of decentralization (in line with protocol governance), probably completely the opposite of what was the intended result of NDC 2 years ago, (unless the Screening Committee makes certain changes along the way).
A vote-escrowed token is a brilliant idea which has worked in similar situations however as mentioned already by several people, we need to make sure that it does not create an imbalanced playing field for stakers with unintended unfairness. Moreover it creates an additional layer of complexity which in my opinion does not further decentralization of our community.
Switching to stake weighted? I don’t think anyone doubts this to be the correct move, however I would still vouch for certain reputational or quadratic voting factors to be considered within the voting framework.
Screening committee & delegates, I’m a big fan of this approach actually however certain checks & balances are missing in my opinion and could lead to big problems similar to the ones we’ve seen in the past. I would be interested to understand this architecture better as I think it could alleviate some of the concerns I’ve shared above (if executed properly)
As this is a highly complex matter, it would be great in my opinion if a 30 minute workshop could be planned and shared with the wider community.
Hello folks! Dennison from Tally.xyz here. New to the forum, but a Nearcat since 2020.
For some quick background, Tally powers the governance of some of the largest protocols in the ethereum space: Arbitrum, ZkSync, Wormhole, and many more. Folks manage over $30b in DAO assets on our platform and have used our tools to transfer more then $600m. We have been intimately involved in the design and implementation of some of the largest DAO’s in the space.
This is a great proposal by Gauntlet, really exciting stuff and aligns with what we’ve been thinking ourself is needed for successful governance.
I would like to formerly ask to be considered as an implementation partner to build out the tooling to support NEAR’s Governance.
We would be very excited to support the NEAR vision for governance.
Hello everyone! Anthony from Aragon here. Apologies for coming in like a carrion crow but we are very exited to read and hear about NEAR’s next steps in onchain governance, especially considering it is ve related, something we expertise in!
Aragon has been providing DAO tooling since 2017 and the likes of Lido and Curve use our V1 framework and most recently Polygon announced a few weeks ago they will be using Aragon V2.
What may be most pertinent to the NEAR community is that Aragon has particular expertise in ve builds. Curve is the biggest originator of the veToken setup which is on Aragon and we are working with or advising half a dozen other projects currently on their veBuilds. We are the only DAO service provider with full-stack ownership. We also have a designated team for custom deployments as well.
We’d love to be formally considered to work with NEAR on this build and considered as an implementation partner.
Please don’t hesitate to shoot me a message here or on X (A_Leutenegger).
I haven’t yet been able to unpack all the nuances of this proposal but overall I feel this approach will be more aligned with the goals of the ecosystem.
Whilst the ‘one person one vote’ framework was interesting, it had a major flaw in enabling participants who had no skin in the game. This seems to fix this however it does bring its own set of challenges that should be mitigated wherever possible.
I also share similar concerns to others in this thread highlighting the overdependence on LSTs (non-staked NEAR deposits are at an economic disadvantage). I have however seen discussions for a workaround on X and that should help address them.
With a lot of staked NEAR being locked up for community governance it would also be interesting to see how DeFi primitives can leverage veNEAR in their offerings.
Excited to see this proposal! We’re interested in the veNEAR concept and the architecture behind locking up tokens for multiple years to get governance power we think at the start will be rather hard to convince. However, once rewards are turned on and we have more use cases for governance, this could be a good example to a lot of future mechanisms. This gamified delegation reminds us a bit of Maker’s new Endgame delegation tokenomics and is something we will be keeping a close eye on in the next few months.
The screening committee will be an interesting concept and we are looking forward to learning more about it. Further committees and working groups on related ideas we’re sure will happen. It would be great to get a timeline on the order of events.
What is the expected timeline on this? We were planning on creating Snapshot clone for all apps using NEAR to manage their governance, proposals, votes etc. Would this cover that use case?
FWIW - mistakes will be made. Nothing is perfect right outta the gate. Radical experiments make for radical success and, hopefully, we can mitigate the impact of any failures with the appropriate safeguards.
