Summary of Function X Governance Discussion on 27th January 2022
Published in
8 min readJan 27, 2022
Thank you to those who participated in the Function X Governance Discussion meeting via Zoom. We had over 31 participants in this meeting. In this meeting, we discussed the current governance and suggestions for future adjustments to improve the governance together with community members. We also covered the questions that have been collected from the Function X forum and Zoom meeting chat messages. If you miss the LIVE session and would like to catch up with the full discussion, watch it below:
Here is a brief summary:
- From community: Quorum cannot be reached unless the company votes
It is incorrect to say that if the foundation validator does not vote, it is impossible to reach a quorum.
There are actually 2 mechanisms to reach a quorum. One is through validator voting, and the other is the addresses which hold the foundation tokens to vote.
For the first mechanism, our position is that the foundation validator shall not vote, including voting to abstain.
On the other hand, the addresses which hold the foundation tokens are allowed to vote. So, it is clear that the delegators who hold foundation tokens are allowed to vote, but not the foundation validators.
It will also become challenging for a proposal to pass the governance voting if the public validators do not vote, because currently many people are holding and delegating tokens to public / foundation validators, but they did not vote. - From Richard: Research on existing grants in blockchain space (Web3 Foundation, Ethereum Support Program, and Uniswap Grant Program)
Grant amount:
The current 3 popular programs offered tiers on the grant proposals, and the maximum amount on the highest tier is $100,000 (lowest tier is $10,000 and mid tier is ~$50,000). As a reference, The median amount granted from Ethereum Support Program across 6 featured projects such as Turbo-Geth, Uniswap, Circom, Ethers.js is $37,500. Additionally, the amount requested for the creation of Uniswap back in 2018 was $50,000 + 120 $ETH. Taking the highest value of $ETH then, that would amount to $170,000.
Guidelines:
These 3 grant programs have very strict guidelines which require project milestones, team background, and Github account. Grant applicants would be required to have a proven track record and a working concept to show as well as a clear budget breakdown and project roadmap and milestone. Additionally, having an MVP is vital in being a grant recipient and bounty winner.
Voting committee:
The Uniswap Grant Program is managed by a group of 6 committee members and they are managing a $750,000 quarterly program to fund projects (up to 13 projects per quarter based on the research date).
It is very important to have more voices from developer communities who will be observing from a technical perspective without any emotional attachment. - From Community: How to build the community’s motivation to apply for the EGF now if two public-community proposals have failed?
Voting mechanism adjustment
We have done assessment from our side and propose to change the voting mechanism to increase transparency and decrease dependency on the foundation validators. Here are two ideas that we have:
- Decrease quorum percentage
We see some suggestions from community members to tie the quorum to non-foundation (public) validators and exclude the foundation validators. The other option is to decrease the quorum and calculate based on the current mechanism. This option is better and easier to implement on the code, without affecting the current flow.
- Add different categories and implement different deposit fees per category
The idea is to decrease the deposit fees from 10,000 $FX to 5000 $FX, with a cliff of requiring a deposit of 5% of asked value. For example, if the proposal asked for 100,000 $FX, the required deposit will be 5% of 110,000 $FX (5,500 $FX). From our initial assessment, this solution is straightforward and can be implemented on the code without affecting the current flow.
We are proposing to adjust the quorum and deposit fee to make sure it is not an obstacle to propose a proposal, and the bar is not too low. It is to prevent scammers from being approved and ensure the ecosystem is growing healthy.
Other research result (proposed):
Based on our research on other grant programs, there are committee teams that function as gatekeepers of the fund. We have this committee team on FXDM, and hope that we can apply this to proposals as well. This idea can also include community members to be on the committee and represent the community’s voices in the voting.
The other idea that we found in the forum is arranging a program called Entrepreneur in Residence. In this program, we can pair up people with different abilities, for example, a project that has good marketing people might need a smart contract developer to bootstraps. This is the take home idea that we can take a look at.
Feel free to give your ideas on the Function X forum, so we can discuss and implement it. - From Ive Verhaegen: Right now you have company validators / FX-members validators and 3rd party validators. Concerning these 3rd party validators (like Litecoin Foundation /Eur. Uni. Cyprus/…). were they aware of the proposal? And how can we, as the public, know that they are aware of the proposal and voted?
The 3rd validators are slowly gathering the tokens, so voting power is increasing day by day. We are not sure if they are aware of the governance proposal, but from now, what we can do is to alert them and try to get their Point of Contact to communicate and encourage them to be active in the Function X Forum.
As a note, it will be up to them to vote / not to vote. We will try to reach out to them to get involved, but the decision will be in their hands. This is consistent with our previous discussion in the latest All-Hands meeting, to show the validator’s voting records on the validator main page. This feature will help the delegators to be aware of their validator’s actions and help them to choose their validators. - From Richy Shadowlux: from what I am hearing so far, various categories in the EGF are irrelevant, given the extreme focus on the technical side.
This statement is correct.
To answer this question, we also want to mention that FXDM is available for non technical side and the purpose of FXDM is to provide easier access to the funding, without going to propose a proposal to EGF. - From Ive Verhaegen: Can and will the company give the 10K back to the DAOVerse?
Yes. We appreciate it and we have talked about it offline. We will definitely give the 10k back to DAOVerse. - From Pixel: You should set a max amount that the company is willing to provide. Proposals seem to be over the top when they ask for funds. The first one was 750k while the new one being discussed is 250k for marketing a project.
We agree that the Foundation needs to have better guidelines, and to be more inline with how other foundations see these things.
One of the options is to have the funding in tranches with clear milestones. Funds can be unlocked automatically if the milestone has been reached. It is a better way to improve the current flow.
In addition, other grant programs have a quarterly amount (for example, $750,000 per quarter) and committees that work not only as decision makers, but also as supervisors and mentors. We can take a look more on this and see how we could apply this to Function X governance proposals. - From This_Dutch_Guy: Are there ideas/proposals given to FXDM and passed to get the required funds for their proposal?
We are working right now to improve the quality of our marketing and currently looking for creators and marketing companies to give better definition and guidance in what we are doing here. - Suggestion from Clarence Soh: A team to help guide good potential projects in submitting proposals in tranches (milestones), rather than one big lump sum. Example: DAOVerse — it is a good idea, but the amount could be scaring voters off.
- From Richy Shadowlux: I do think a lot of people misunderstand the costs associated with marketing. Marketing costs money, staff and equipment costs money.
We do not deny that. As the project progresses, the requirement for funds will increase. We are not saying that a project cannot request a high amount, but it’s recommended that the amount should be in tranches. The best way is to have objective tranches, so the community can also evaluate the progress.
This can also be applied on the Marketing side. For example, instead of asking for funds to create 10 Youtube videos, the community members can propose for 1 Youtube Video with X targets (i.e likes number, hits) and can apply for the second video once it hits the target and so on. - From Ive Verhaegen: I heard from DAOVerse that they are going through with their project. Can we expect that they will return one day to the Function X blockchain, because they will get help from Function X. How do you see the future concerning DAOVerse?
Patrick: We had a 2-hour call with Zac after the proposal voting ended and we spoke about that. It is just a matter of DAOVerse totally focusing on Function X Blockchain or not. Returning to Function X was never a question for the DAOVerse team. But as we know, currently the Function X blockchain was way behind other blockchains (i.e Solana, Avalanche, Polygon) which have more mature NFT communities. We aim to have DAOVerse as a Multichain game. We are glad to accept help for the Foundation on the blockchain development side. I have chosen Function X since the beginning because of the MultiChain and Cross Chain features. It is good that DAOVerse has pushed to the limit and helped Function X governance to improve in the future. - From Superbit: Are we able to touch on how to get liquidity for f(x) Variable?
There are two options, the first option is to build liquidity internally by porting liquidity to traditional exchanges.
The second option is to engage market makers to provide liquidity. We have not reached out to outside parties regarding this, but there is a great potential to work on this (i.e Kronos team has come to the forum and we can discuss it in the near future).
Some community members are asking how to increase transaction volume on FXCore. Now the developments in the pipeline aim to increase the volume. f(x)Variable’s native token is $FX and it is currently running on Function X Testnet. We will launch several Testnet versions before we officially launch it on Mainnet. We believe that f(x) will have a contribution to increase transactions on Function X, because every time users do transactions on f(x)Variable (i.e short / long $TSLA), it will be recorded on the Function X blockchain.
Another thing that is exciting, is Ethereum Virtual Machine (EVM) compatibility. Function X will be able to support solidity codes that are already running on other chains and are EVM-compatible seamlessly. It will enable the dapp that are already deployed on other chains to move into Function X Blockchain and vice versa. We believe it will also contribute to Function X transaction volume in the near future.
That’s all for the Function X Governance discussion. Once again, thanks for your participation in this meeting.
What do you think about this meeting? Is it a good way for you to engage and participate? What can we do to make it better? We welcome your discussion and feedback at https://forum.functionx.io
