VNP-014 Change governance parameters

🗳️ Governance Proposals Network Parameter Proposals
1

VNP-014 Change governance parameters

This is a proposal to update the following network parameters which control the duration and thresholds for governance votes to update network parameters themselves and create markets.

The network parameters relating to governance for adding and updating assets, freeform proposals, and market update proposals are unchanged, the rationale for this will be discussed at the end of this proposal.

Vega governance parameters balance three competing priorities:

  1. Maximizing decentralization and permissionless market creation,

  2. Allowing the community to successfully make important and helpful changes through governance, while making sure bad proposals are not enacted by ensuring they receive sufficient scrutiny,

  3. Speed of decision making.

Clearly, allowing quick votes promotes speedy decision making. However, to ensure proposals receive sufficient scrutiny means requiring sufficient participation in every vote and enough time for all interested token holders to review each proposal. But this increases the risk that some votes don’t pass simply because not all token holders can pay attention day-to-day to the happenings on Vega network (exciting as it is).

This proposal suggests the following change to parameters controlling network parameter updates:

Parameter Current Val. Proposed Val.
governance.proposal.updateNetParam.minClose 24h 5d
governance.proposal.updateNetParam.minEnact 24h 5d
governance.proposal.updateNetParam.requiredParticipation 9.0% 2.5%

Effectively it trades speed of decision making for allowing lower participation in votes. During the Alpha Mainnet launch, rapid turnaround could be achieved with low risk by requiring high participation. This was successful because the entire community was paying attention for the launch. However, outside these key update events, such high participation thresholds take longer to reach in any case, and in fact may not be reached at all.

At this stage of the Vega mainnet it is right to allow a smaller group of voting token holders to make changes as long as enough time has passed for a proper review. Votes on parameters controlling the entire network will receive greater scrutiny in time while requiring fewer token holders to participate to reach quorum. The additional days of scrutiny will allow parties who disagree with the proposals to publicize the proposed change and drum up opposition amongst token holders.

The minimum closing time and enactment time are kept at 5 days to balance the need for reasonably quick changes with the need to ensure every proposal will be reviewed. As the network matures we expect to review these and propose further adjustments if warranted.

Parameter Current Val. Proposed Val.
governance.proposal.market.minClose 24h 7d
governance.proposal.market.minEnact 24h 7d
governance.proposal.market.requiredParticipation 7.0% 1.0%

The rationale is similar for market creation. Here the suggestion is to allow an even lower participation threshold because (especially with new features like Ethereum oracles) Vega will be attractive to some “long tail” / “esoteric” markets that would only be of interest to a relatively small portion of the Vega token holders. On the other hand, market launches don’t need to be rushed and 7 days for scrutiny means that any potentially “bad” market can be discovered and the community will have time to rally and vote against the proposal.

Finally let us briefly discuss the rationale behind leaving asset proposals, asset updates, freeform proposals and market updates unchanged.

  1. Market updates: these can already be performed by market LPs utilizing their equity-like-share and we believe the current settings balance the criteria set out above well.

  2. Asset proposals and asset updates need much fewer changes and we don’t believe it’s worth running the votes now.

  3. Freeform proposals are less essential to day-to-day functioning of the protocol and we don’t believe it’s worth running the votes now.

Note that this proposal will generate 6 votes as it is. In a future release Vega will allow a single governance vote to change multiple network parameters. At this point it will be worth revisiting the other parameters controlling governance.

Full proposal JSONs will be posted with appropriate closing and enactment times once (if) there is agreement on the forum.

4 Likes
2

makes lot of sense to me! definitely in favor. appreciate detailed context here

2 Likes
3

Okay, proposal JSONs with closing / enactment on 12th September, noon:

{
  "rationale": {
    "title": "VNP-014 Change governance.proposal.updateNetParam.minClose",
    "description": "Change `governance.proposal.updateNetParam.minClose` to `5d` from the previous value of `24h` as set out in [VNP-014](https://community.vega.xyz/t/vnp-014-change-governance-parameters/4335)."
  },
  "terms": {
    "updateNetworkParameter": {
      "changes": {
        "key": "governance.proposal.updateNetParam.minClose",
        "value": "120h"
      }
    },
    "closingTimestamp": 1694520000,
    "enactmentTimestamp": 1694520000
  }
}
4 
{
  "rationale": {
    "title": "VNP-014 Change governance.proposal.updateNetParam.minEnact",
    "description": "Change `governance.proposal.updateNetParam.minEnact` to `5d` from the previous value of `24h` as set out in [VNP-014](https://community.vega.xyz/t/vnp-014-change-governance-parameters/4335)."
  },
  "terms": {
    "updateNetworkParameter": {
      "changes": {
        "key": "governance.proposal.updateNetParam.minEnact",
        "value": "120h"
      }
    },
    "closingTimestamp": 1694520000,
    "enactmentTimestamp": 1694520000
  }
}
5 
{
  "rationale": {
    "title": "VNP-014 Change governance.proposal.updateNetParam.requiredParticipation",
    "description": "Change `governance.proposal.updateNetParam.requiredParticipation` to `5d` from the previous value of `24h` as set out in [VNP-014](https://community.vega.xyz/t/vnp-014-change-governance-parameters/4335)."
  },
  "terms": {
    "updateNetworkParameter": {
      "changes": {
        "key": "governance.proposal.updateNetParam.requiredParticipation",
        "value": "0.025"
      }
    },
    "closingTimestamp": 1694520000,
    "enactmentTimestamp": 1694520000
  }
}
6 
{
  "rationale": {
    "title": "VNP-014 Change governance.proposal.market.minClose",
    "description": "Change `governance.proposal.market.minClose` to `7d` from the previous value of `24h` as set out in [VNP-014](https://community.vega.xyz/t/vnp-014-change-governance-parameters/4335)."
  },
  "terms": {
    "updateNetworkParameter": {
      "changes": {
        "key": "governance.proposal.market.minClose",
        "value": "168h"
      }
    },
    "closingTimestamp": 1694520000,
    "enactmentTimestamp": 1694520000
  }
}
7 
{
  "rationale": {
    "title": "VNP-014 Change governance.proposal.market.minEnact",
    "description": "Change `governance.proposal.market.minEnact` to `7d` from the previous value of `24h` as set out in [VNP-014](https://community.vega.xyz/t/vnp-014-change-governance-parameters/4335)."
  },
  "terms": {
    "updateNetworkParameter": {
      "changes": {
        "key": "governance.proposal.market.minEnact",
        "value": "168h"
      }
    },
    "closingTimestamp": 1694520000,
    "enactmentTimestamp": 1694520000
  }
}
8 
{
    "rationale": {
      "title": "VNP-014 Change governance.proposal.market.requiredParticipation",
      "description": "Change `governance.proposal.market.requiredParticipation` to `7d` from the previous value of `24h` as set out in [VNP-014](https://community.vega.xyz/t/vnp-014-change-governance-parameters/4335)."
    },
    "terms": {
      "updateNetworkParameter": {
        "changes": {
          "key": "governance.proposal.market.requiredParticipation",
          "value": "0.01"
        }
      },
      "closingTimestamp": 1694520000,
      "enactmentTimestamp": 1694520000
    }
  }
9

Update:
The proposal was submitted to the Governance dapp for a vote and passed.
The proposal has been enacted since 12 September 2023 19:00 (GMT+7)