Proposed Update to Charter - Journey towards Multisig for Payments

Over the previous months we have seen increasing confusion to make payments and operate the technology of the DAO within the constraints of the Charter. The main issue is the feedback loop for technical issues that we are facing such as with USDC payments. The members who have been waiting for USDC have been kind to us so far and their patience has not gone unnoticed but it is an untenable situation that needs to be solved ASAP as the number of payments increase.

The core portion of this is I would like to propose that for payments we use a Multisig. There are a number of reasons for this.

  1. Speed Up the Feedback Loop on technical errors
  2. Payments that have been approved should need not need to wait seven days to be paid out

There are then two options identified for spinning up a multisig for payments in the current structure.

Option 1

  1. transition the Executive Sub-DAO a multisig with the ability to make payments. One of the core pieces of feedback we have received is that it is complex and unclear how payments are currently being made to contributors.

For this to pass I would propose increasing the membership from 3 to 7 and building a multisig which would have the responsibility of approving financial proposals and spinning out workstreams that support the network, it would also be able to approve grants for the DAO (4 out of 7 signer wallet). I would propose merging the ops proposal together with this to make one larger workstream:Core DAO Operations - Funding proposal
This would operate efficiently at first but may need to be spun out into separate work streams down the line. In the MVP form of the DAO, separation of these functions is probably a hindrance to the DAO becoming an efficient entity.

Option 2

Option 2) Remove the responsibility of Payments from the Executive Sub DAO to a Ops multisig which has the sole purpose of making payments. The Executive Sub DAO can then focus their time on more valuable endeavours such as grants. This Ops multisig would then simply be acting as the escrow account for the DAO and make payments.

Both of these will benefit the whole DAO as we will have the ability to make payments quickly. To be clear the use of a Multisig does not solve all the challenges such as complex batch payments.

Multisig Rules

Included in this change/ transition to a multisig in both options there should be rules around the signers including:

  • All transactions must be signed within 1 week
  • All transactions must be signed (can be abstain)
  • If three transactions are missed without a valid reason, signer is removed and replaced with an appropriate member

To help make this change, I would like to propose that the responsibilities and technical structure that the sub-DAOs currently operate in be removed from the charter and referenced as a IPFS document or reduce the quorum required to make changes to this section. Rational for this is the AN DAO needs to be flexible and responsibilities need to be able to be updated and spin out new sub-daos as a result changes would only need a simple majority and not the 0.5% that is currently required for charter changes.

At the same time we would like to update the Sub-DAOs responsibilities to make it clear what their roles are within the DAO and remove the ambiguity.

This is a large topic, as such would appreciate it if we can keep feedback on this to the use of Multisigs, the options proposed (any other options) and other ways in which speed and efficiency could be improved.

Thanks,

Alex

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Thanks for the proposal @AlexClay. Fixing payments and making sure that people who commit their time to the Aragon project get paid fairly and on-time is of the upmost importance.

Asking a few clarifying questions on your proposal below:

  1. Is it your understanding that Option 1 requires a change in the AN DAO Charter? Or is it merely an ANT holder vote to vote on a change in how the ESD makes payments?

Given that changes to the AN DAO charter require 0.5% of ANT supply coupled with the urgency with which we switch to a more efficient payment method, I would suggest also including a separate proposal that seeks to amend how the ESD makes payments (ie transition to a multisig). This is possible given the following charter paragraph “Sub-DAOs are not allowed to create additional treasuries under the exclusive control of the Sub-DAO (and outside of the control of the Main DAO) unless approved by a majority vote of ANT Holders”.

  1. What’s the rationale for increasing the number of signers from 3 to 7? If we’re talking about payments only and not grants, do we really need 7 people to review and sign?

  2. Have you considered adding different thresholds for the number of signatures relative to payment transaction size?

  3. Why do the signer rules apply to Option 2 but not Option 1? Imo, it would be beneficial to apply them in both options.

  4. What multisig tool is being proposed?

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Thank you for the comments @joeycharlesworth

  1. Can be a vote on changing how payments are being made. I anticipate a charter change will be needed from a responsibility perspective, or increasing the signers.

  2. In option 1 the function of the ESD remains the same so they would still have the function of grants

  3. This function may be available but aiming to remove technical restrictions on payments therefore using a custom multisig is not a preferable option

  4. Rules apply to both options thanks for clarifying.

  5. I would anticipate a gnosis safe as it is the most widely used multisig

Full support for the use of multi-sig to make contributor payments easier. In my reading of the Charter and in discussion with compliance committee members, there is nothing currently in the Charter to prevent the use of multi-sig.

  1. Governance Proposal Process S 5 (f) i 3 (a)

a. By default, all Financial Proposals involving a deliverable should use an Escrow (see Additional Definitions). In cases where the use of an Escrow is omitted, a justification must be included in the Description.

Escrow: a contractual arrangement in which a third party (the stakeholder or escrow agent) receives and disburses money or property for the primary transacting parties, with the disbursement dependent on conditions agreed to by the transacting parties.

The DAO Ops proposal was approved for use of payment with 3/4 multi-sig. The ESD funding proposal was not.

My understanding of the ESD Q1 budget is that we are close to end of funding avaiable given the projects in pipeline and so I would suggest it’s time we report on funding to date and submit a second Financial Proposal to secure additional budget and formalise by Voice vote use of the existing multi-sig by “expanding the Op multi-sig to 5/7 signers” to then include the ESD members.

The number of proposed changes to the Charter included here imo tend to confuse the urgent need for a multi-sig. to disperse approved, contributor rewards.

Option 1 Charter Changes:

This is an undertaking that requires significant changes to the charter 6 Sub-DAO Agreements S 1 (a) b Membership. I’m not opposed to additional members although I would think five is large at this point in the DAO.

Option 2 Charter Changes

Suggesting the use of a multi-sig makes sense. But again this could operate as 5/7 signers without changes to the Charter if voted for in a second ESD Funding Proposal.

Additional Charter Changes

If we are to update the Sub-DAOs responsibilities to make it clear what their roles are within the DAO and remove the ambiguity, I’m not sure why these should be removed from the Charter. At this stage I’m not in favour of reducing the quorum further, it’s been low enough to pass votes to date, I’m not sure I understand the reasoning here.

The above proposed changes to the Charter are well worth community discussion and imo it would be significantly easier to discuss and pass changes to the Charter by creating separate proposals (step changes) that specify the exact text to be changed and the proposed alterations.

I would suggest the first thing we do as @eaglelex mentioned is a vote on separating the combined documents so that changes to the Charter is a discussion of the legalese rather than the Manifesto or Community Guidelines, which can be read in conjunction but need not be part of a legally binding document. Then we need to format the Charter (alphanumeric referencing) to better communicate what is there and then begin discussing proposed changes.

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I think I agree with you on the change to a multisig not needing a complete change to the charter, there are other points the I think still need updated to improve speed such as the tools. I am happy with you suggestion here to add this in to the next funding proposal which I imagine will come at the end of this month to have the 5/7 multisig for payments. We can also take an optimistic approach to this as well.

Idea was to just reduce the quorum for the responsibilities and tools not the whole doc as flexibility when updating the quorum

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@AlexClay Thank you very much for the proposal. The problem exists and it needs to be solved. It is not only a problem for the people that wait for the payments, but also for the members of the Exec Sub DAO who are struggeling and loosing time due to the complexity of the payment system, which does not seem apt for recurring payments.

This provision of the Charter seems the key:

i. Sub-DAOs are not allowed to create additional treasuries under the exclusive control of the Sub-DAO (and outside of the control of the Main DAO) unless approved by a majority vote of ANT Holders.
ii. The Main DAO may create additional treasuries through a majority vote of ANT Holders.

In my opinion, in paragraph i. “outside the control of the Main DAO” is unclear. What would happen if the Main DAO would delegate an enlarged formation as Exec Sub-DAO + 4 other selected members to be part of a multisig for managing operations? Would this be “outside the control of the Main DAO”? I don’t think so. In my opinion we could follow your option 2 without amending the charter. 4/7 is important because it excludes the exclusive control of the 3 members of the Exec Sub-DAO (in order not to infringe the Charter).

This does not mean that I think that the charter should not be changed. Nevertheless, I would suggest to try to a) solve practical problems through interpretation where possible; b) preparing a reform of the charter and request one single focused vote to the community for implementing the new provisions.

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Thank you for the clarification here @eaglelex is is very helpful to have the compliance committee to ensure we are acting within the Charter. For the similar reason as you indicated

I have requested 5/7 signers so that ESD funded transaction cannot be signed without a least one Executive Sub DAO member, as we have an obligation under the Charter S 6 (2) a i 2 (c) to assess the deliverables before payment.

Thanks for all your work on this @AlexClay

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