[AIP-17] Change Aura Governance to Maximize Representation in Balancer DAO Votes

Proposals
1

Authors: SmallCap and Tritium

Abstract

Aura stakers (via vlAURA) are currently under-represented in Balancer governance due to low voter participation, even inclusive of the Aura veBAL delegate council. With an increasingly competitive governance outlook, Aura as a DAO risks having its views grossly under-represented as other entities use their full veBAL voting power and show up consistently to every proposal. This proposal seeks to change Aura’s governance model for Balancer Improvement Proposals (BIPs) to consistently promote Aura DAO’s views and to better account for the diverse views of all vlAURA governors.

Background

Aura DAO risks being under-represented with its current governance setup.

As it stands, vlAURA holders have their holdings mapped to underlying veBAL (e.g. if you own 1% of vlAURA, you can control 1% of veBAL owned by the Aura protocol). Votes need to be cast via Balancer’s Snapshot, and do not appear on Aura’s Snapshot. While this was implemented with goodwill by Aura’s contributors, this has led to subpar voter participation, and as a result, inefficiency and a disadvantage for the DAO due to unused veBAL.

Not all vlAURA holders show up to vote for BIPs. And the Aura veBAL delegate council, which was set up to solve this issue, still lacks widespread usage by all vlAURA holders since it remains an opt-in.

As this issue has come to light, other metagovernance protocols and veBAL holders have made the choice to direct voting power toward increasingly centralized entities. In one case, one metagovernance protocol delegated all of its veBAL voting power to one individual.

Aura currently exists in a disadvantaged state compared to these other protocols because the diverse group of vlAURA governors cannot vote in a bloc.

Delegating all of the DAO’s veBAL to one person and/or a council, made up by some sort of political wrangling, feels like a step away from decentralization. A council voted in by holders works in general scenarios, but there are edge cases where the council may represent the views of all vlAURA governors in one vote but not in the next.

Aura can instead create a Snapshot vote on its own page for every Balancer Snapshot vote. Further, vlAURA holders will be able to vote to direct 100% of all veBAL owned by Aura DAO via EIP-1271. This has the effect of allowing for greater decentralized decision making amongst vlAURA governors on a vote-by-vote basis, while ensuring that the DAO is using the full brunt of its governance power to advance the interests that the DAO collectively decides are important.

Terms

Should this proposal pass, Aura’s Snapshot will begin to display BIPs in line (so simultaneously, and without censorship) with Balancer’s Snapshot, similar to Convex’s governance implementation for Curve and Frax votes.

The outcome of the vote will then be binary: if a majority of active vlAURA votes “yea” on a proposal, all underlying veBAL owned by Aura will be used to vote “yea” via Balancer Snapshot. The vice-versa is also true. Via EIP-1271, the protocol multisig will be responsible for casting the votes. This should ideally be moved on chain in the future.

Abstain: Reflected Aura votes will contain an “abstain” option. This way Aura can avoid throwing it’s weight around into areas it has no interest, or wishes to take a neutral stance on.

Quorum requirements: To ensure adequate decentralization, votes on BIPs will only be valid if a total of 2,000,000 vlAURA vote either “yea” or “nay” on the proposal. This 2,000,000 vlAURA number represents over 20% of all circulating vlAURA as of this proposal’s writing. To note, 17% is the average vlAURA turnout to all historical Aura Improvement Proposals (AIPs).

Delegate Council: This proposal does interfere with the existing state of delegation in the Aura system, including the Aura Delegate Council. The Council will act as the only fallback voter if the BIPs that appear on the Aura Snapshot do not meet the aforementioned vlAURA quorum. If the Council somehow fails to come to a conclusion, no vote will be cast, though this is an unlikely scenario.

Knock-On Effect for Balancer: This proposal will slightly affect Balancer’s governance implementation. To avoid the veBAL from Aura being used twice, Balancer will need to update their Snapshot strategy to exclude the veBAL mapping pass-through as it exists today.

9 Likes
2

nice proposal gentleman. in full support! :saluting_face:

4 Likes
3

This is a great idea!

I liked how the current mechanism was represented as an “opt in” dynamic. Makes it easier to understand it.

Has the opposite been explored as well? Meaning, Aura’s veBAL is used entirely with votes in the same proportion as vlAURA voters signal with their votes. It behaves as an opt-out, cause a vlAURA holder will have to express abstain if she or he doesn’t want her/his share of veBAL to participate. This way, everybody’s opinion gets represented and all underlying veBAL is used.

Let me try to make this clearer with an example:

  • 1,400,000 vlAURA vote “yea”
  • 400,000 vlAURA vote “nay”
  • 200,000 vlAURA vote for abstain
  • Quorum is reached (2,000,000 vlAURA)
  • As a result, 100% of veBAL locked in Aura is used, 70% voting “yay” in Balancer snapshot, 20% voting “nay”, and 10% “abstain”.

If this is the same as what @SmallCapScience proposed, apologizes for my imperfect reading comprehension :laughing:. Hopefully my example will make it clear for others.

3 Likes
4

The idea is winner takes all.

So in the scenario above, the Quorum was reached and yeas have it. As a result, 100% of auras veBAL will vote yes on this governance topic. If a majority had voted Nay then aura would vote 100% nay, if a majority voted abstain, aura would not vote on that. If less than 2 million votes are cast, then the council would decide.

Is the point you are making that you would like the fact that abstain is listed as an option to be specifically available, or that those who wish to abstain should be able to do so regardless of the majority vote (abstain always abstains, and winner takes all but the abstainers). I get the idea here, but it seems complicated and I fear it will confuse people.

5 Likes
5

Hi @SmallCapScience

Great post!

Llama has created a Snapshot bot which posts the vote from other communities on the Index Coop’s Snapshot page enabling INDEX holders to vote on each respective proposal. For example, INDEX holders vote on an AAVE Snapshot vote and then the AAVE held within DPI votes in line with Index Coop’s Snapshot vote outcome. ie: INDEX holders vote on how DPI’s AAVE holding will vote.

We would be happy to create a bot for the Aura Community or share our directory to enable Aura to create the bot. Hopefully this reduces any lift associated with implementing this proposal. Please do drop me a DM if this is of interest.

2 Likes
6

Thanks for the follow-up question!

My point is to explore alternatives to winner takes all, as it can be considered suboptimal.
With current mechanics, a vlAURA holder can represent her/his preference by the exact amount of his vAURA share. Under a “winner takes all”, a vlAURA voters’ preference gets widely amplified if they voted as the majority did, or is discarded otherwise.

In my opinion, an ideal scenario is one where every voter’s preference is translated to Balancer’s governance, and there is full utilization of Aura’s veBAL. As I tried to communicate in my previous example, each vlAURA that doesn’t vote waives their share of veBAL to those that did vote proportionally.

Expanding on that example for completeness:

  • Let’s assume there is a total of 10,000,000 veBAL sitting in Aura Finance, and 20,000,000 vlAURA in total. Ratio then is 0.5 veBAL per vlAURA.
  • Because only 2,000,000 vlAURA voted, preference is only signaled for 1,000,000 veBAL: 700k would vote for “yea”, 200k for “nay” and 100k abstain.
  • There are 9,000,000 veBAL that have not signaled any preference. The preference of the vlAURA that did vote is hence extended to the 9,000,000 veBAL proportionally: 7,000,000 veBAL would vote for “yea”, 2,000,000 veBAL would vote for “nay”, and 1,000,000 veBAL would abstain.

All Aura’s veBAL get to vote, individual vlAURA’s preference is respected. Wouldn’t that be preferable? Or are there other things to optimize for?

Because I am not a technical person, I will trust if the educated opinion is that such a solution is way too complicated to implement.

3 Likes
8

I’m sorry I didn’t respond to this in my first post. Was on on the run.

The goal of this governance is to try to focus AURA’s veBAL might so that the DAO as a whole (has a /is the) significant influence in the Balance Wars. The war is most certainly still afoot, and if the DAO splits its votes then basically they are canceling each other out. Around us veBAL governance is concentrating with either one or a very small group of people making the decisions. Even voting in unison, all of auraBAL is not the largest voting bloc.

I think what you propose makes a lot of sense if/when AURA gets to the point where it it’s starting to have a controlling stake (40% of veBAL). Right now it’s a fight for relevance and a seat at the table frankly. We’re doing good so far, but it starts to be more important that AURA can exercise influence on non-economic veBAL voting in my opinion, hence why I authored this proposal with @SmallCapScience.

Does that make sense? Is there a reason you strongly feel it’s important to split the vote?

5 Likes
9

I like the plans regarding the use of the Aura delegate council as the fall back option for when quorum is not reached. This may happen more than we think but will also require the delegate council to respond quickly as most BIP are only 3-4 days in duration. This will likely mean the delegate council will need to shadow vote on all proposals so there is adequate time to collect their votes if quorum is not reached. There may be some other roles for the council to focus on in the coming weeks and months in addition to this fall back option.

I am also strongly in favour of the winner takes all system of voting. I think splitting it will simply dilute the voting power that Aura should be wielding in the Balancer ecosystem.

3 Likes
10

Thanks for that context @Tritium

I think the way you framed it makes total sense. I get this may be a first iteration that will help the Aura community in this current scenario before we can focus on other needs that, though may be important, are not as urgent.

Aligned 100% with this proposal :saluting_face:

5 Likes
11

Fantastic proposal, and I’m 100% in favor of the winner-take-all approach. It’s critical that we exercise our full voting power in these formative stages of the Balance Wars.

1 Like
12

Great explanation. I agree this makes a ton of sense at this moment. The goal here is to achieve more cohesive voting in favor of the Aura protocol and community as a whole. I think this is a great step towards accomplishing that goal. If it outgrows its benefit or becomes some manifestation of centralization creep, then governance can always vote to scrap it. It also provides some additional reason for community members to vote lock their Aura to ensure they have a say in governance.

2 Likes
13

Great work contributors, you have my vote :writing_hand:

1 Like
14

I am in Full support 100% of this proposal, really a thoughtful one. It’s about time.

1 Like
15

For wallets that currently are participating directly in balancer snapshots with their vlAURA. Is this proposal removing their ability to do so entirely?

In other words is the wallet losing it’s current rights to directly participate in balancer snapshot votes by being moved to it’s votes being used based solely on the outcome of an Aura vote?

Thanks

16

I am entirely in favour of this proposal. I think it’s a timely step to take to ensure Aura is represented properly.

17

Correct. vlAURA will no longer vote direclty on balancer snapshots. Instead, these wallets will be able to vote on an Aura snapshot, and then the result of that snapshot will be used to vote with all of AURA’s veBAL for the winning option.

Does that answer your question?

18

Yes, I’m not sure why winner take all approach is the answer for users/wallets but I understand it from Aura wanting to consolidate power/influence.

Last I checked Aura delegate council had been voting with roughly 1m veBAL votes already. How many more does this new approach cede to Aura?

My smol direct participation with my vlAURA via Balancer snapshot is inconsequential but I vote how I liked. With this proposal my votes are whatever the majority of vlAURA votes for. I’m not a fan of removing the voting rights already bestowed upon folks personally.

1 Like
19

You have a valid point. I think this proposal, if adopted, should be monitored and ofc subject to roll back if we see centralization creep, proof that it is no longer a viable solution, or other similar issues arise. I also prefer this approach to the current delegate model, which IMO is ripe for even more possible centralization creep.

1 Like
20

Is no one concerned of a 51% attack to take control over all vlAURA balancer vote? This sounds cheaper than someone(s) going to purchase all the veBAL on their own.

Or perhaps someone’s already done the math and ruled out this possiblity?

Thx

21

I personally like this proposal. As a member of the Badger Council I will lobby the community and Council to support this.

1 Like