Landscape of Professional Delegates: Next wave of DAO Governance
Special thanks to Bobby, Deniz, Hasu, Fabian, Brian, Daniel, Federico, Shawn, Avi and Phil for review and feedback on earlier versions of this article.
DAO governance has become increasingly complex and overwhelming in the last 6 months. The solution that is becoming more prevalent is “Delegation”. However, most community members are still not delegating or are delegating randomly and don’t even know who their delegates are.
This is a HUGE opportunity loss for DAOs.
If you can delegate your voting power to the right delegates, you will not only increase voter participation rate which strengthens DAOs’ robustness but also grow DAOs by allowing more informed decision-making and proposal creation. (= increasing the value of the tokens you hold!)
But how can we know the right ones to delegate to?
There is a new trend: some people started showing up every day and participating full-time in governance to help protocols succeed.
We call them “Professional Delegates.”
In this blog, we have compiled everything from what a Professional Delegate is to the activities and characteristics of each professional delegate in one place. So, you don’t have to search from messy forums all by yourself.
Let’s dive into the next wave of DAO governance!
What is a Professional Delegate?
Decentralized governance is a crucial part of DAOs/Protocols to be robust and resilient. However, as you all know, voting apathy is still a problem, and the voting participation rate of DAOs/Protocols is very low, currently averaging about 5–10%.
This leaves DAOs vulnerable to governance attacks enabling a small number of groups with a concentrated amount of tokens to do malicious things for their benefit.
So, should we get more community members to participate in governance?
That is not realistic. It takes a lot of time and commitment to participate in governance, and the workload is almost as much as a full-time job. Most community members have neither the motivation nor the time to commit to it.
In this context, the movement that has been taking place in decentralized governance is the shift from direct democracy to representative democracy or fluid democracy. Simply put, it’s “Delegation.”
Delegation is the process by which holders who are unwilling to participate in governance delegate their voting rights to other representatives to participate on their behalf, allowing for more informed and quality decision-making and increasing the voting participation rate.
MakerDAO is a great example of this.
Last August, they launched the “Recognized Delegate Program”, a program in which delegates are compensated monthly based on defined metrics such as governance participation rate and delegation volume.
From there, voting participation, forum participation, and the number of delegates started to increase. The level of decentralization has been rising as the influence of big holders has been steadily declining.
Under these circumstances, a new trend has emerged in the delegation.
Until now, most of the delegates were individuals such as influencers or founders who volunteered their time to participate in governance. (some college blockchain clubs too)
However, as appropriate roles and compensation began to be established for delegates at Maker, and as governance became more active with forum posts and proposals, some delegates began to participate in governance as a full-time job.
Moreover, many of these delegates are not individuals but teams assembled under a particular organization or brand.
We call them “Professional Delegates,” and we think that, as in the existing political system, most delegates will begin to work full-time and act with their teammates under an organization or brand in the future.
At the same time, there will be individual professional delegates as well, just like Solarcurve, Linda Xie, Hasu, and Lefteris.
Why are Professional Delegates important for DAOs?
One of the major determinants of quality voting is how well they understand the context of proposals, but making more informed decisions requires a great deal of reading and research.
In addition, for the DAO to remain robust, it is necessary to maintain the above level of governance participation on an ongoing basis. Otherwise, it might be subject to governance attacks during periods of low participation.
This is why we need delegation rather than pursuing pure direct democracy. And if you look deeper into this delegation model, you’ll find more factors that make professional delegates important for DAOs.
For many DAOs, the number of proposals continues to grow (3 weeks ago, optimism had 18 proposals lol), and governance is on 24/7, 365 without stopping. Moreover, the scope of proposal coverage is getting broader and broader, requiring a wide range of expertise and domain knowledge. Data analysis, legal knowledge, understanding of various domain products, etc… are beyond the scope of what one person can cover.
As Linda tweeted, if individuals try to do this on their own, I’m pretty sure they will be burned out at some point.
Another important point is that when individuals act as delegates, the reputation is only accumulated by each individual. Even if an individual work full-time in governance, one day, that period of activity will end, and the reputation credit will be lost.
In the case of a Professional Delegate, the reputation is accumulated in the organization or brand (Gauntlet, StableNode, etc), not in the individual. Therefore, as a delegate, they can keep earning a reputation and contribute to governance as a delegate in the long run.
In short, so why do we need Professional Delegates?
Active, constant, and sustainable participation in governance + Covering a wide range of expertise and domains of knowledge + Transparent voting + Accumulating reputation in the brand to participate in governance in the long run
= Professional Delegates
Professional Delegate Case Studies
Okay, so who are the current professional delegates then?
let’s have a look.
(abc order)
Flipside Governance
Flipside is a team of 7, led by Avi and Fig (prob the delegate with the largest team size). They participate in the governance of the DAOs below.
What makes them unique is, first, their beautifully designed team structure. Each team member has a clear role and responsibility to collaborate and participate in governance as a team.
Also, they have a democratic voting process so that regardless of position, all team members have equal voting power in every proposal. (they issued $GOV to allow their team to make voting decisions on Snapshot! learn more)
Team Structure
- Engagement
- Lead in forums, on Discord, and any public discourse in between - Research
- Lead in publicity, such as Flipside Gov Recap - Data
- Lead in data analysis on proposals - GovOps
- Lead in operations, such as voting and team management
Another key characteristic of Flipside is Data Analysis. They are a governance team that belongs to Flipside, a data analysis tool, so they leverage their data network to participate in governance, such as quantifying the impact of proposals and tracking important metrics for DAOs.
Last thing but not least is their commitment to transparency. they clearly communicate their votes and rationales to delegators and community. For example, they provide a weekly recap called “Flipside Governance Recap” to share their votes and rationales for each week, along with governance analysis and news curation.
Delegate to Flipside Governance ➡ flipsidecrypto.eth
Gauntlet
Gauntlet is a team of 5, led by Matt (Paul, Nick, and 2 data analysts) which participate in the governance of the DAOs below.
They are a governance team belonging to the Gauntlet Platform, a service dedicated to providing insights into protocols such as quantitative risk management and parameter optimization.
Here is an example of the report for MakerDAO.
They spend the majority of their time quantitatively analyzing protocols at Gauntlet Platform, and picking numerical parameters is the biggest advantage of Gauntlet. So, what makes them unique as a delegate is that they use their accumulated experience and analytical and technical skills to participate in governance.
In the process of proposal due diligence, they have 2 data analysts to check each proposal, and they have a strong value that they only vote on quantitative proposals based on that analysis.
Not only on voting but also they provide feedback to forum posts and proposals with Gauntlet’s analysis. check this out.
Apart from the delegate work and risk analysis + parameter optimization service, they are building a DAO treasury management tool called Aera.
Delegate to Gauntlet ➡ gauntletgov.eth
GFX Labs
GFX Labs is a team led by Getty and Paper, and they participate in the governance of the DAOs below.
If you check out their record of contribution and involvement in DeFi protocols, it probably makes sense that they are comprised of heavy DeFi users and builders. GFX Labs has authored half of the successful proposals on Uniswap, as well as having listed several assets and developed the price oracle on Compound. Moreover, if you look at Hop Protocol, you’ll notice that they have authored the majority of proposals up to date …
Another characteristic of GFX is that they always give clear and detailed rationales for voting proposals in forums, regardless of whether they vote for or against them.
Apart from the delegate work, they are working on building Interest Protocol and Poppie Card
Delegate to GFX Labs ➡ gfxlabs.eth
Llama
Llama is a service DAO founded by members of various DAOs, which participate in the governance of the DAOs below.
As mentioned, their unique part as a delegate is that Llama team is comprised of experienced contributors in the DAO space (Index Coop, Aave, and others), so with input from members of various DAOs across DeFi, they participate in governance with high context and high engagement.
For example, check out their delegate team for Balancer. Everyone is well experienced working at DAOs/Protocols.
Moreover, Llama has been supporting DAOs with many proposal submissions, especially for Aave. To date, Matthew and Llama team authored many improvement proposals from risk management to protocol upgrades.
Considering the number of their proposals, treasury management, and financial report at Aave, it’s probably fair to say that they are one of the most engaged Aave community members as a delegate.
Apart from the delegate work, they work on protocol engineering, treasury allocation, and analytics for DAOs, such as implementing protocol upgrades, designing treasury strategies and liquidity incentive programs, and building financial dashboards and reports.
Delegate to Llama ➡
Aave: 0x5B3bFfC0bcF8D4cAEC873fDcF719F60725767c98
Balancer: 0x64cc60a9F6F97ddCb8ac1378dA9390b85Be6dA37
Nouns: nouns.llamagov.eth
Maker: 0x4e314eba76c3062140ad196e4ffd34485e33c5f5
Reverie
Reverie is a team of 5, led by Larry and Derek, which participate in the governance of the DAOs below.
The characteristic of Reverie is that they participate in governance as a delegate by leveraging their own experience in supporting DAOs in a wide range of areas. From treasury allocation to growth, business development, governance design & implementation, on top of all the legal and recruitment stuff. For example, they have been actively involved with the dYdX protocol, including launching and leading the Grants program, and launching the New Asset Listing group.
They recently posted a proposal for Sub DAO formation at dYdX.
Apart from the delegate work, they run “I Pledge Allegiance,” which is one of the best quality podcasts in the governance space.
Delegate to Reverie ➡ reveriegov.eth
StableNode
StableNode is a governance research and development company headed by Maker Mafia Gustav and Doo. They participate in the governance of the DAOs below.
StableNode is characterized by their commitment and engagement. When they choose to get involved, they get deeply involved in governance.
Check out their voting participation rate.
You can check out their voting history from here: https://stablenode.notion.site/bfaaf09e108247a78dd7f1ab1244221c?v=3cbe615520a54d6aabed8b753a75c4e1
Not only about voting, but they are highly engaged in forums (actively expressing their opinions on sensitive topics too) and often write proposals to bring positive impact to DAOs. They also participate in working groups and even lead operations at Element Fi.
Apart from the delegate work, they are working on building governance products.
Delegate to StableNode ➡
stablelab.eth (Aave,Safe,1inch,Paladin)
or
stablenodegov.eth (Optimism,Hop,Balancer,ElementFi,Instadapp)
*they are slowly moving to new delegate address: Stablelab.eth
Also, it’s interesting that current professional delegates can be grouped into one or both of the 2 types.
- Product development type
- Professional delegate that belongs to the company building product - Consulting type
- Professional delegate that belongs to the company providing consulting services to DAOs/Protocols
The reason why most professional delegates have a separate main component is that being a delegate is an effective way to build a presence and reputation for DAOs and Protocols, but more importantly, there are still few DAOs that pay their delegates properly. While engineers and marketers are paid appropriately, the new DAO-native job “delegates”, which requires the same or more level of commitment, is still viewed more like unpaid volunteer work. As a result, the number of professional delegates is still small. but as DAOs grow, the number has been slowly increasing…
Closing thoughts
The general trend of DAO governance is to trace the history of national politics.
Imagine current delegates are like “Protocol Politicians.”
It makes sense that roles in governance are becoming full-time jobs and team bases. Yet, national politics are far away from perfect, so we need much more experimentation and failures in governance.
To this end — Professional Delegates offer robust, scalable, and sustainable solutions for DAO governance. And as DAOs grow in size, Professional Delegates play a vital role in maintaining decentralization.
If you own a governance token of any DAOs, take a look at the Pro Delegates that are active there. You may have different experiences and outcomes from your DAOs!
About us
Thanks to so many frictions in governance participation, today’s pro-delegates and voters spend a lot of time on unnecessary tasks such as finding information, communicating, and summarizing information (we call it “Work about Work”) rather than tasks that require skills and are important to DAOs.
That’s why we are building Senate, a new set of governance facilitation features to make governance participation frictionless and allow them to focus on tasks that really matter; DAOs can expand the possibilities much further.
DAO governance is full of potential, and we couldn’t be more excited about it.
If you are interested in using the alpha ver or joining our team, please reach out to us!
@ kohei_ngt (telegram) / @ koheingt (twitter)
