The Rationale: Next Steps After Rejection of V2 YIP-0 and YIP-1
With YIP-4 on DAO V1, which was executed on May 7th, 2024, the community agreed to transition to the new YOU staking pool, also known as the Commitment Pool, and a new DAO contract, the youves DAO V2. Since YOU stakes determine voting power, both contracts are closely connected and require simultaneous updates.
With the transition to the new DAO, it was necessary to designate the new DAO as the admin, particularly for contracts where the old DAO was the sole admin. The initial step of this process was accomplished with YIP-4 on DAO V1. The second step, accepting the administrator role, needs to be carried out on DAO V2, where YIP-0 and subsequently YIP-1 on had been submitted recently.
As you may have noticed, the quorum for YIP-0 on DAO V2 was not reached. Let’s explore the reasons for this.
When YIP-4 on DAO V1 was submitted, DAO V1 had a quorum of 1,472,749.55 YOU. This means that in order for a vote to be valid, stakes representing that amount of YOU tokens needed to participate. 1,472,749.55 was the final quorum value on DAO V1.
When DAO V2 was deployed on April 26, 2024 the same quorum value, as well as the same quorum lower cap and higher cap, were set. This was a conscious decision, even though it was foreseeable that this quorum would not be reached with the new DAO V2, as the vote weighting of the stakes is completely different and depends on the users’ choices.
What was not entirely foreseeable was how youves stakers would decide when creating stakes in the new Commitment Pool. Would they opt for long cooldowns, high rewards, and high vote weights, or would they prefer to stay liquid and choose shorter cooldown periods? Would they mix different strategies? Naturally, the resulting vote weight of the new stakes would always be lower because 1 YOU in a stake with 50% of the maximum cooldown would count as only 0.8 votes, whereas in DAO V1 it counted as 1 vote.
Additionally, it was not predictable how many stakers would move immediately after the new staking pool was set up. As it turns out, 3 weeks after the change, 477k YOU tokens are still staked in the old staking pool, which no longer receives any rewards.
An alternative approach to account for the drop in available vote weight between DAO V1 and DAO V2 would have been to artificially lower the quorum when the new DAO was deployed. However, this would have been a completely arbitrary decision. If the quorum value were set too low, it could potentially allow a single entity to dominate governance if their stake were large enough.
Next Steps
Therefore, it was decided to maintain the same quorum and, if necessary, repeat the first YIP of DAO V2 until the quorum adjusts to levels that represent the current cumulative vote weight. The quorum adjusts as follows after a vote: new_quorum = 80% * old_quorum + 20% * total_votes expressed in the YIP. It is expected that the quorum will be reachable in 1–2 additional votes.
With this plan in mind, the same YIP as YIP-0 and YIP-1 of DAO V2 will be submitted for a vote again, trusting that the youves community will support that path of action. If you have any questions or concerns, please reach out via Discord, Telegram, or the Forum.
