Simple Summary

This SIP proposes to deprecate the current pDAO (protocolDAO) and replace it with a new governing body, the Risk Council. The Risk Council will be responsible for ensuring that upgrades to the protocol, including parameter updates, are staged as specified.

Abstract

The SIP aims to improve the governance structure of the Synthetix protocol by replacing the existing pDAO with a more transparent and accountable Risk Council. This will allow for more streamlined decision-making, risk management, and protocol improvements. This SIP supersedes the previously rejected SIP-186 and SIP-2034.

Motivation

While the existing pDAO structure has functioned well for the past few years, it is now a primary area of centralization within protocol governance. The pDAO is a multisig controlled by members of the community who meet specific criteria, but these members are not elected via SNX token governance due to concerns over safety for the individual and for the protocol. However, the lack of transparency reduces their accountability to token holders and creates another potential attack vector on the protocol.

Specification

Deprecation of pDAO and Introduction of Risk Council The existing pDAO will be officially deprecated, and its responsibilities transferred to the Risk Council. However, the Risk Council’s role will be reduced in scope. While the pDAO’s role was to validate, stage and execute upgrades, the Risk Council will only have the power to validate that the staged transaction reflects the expected changes to the protocol. The CCs will stage upgrades, and upgrades will execute automatically after the Spartan Council votes in favor, once an upcoming governance upgrade comes live. Due to this separation of powers, the opportunity for coercion or collusion is strongly mitigated.

Risk Council Election

The Risk Council will consist of a configurable number of members (via SCCP), appointed by the Spartan Council for certain specialized and technical skill sets. In the case that the Risk Council is determined not to be acting in the interest of the protocol, the SC may unilaterally replace it.

Deployment Process

Once implemented, all deployments must be signed and executed by the majority of both the Risk Council and the Spartan Council.

Rationale

This change is crucial to ensure that Synthetix has a robust, transparent, and efficient governance model.

Test Cases

N/A

Implementation

Low-level implementation details are to be confirmed.

At a high level, a new governance contract will be deployed. This contract will be owned by two sets of NFTs: The Spartan Council NFT set and the Risk Council NFT set. These NFTs are distributed at the start of each governance epoch following the conclusion of the election process. This governance contract will accept transactions from any address holding a Risk Council NFT or a Spartan Council NFT. In order for a transaction to be confirmed, 2/3 of the Risk Council NFTs must sign it, and 5/8 of the Spartan Council NFTs must sign.

Copyright

Copyright and related rights waived via CC0.