This is a temperature check to gauge the DAO's overall opinion on creating official conflict of interest and self-voting policies. No social contract, guidelines, or policy will be adopted directly from the result of this vote.
Please find the full proposal on the forums, certain sections such as Enforcement and Timeline have been removed to adhere to character limits: https://forum.arbitrum.foundation/t/should-the-dao-create-coi-self-voting-policies/26062
This proposal aims to restart the conversation around the creation of self-voting and conflict of interests policies. The proposal outlines various options, ranging from maintaining the status quo to enforcing strict self-voting policies. A Snapshot vote to gauge the DAO's sentiment will be posted on Thursday, August 15th. Please note, this is an actual temperature check, just to gauge the DAO’s opinion on the subject. Based on the results, certain policies may be included in a future delegate of code of conduct as part of an effort to professionalize the DAO’s operations.
Strict policies regarding conflicts of interest (COI) and self-dealing are standard practices in traditional corporate industries. However, with crypto just now emerging from an early stage, entirely avoiding conflict of interests is challenging. Many individuals are either investors, employees, or contributors across multiple companies/protocols on not only Arbitrum, but other L1/L2 chains.
Several other DAOs have established a code of conduct in an attempt to address these issues. Examples range from being opt-in recommendations (Uniswap), simple pledges (Maker, Gitcoin, Aave), and strict no self-dealing policies & expectations enforced by a council and violations resulting in suspension from the DAO’s platforms (Optimism: Code of Conduct Committee, Optimist Expectations).
While Arbitrum has standard rules of engagement for the forums, it currently lacks a delegate code of conduct in addition to an official policy on conflicts of interest. The only mention of the term in the Arbitrum Constitution is in relation to candidate eligibility for the Security Council.
Creating a self-voting policy was first raised by @Immutablelawyer at the beginning of 2024 following the LTIPP council elections. While the post resulted in a good discussion, many delegates at the time indicated a strong preference to not move forward with any policy that restricted a delegate’s ability to vote. Thus a temperature check to gather the larger DAO’s sentiment on this issue never occurred.
In recent weeks, the topic has reemerged in conversations, and as part of a series of proposals focusing on professionalizing the Arbitrum DAO’s operations, Entropy Advisors is looking to restart the conversation on a proposed self-voting and COI policy in order to reach a definite consensus. Policies that are voted are favored by the DAO will be included in a future delegate code of conduct proposal.
We would argue that within a DAO’s operations, the majority of instances involving COI are the result of an individual/company using their delegated voting power to engage in self-voting or “self-enrichment”. This can exist when a delegate votes for themselves to get elected to a committee, thereby receiving financial gain, or a delegate votes in favor of a proposal that directly benefits themselves or their company. There are certainly other situations where COI can arise such as oversight, but for the purposes of this proposal, the focus is centered on the practice of self-voting.
For clarity and the purposes of this conversation we will lean on the definitions that @Immutablelawyer established back when the topic of self-voting was previously discussed.
As mentioned above, the majority of comments indicated that it was unwise to restrict a delegate’s ability to vote in any manner. To paraphrase the discussion, hesitation to implement a self-voting policy boiled down to primarily two reasons:
While both are strong objections, there are positives to implementing COI and self-voting policies. First, they help establish the “rules of the game”, so that every participant in Arbitrum governance is operating under the same set of expectations. Furthermore, disclosure requirements can help lead to greater transparency while also incentivizing participants to act in an ethical manner. Most importantly, with such policies standard practice in other industries, Arbitrum DAO can improve its image as a professional organization by holding its actors to similar standards.
Below are a few policy options the DAO can adopt to help address and mitigate COI and self-voting. The options are presented from least restrictive (do nothing) to what we view as the most restrictive.
Keep the Status Quo: Arbitrum DAO can continue to operate as it has been. A delegate code of conduct does not need to include specific policies on disclosure or self-voting.
Disclosure and Transparency Policy: If a potential COI exists, it is expected that proposal authors or delegates disclose the nature and extent of the interest. While it may not always be clear if an individual stands to gain “directly” or “indirectly”, it is recommended to lean on the side of over-communication in the name of transparency. Delegates are not expected to abstain or alter their voting preferences in any way, but are free to choose to abstain.
“Responsible Voting” Policy in Elections: In an election with multiple seats, candidates may vote for themselves as long as they also cast votes to fill the remaining positions. Put more simply, a candidate should not cast a vote solely for themselves in an election. In the case of a weighted voting election, the candidate's weight for themself should not be larger than the weights for other candidate. To the best of their ability they should strive to make the weights as equal as possible among the number of candidates necessary to fill each position.
This is a policy that has worked well in other DAOs and helps address the natural incentive to withhold votes for competing candidates in an election while also making sure token-holders are not disenfranchised.
Credit to @JoJo for the term “Responsible Voting”.
Strict Self-Voting Policy: In the event of a conflict of interest, under the simple definitions stated in the Rationale above, it is expected that a delegate or proposal author abstains during the voting process. In the event that "Abstain" is not presented as a voting option, it is expected that the delegate votes in a neutral manner as to not impact the results of the vote. For example, in an election a delegate may even divide their voting power in equal weight to effectively abstain. This policy would include candidates being prevented from self-voting in elections and delegates from voting on proposals that directly benefit oneself, company, or interests.
The temperature check on Snapshot will use approval voting. Each delegate can select any number of choices, each selected choice will receive equal voting power. So for example, if a delegate wishes to see the DAO adopt both a disclosure policy and responsible voting, then they should select both options on the Snapshot vote.
Since this is a proposal that changes the DAO’s current status quo, the following choices have been worded in a manner that each “FOR” vote indicates desire to adopt a certain policy.
This is a temperature check to gauge the DAO's overall opinion on creating official conflict of interest and self-voting policies. No social contract, guidelines, or policy will be adopted directly from the result of this vote.
Please find the full proposal on the forums, certain sections such as Enforcement and Timeline have been removed to adhere to character limits: https://forum.arbitrum.foundation/t/should-the-dao-create-coi-self-voting-policies/26062
This proposal aims to restart the conversation around the creation of self-voting and conflict of interests policies. The proposal outlines various options, ranging from maintaining the status quo to enforcing strict self-voting policies. A Snapshot vote to gauge the DAO's sentiment will be posted on Thursday, August 15th. Please note, this is an actual temperature check, just to gauge the DAO’s opinion on the subject. Based on the results, certain policies may be included in a future delegate of code of conduct as part of an effort to professionalize the DAO’s operations.
Strict policies regarding conflicts of interest (COI) and self-dealing are standard practices in traditional corporate industries. However, with crypto just now emerging from an early stage, entirely avoiding conflict of interests is challenging. Many individuals are either investors, employees, or contributors across multiple companies/protocols on not only Arbitrum, but other L1/L2 chains.
Several other DAOs have established a code of conduct in an attempt to address these issues. Examples range from being opt-in recommendations (Uniswap), simple pledges (Maker, Gitcoin, Aave), and strict no self-dealing policies & expectations enforced by a council and violations resulting in suspension from the DAO’s platforms (Optimism: Code of Conduct Committee, Optimist Expectations).
While Arbitrum has standard rules of engagement for the forums, it currently lacks a delegate code of conduct in addition to an official policy on conflicts of interest. The only mention of the term in the Arbitrum Constitution is in relation to candidate eligibility for the Security Council.
Creating a self-voting policy was first raised by @Immutablelawyer at the beginning of 2024 following the LTIPP council elections. While the post resulted in a good discussion, many delegates at the time indicated a strong preference to not move forward with any policy that restricted a delegate’s ability to vote. Thus a temperature check to gather the larger DAO’s sentiment on this issue never occurred.
In recent weeks, the topic has reemerged in conversations, and as part of a series of proposals focusing on professionalizing the Arbitrum DAO’s operations, Entropy Advisors is looking to restart the conversation on a proposed self-voting and COI policy in order to reach a definite consensus. Policies that are voted are favored by the DAO will be included in a future delegate code of conduct proposal.
We would argue that within a DAO’s operations, the majority of instances involving COI are the result of an individual/company using their delegated voting power to engage in self-voting or “self-enrichment”. This can exist when a delegate votes for themselves to get elected to a committee, thereby receiving financial gain, or a delegate votes in favor of a proposal that directly benefits themselves or their company. There are certainly other situations where COI can arise such as oversight, but for the purposes of this proposal, the focus is centered on the practice of self-voting.
For clarity and the purposes of this conversation we will lean on the definitions that @Immutablelawyer established back when the topic of self-voting was previously discussed.
As mentioned above, the majority of comments indicated that it was unwise to restrict a delegate’s ability to vote in any manner. To paraphrase the discussion, hesitation to implement a self-voting policy boiled down to primarily two reasons:
While both are strong objections, there are positives to implementing COI and self-voting policies. First, they help establish the “rules of the game”, so that every participant in Arbitrum governance is operating under the same set of expectations. Furthermore, disclosure requirements can help lead to greater transparency while also incentivizing participants to act in an ethical manner. Most importantly, with such policies standard practice in other industries, Arbitrum DAO can improve its image as a professional organization by holding its actors to similar standards.
Below are a few policy options the DAO can adopt to help address and mitigate COI and self-voting. The options are presented from least restrictive (do nothing) to what we view as the most restrictive.
Keep the Status Quo: Arbitrum DAO can continue to operate as it has been. A delegate code of conduct does not need to include specific policies on disclosure or self-voting.
Disclosure and Transparency Policy: If a potential COI exists, it is expected that proposal authors or delegates disclose the nature and extent of the interest. While it may not always be clear if an individual stands to gain “directly” or “indirectly”, it is recommended to lean on the side of over-communication in the name of transparency. Delegates are not expected to abstain or alter their voting preferences in any way, but are free to choose to abstain.
“Responsible Voting” Policy in Elections: In an election with multiple seats, candidates may vote for themselves as long as they also cast votes to fill the remaining positions. Put more simply, a candidate should not cast a vote solely for themselves in an election. In the case of a weighted voting election, the candidate's weight for themself should not be larger than the weights for other candidate. To the best of their ability they should strive to make the weights as equal as possible among the number of candidates necessary to fill each position.
This is a policy that has worked well in other DAOs and helps address the natural incentive to withhold votes for competing candidates in an election while also making sure token-holders are not disenfranchised.
Credit to @JoJo for the term “Responsible Voting”.
Strict Self-Voting Policy: In the event of a conflict of interest, under the simple definitions stated in the Rationale above, it is expected that a delegate or proposal author abstains during the voting process. In the event that "Abstain" is not presented as a voting option, it is expected that the delegate votes in a neutral manner as to not impact the results of the vote. For example, in an election a delegate may even divide their voting power in equal weight to effectively abstain. This policy would include candidates being prevented from self-voting in elections and delegates from voting on proposals that directly benefit oneself, company, or interests.
The temperature check on Snapshot will use approval voting. Each delegate can select any number of choices, each selected choice will receive equal voting power. So for example, if a delegate wishes to see the DAO adopt both a disclosure policy and responsible voting, then they should select both options on the Snapshot vote.
Since this is a proposal that changes the DAO’s current status quo, the following choices have been worded in a manner that each “FOR” vote indicates desire to adopt a certain policy.
https://forum.arbitrum.foundation/t/should-the-dao-create-coi-self-voting-policies/26062/35
https://forum.arbitrum.foundation/t/should-the-dao-create-coi-self-voting-policies/26062/35
https://forum.arbitrum.foundation/t/should-the-dao-create-coi-self-voting-policies/26062/33?u=mcfly
https://forum.arbitrum.foundation/t/should-the-dao-create-coi-self-voting-policies/26062/32?u=tane
https://forum.arbitrum.foundation/t/should-the-dao-create-coi-self-voting-policies/26062/31
https://bit.ly/3AA8wAK
https://forum.arbitrum.foundation/t/should-the-dao-create-coi-self-voting-policies/26062/30?u=ocandocrypto
https://forum.arbitrum.foundation/t/seed-latam-delegate-communication-thread/13895/46?u=seedgov
https://forum.arbitrum.foundation/t/should-the-dao-create-coi-self-voting-policies/26062/25?u=bruce
https://forum.arbitrum.foundation/t/should-the-dao-create-coi-self-voting-policies/26062/21?u=tekr0x.eth
https://forum.arbitrum.foundation/t/should-the-dao-create-coi-self-voting-policies/26062/19?u=larva
https://forum.arbitrum.foundation/t/should-the-dao-create-coi-self-voting-policies/26062/18?u=blockworksresearch
https://bit.ly/3AunTuB
https://forum.arbitrum.foundation/t/should-the-dao-create-coi-self-voting-policies/26062/15?u=jojo
https://forum.arbitrum.foundation/t/should-the-dao-create-coi-self-voting-policies/26062/14?u=0x_ultra
Agreed, through this strategy to enhance the network infrastructure and ensure its continued growth and stability
https://forum.arbitrum.foundation/t/should-the-dao-create-coi-self-voting-policies/26062/13?u=0xdonpepe
https://forum.arbitrum.foundation/t/gfx-labs-delegate-communication-thread/13794
For all 3 PLEASE! It's critical. https://forum.arbitrum.foundation/t/should-the-dao-create-coi-self-voting-policies/26062/8?u=griff
https://forum.arbitrum.foundation/t/should-the-dao-create-coi-self-voting-policies/26062/11?u=ezr3al
https://forum.arbitrum.foundation/t/should-the-dao-create-coi-self-voting-policies/26062/33?u=mcfly
https://forum.arbitrum.foundation/t/should-the-dao-create-coi-self-voting-policies/26062/32?u=tane
https://forum.arbitrum.foundation/t/should-the-dao-create-coi-self-voting-policies/26062/31
https://bit.ly/3AA8wAK
https://forum.arbitrum.foundation/t/should-the-dao-create-coi-self-voting-policies/26062/30?u=ocandocrypto
https://forum.arbitrum.foundation/t/seed-latam-delegate-communication-thread/13895/46?u=seedgov
https://forum.arbitrum.foundation/t/should-the-dao-create-coi-self-voting-policies/26062/25?u=bruce
https://forum.arbitrum.foundation/t/should-the-dao-create-coi-self-voting-policies/26062/21?u=tekr0x.eth
https://forum.arbitrum.foundation/t/should-the-dao-create-coi-self-voting-policies/26062/19?u=larva
https://forum.arbitrum.foundation/t/should-the-dao-create-coi-self-voting-policies/26062/18?u=blockworksresearch
https://bit.ly/3AunTuB
https://forum.arbitrum.foundation/t/should-the-dao-create-coi-self-voting-policies/26062/15?u=jojo
https://forum.arbitrum.foundation/t/should-the-dao-create-coi-self-voting-policies/26062/14?u=0x_ultra
Agreed, through this strategy to enhance the network infrastructure and ensure its continued growth and stability
https://forum.arbitrum.foundation/t/should-the-dao-create-coi-self-voting-policies/26062/13?u=0xdonpepe
https://forum.arbitrum.foundation/t/gfx-labs-delegate-communication-thread/13794
For all 3 PLEASE! It's critical. https://forum.arbitrum.foundation/t/should-the-dao-create-coi-self-voting-policies/26062/8?u=griff
https://forum.arbitrum.foundation/t/should-the-dao-create-coi-self-voting-policies/26062/11?u=ezr3al
The results are in for the Should the DAO Create COI & Self Voting Policies? off-chain proposal.
See how the community voted and more Arbitrum stats: https://dhive.io/proposal/836
The results are in for the Should the DAO Create COI & Self Voting Policies? off-chain proposal.
See how the community voted and more Arbitrum stats: https://dhive.io/proposal/836
The temperature check for COI and self-voting policies concluded last Thursday with a total of ~153.1m VP casted and the following results:
With this being an approval vote, delegates were able to select multiple options. Both the Disclosure Policy and Responsible Voting Policy achieved greater than 50% support.
The temperature check for COI and self-voting policies concluded last Thursday with a total of ~153.1m VP casted and the following results:
With this being an approval vote, delegates were able to select multiple options. Both the Disclosure Policy and Responsible Voting Policy achieved greater than 50% support.
As a reminder, the purpose of this proposal was to gather sentiment; therefore, no policy is being implemented as a result of this vote. Our team is actively working on a larger delegate code of conduct which we’re aiming to have ready by mid-September. The results from this sentiment check and opinions expressed in this forum thread will be taken into account. In the proposal we will seek to refine the wording/language surrounding COI, the term “close associate”, and responsible voting, as well as outlining a process for handling breaches.
gm all I voted to support the Disclosure Policy, and Responsible Voting Policy
as I believe they are reasonable for the type of organization we want to create. This is the first step towards more transparency and accountability in the system.
As ITU Blockchain delegation team, we believe Disclosure & Transparency and Responsible Voting are critical for maintaining DAO integrity and fairness.
The absence of a formal policy on self-voting and conflicts of interest poses significant risks, particularly when delegates can vote in ways that benefit themselves or their affiliated companies. We have advocated for these policies to ensure that the DAO operates transparently and professionally. Despite the challenges of implementing these policies, they are essential for its long-term health. To be accountable, delegates must openly disclose their conflicts of interest while still participating in voting. While self-voting is allowed, Responsible Voting must be balanced by voting for other candidates, reducing the risk of biased decisions.
As ITU Blockchain delegation team, we believe Disclosure & Transparency and Responsible Voting are critical for maintaining DAO integrity and fairness.
The absence of a formal policy on self-voting and conflicts of interest poses significant risks, particularly when delegates can vote in ways that benefit themselves or their affiliated companies. We have advocated for these policies to ensure that the DAO operates transparently and professionally. Despite the challenges of implementing these policies, they are essential for its long-term health. To be accountable, delegates must openly disclose their conflicts of interest while still participating in voting. While self-voting is allowed, Responsible Voting must be balanced by voting for other candidates, reducing the risk of biased decisions.
For these reasons, we chose the two options stated that will foster an equitable, transparent, and successful environment for the DAO.
Below are the reflections of the UADP:
Instituting policies surrounding COI and self-voting is very important. We therefore voted for incorporating the Responsible Voting Policy so that delegates cannot outright vote themselves into particular positions in an unfavorable manner. Every DAO with committees and programs where managers are elected should have a socially-unified system where individuals are held liable for their decisions, even if there isn’t a precise legally enforceable mechanism present.
Voted for:
Disclosure and Responsible Voting.
The DAO's model is strange and I don't have many real world examples of how to best manage this. The delegations given to delegates afford them a power that you typically wouldn't have during election type environments. Corporations don't usually have this model.
Voted for:
Disclosure and Responsible Voting.
The DAO's model is strange and I don't have many real world examples of how to best manage this. The delegations given to delegates afford them a power that you typically wouldn't have during election type environments. Corporations don't usually have this model.
My votes were purely in theory that if you disclose conflicts and ask for behavior that at least serves to partially mitigate self voting issues, it's a step in the right direction.
DAOplomated voted in favor of creating a strict self-voting policy.
Creating COI and self-voting policies brings more structure to the DAO so we were glad to see this. We were in favor of a strict self-voting policy as we believe delegates should abstain from voting in favor of proposals they have a direct attachment to/proposals that directly benefit them.
The temperature check for COI and self-voting policies concluded last Thursday with a total of ~153.1m VP casted and the following results:
With this being an approval vote, delegates were able to select multiple options. Both the Disclosure Policy and Responsible Voting Policy achieved greater than 50% support.
The temperature check for COI and self-voting policies concluded last Thursday with a total of ~153.1m VP casted and the following results:
With this being an approval vote, delegates were able to select multiple options. Both the Disclosure Policy and Responsible Voting Policy achieved greater than 50% support.
As a reminder, the purpose of this proposal was to gather sentiment; therefore, no policy is being implemented as a result of this vote. Our team is actively working on a larger delegate code of conduct which we’re aiming to have ready by mid-September. The results from this sentiment check and opinions expressed in this forum thread will be taken into account. In the proposal we will seek to refine the wording/language surrounding COI, the term “close associate”, and responsible voting, as well as outlining a process for handling breaches.
gm all I voted to support the Disclosure Policy, and Responsible Voting Policy
as I believe they are reasonable for the type of organization we want to create. This is the first step towards more transparency and accountability in the system.
As ITU Blockchain delegation team, we believe Disclosure & Transparency and Responsible Voting are critical for maintaining DAO integrity and fairness.
The absence of a formal policy on self-voting and conflicts of interest poses significant risks, particularly when delegates can vote in ways that benefit themselves or their affiliated companies. We have advocated for these policies to ensure that the DAO operates transparently and professionally. Despite the challenges of implementing these policies, they are essential for its long-term health. To be accountable, delegates must openly disclose their conflicts of interest while still participating in voting. While self-voting is allowed, Responsible Voting must be balanced by voting for other candidates, reducing the risk of biased decisions.
As ITU Blockchain delegation team, we believe Disclosure & Transparency and Responsible Voting are critical for maintaining DAO integrity and fairness.
The absence of a formal policy on self-voting and conflicts of interest poses significant risks, particularly when delegates can vote in ways that benefit themselves or their affiliated companies. We have advocated for these policies to ensure that the DAO operates transparently and professionally. Despite the challenges of implementing these policies, they are essential for its long-term health. To be accountable, delegates must openly disclose their conflicts of interest while still participating in voting. While self-voting is allowed, Responsible Voting must be balanced by voting for other candidates, reducing the risk of biased decisions.
For these reasons, we chose the two options stated that will foster an equitable, transparent, and successful environment for the DAO.
Below are the reflections of the UADP:
Instituting policies surrounding COI and self-voting is very important. We therefore voted for incorporating the Responsible Voting Policy so that delegates cannot outright vote themselves into particular positions in an unfavorable manner. Every DAO with committees and programs where managers are elected should have a socially-unified system where individuals are held liable for their decisions, even if there isn’t a precise legally enforceable mechanism present.
Voted for:
Disclosure and Responsible Voting.
The DAO's model is strange and I don't have many real world examples of how to best manage this. The delegations given to delegates afford them a power that you typically wouldn't have during election type environments. Corporations don't usually have this model.
Voted for:
Disclosure and Responsible Voting.
The DAO's model is strange and I don't have many real world examples of how to best manage this. The delegations given to delegates afford them a power that you typically wouldn't have during election type environments. Corporations don't usually have this model.
My votes were purely in theory that if you disclose conflicts and ask for behavior that at least serves to partially mitigate self voting issues, it's a step in the right direction.
DAOplomated voted in favor of creating a strict self-voting policy.
Creating COI and self-voting policies brings more structure to the DAO so we were glad to see this. We were in favor of a strict self-voting policy as we believe delegates should abstain from voting in favor of proposals they have a direct attachment to/proposals that directly benefit them.
We are voting FOR Disclosure and Transparency Policy brought forward as a first step towards a comprehensive COI and self-voting policy.
We believe that what matters is incentivizing delegates to vote for the best proposals and applications and not on the least optimal due to COI.
We are voting FOR Disclosure and Transparency Policy brought forward as a first step towards a comprehensive COI and self-voting policy.
We believe that what matters is incentivizing delegates to vote for the best proposals and applications and not on the least optimal due to COI.
Starting with a disclosure policy is a first step towards enforcing similar best standard practices in other industries and upholding Arbitrum delegates to a higher standard.
The following reflects the views of L2BEAT’s governance team, composed of @krst and @Sinkas, and it’s based on the combined research, fact-checking, and ideation of the two.
We have voted FOR the proposal and have opted for a Disclosure Policy and Responsible Voting.
The following reflects the views of L2BEAT’s governance team, composed of @krst and @Sinkas, and it’s based on the combined research, fact-checking, and ideation of the two.
We have voted FOR the proposal and have opted for a Disclosure Policy and Responsible Voting.
We feel that having clear rules will be helpful because everyone can be on the same page regarding expected behavior. In addition, having a voted policy will help us manage potential conflicts in the future, should they arise.
Having said that, we’d like to note that in our opinion establishing clear, concise, and strict rules of conduct is very challenging, especially if they’re supposed to be self-declarative and there’s no straightforward way to enforce them.
We think the most important thing is to work on creating a culture of transparency by default, acting in the best interest of the ecosystem, and avoiding any direct self-dealing situations. Just being a good player in the space. We hope that the codification of these principles will also help in understanding what it means in practice.
We would also like to point out that such a policy cannot be set in stone, it needs to be an actively maintained document and we should state who is responsible for its maintenance. It might be also helpful to clearly define who should serve as an arbiter in case of conflicting interpretation of these policies in concrete particular cases. Arbitrum Foundation seems like an obvious candidate for both roles, but we are open to exploring alternatives.
We vote FOR: Disclosure Policy and FOR: Responsible Voting Policy.
No doubt the DAO should implement a disclosure policy at least. On top of that, we believe the Responsible Voting Policy is best suited for the current DAO voting situation as we see it working well in the Optimism for some of its election votings. As Frisson said, ideally the DAO proposals should be passed even with abstains from delegates who have conflicts with them, but practically it's too early to implement Strict Self-Voting Policy especially for elections.
Voting to approve all three, as I believe the DAO needs to institute some type of uniform policy regarding COIs & Self-Voting Policies.
As the conversation evolves, I'm personally torn between the Responsible Voting Policy and the Strict Self-Voting Policy. I think for a lot of cases the Stricter policy would be best but I acknowledge there are some situations where voting for yourself isn't as harmful as others. Similar to shielded voting poll, it may be a good opportunity for a hybrid system depending on the type of vote. I'd have to think on it more...
Voting to approve all three, as I believe the DAO needs to institute some type of uniform policy regarding COIs & Self-Voting Policies.
As the conversation evolves, I'm personally torn between the Responsible Voting Policy and the Strict Self-Voting Policy. I think for a lot of cases the Stricter policy would be best but I acknowledge there are some situations where voting for yourself isn't as harmful as others. Similar to shielded voting poll, it may be a good opportunity for a hybrid system depending on the type of vote. I'd have to think on it more...
All said, at a minimum I believe some type of action needs to be taken. It would be a better look for the DAO then the current policy (or lack thereof).
I voted "For: Disclosure Policy."
To be honest, I’ve seen honest efforts in the past from some committees to disclose potential conflicts of interest and even abstain from voting when delegates or participants are directly involved.
While there may not be a strict manual to follow, I agree with implementing this policy to prevent future issues. It’s also a good practice for this organization.
After consideration, the @SEEDgov delegation has decided to vote “FOR: Responsible Voting Policy and FOR: Disclosure Policy” on this proposal at the Snapshot vote.
Thanks @Entropy for bringing this topic back into the discussion.
I voted FOR: Strict Self-Voting Policy. It's a standard practice is well-run organizations to avoid conflicts of interest. If a high-quality DAO proposal can't pass because there are too many conflicts, that means our delegate base isn't diverse enough.
Requiring large delegates to abstain from proposals they directly benefit from is a no brainer from a high level incentive design perspective.
We are voting FOR the "Disclosure Policy" because it offers a straightforward and effective approach to managing conflicts of interest within the DAO. Transparency is essential for maintaining trust, and this policy will help ensure that all potential conflicts are disclosed and addressed appropriately. We believe this is a crucial step in aligning the DAO's interests with those of its participants while preserving the integrity of the decision-making process.
"Strict Self-Voting Policy" is my favorite. This approach ensures that delegates or proposal authors abstain from voting in situations where they have a conflict of interest, thereby promoting transparency, fairness, and ethical behavior within the DAO. Adopting this policy will help to prevent any potential self-enrichment or bias, ultimately leading to more trustworthy governance.
I voted for Disclosure Policy, Responsible Voting policy. I believe this combo gives enough transparency and flexibility for us to act as a delegate (meaning we have "invested" VP) and to disclose any COI that may appear as a result of our other professional commitments.
We are voting FOR Disclosure and Transparency Policy brought forward as a first step towards a comprehensive COI and self-voting policy.
We believe that what matters is incentivizing delegates to vote for the best proposals and applications and not on the least optimal due to COI.
We are voting FOR Disclosure and Transparency Policy brought forward as a first step towards a comprehensive COI and self-voting policy.
We believe that what matters is incentivizing delegates to vote for the best proposals and applications and not on the least optimal due to COI.
Starting with a disclosure policy is a first step towards enforcing similar best standard practices in other industries and upholding Arbitrum delegates to a higher standard.
The following reflects the views of L2BEAT’s governance team, composed of @krst and @Sinkas, and it’s based on the combined research, fact-checking, and ideation of the two.
We have voted FOR the proposal and have opted for a Disclosure Policy and Responsible Voting.
The following reflects the views of L2BEAT’s governance team, composed of @krst and @Sinkas, and it’s based on the combined research, fact-checking, and ideation of the two.
We have voted FOR the proposal and have opted for a Disclosure Policy and Responsible Voting.
We feel that having clear rules will be helpful because everyone can be on the same page regarding expected behavior. In addition, having a voted policy will help us manage potential conflicts in the future, should they arise.
Having said that, we’d like to note that in our opinion establishing clear, concise, and strict rules of conduct is very challenging, especially if they’re supposed to be self-declarative and there’s no straightforward way to enforce them.
We think the most important thing is to work on creating a culture of transparency by default, acting in the best interest of the ecosystem, and avoiding any direct self-dealing situations. Just being a good player in the space. We hope that the codification of these principles will also help in understanding what it means in practice.
We would also like to point out that such a policy cannot be set in stone, it needs to be an actively maintained document and we should state who is responsible for its maintenance. It might be also helpful to clearly define who should serve as an arbiter in case of conflicting interpretation of these policies in concrete particular cases. Arbitrum Foundation seems like an obvious candidate for both roles, but we are open to exploring alternatives.
We vote FOR: Disclosure Policy and FOR: Responsible Voting Policy.
No doubt the DAO should implement a disclosure policy at least. On top of that, we believe the Responsible Voting Policy is best suited for the current DAO voting situation as we see it working well in the Optimism for some of its election votings. As Frisson said, ideally the DAO proposals should be passed even with abstains from delegates who have conflicts with them, but practically it's too early to implement Strict Self-Voting Policy especially for elections.
Voting to approve all three, as I believe the DAO needs to institute some type of uniform policy regarding COIs & Self-Voting Policies.
As the conversation evolves, I'm personally torn between the Responsible Voting Policy and the Strict Self-Voting Policy. I think for a lot of cases the Stricter policy would be best but I acknowledge there are some situations where voting for yourself isn't as harmful as others. Similar to shielded voting poll, it may be a good opportunity for a hybrid system depending on the type of vote. I'd have to think on it more...
Voting to approve all three, as I believe the DAO needs to institute some type of uniform policy regarding COIs & Self-Voting Policies.
As the conversation evolves, I'm personally torn between the Responsible Voting Policy and the Strict Self-Voting Policy. I think for a lot of cases the Stricter policy would be best but I acknowledge there are some situations where voting for yourself isn't as harmful as others. Similar to shielded voting poll, it may be a good opportunity for a hybrid system depending on the type of vote. I'd have to think on it more...
All said, at a minimum I believe some type of action needs to be taken. It would be a better look for the DAO then the current policy (or lack thereof).
I voted "For: Disclosure Policy."
To be honest, I’ve seen honest efforts in the past from some committees to disclose potential conflicts of interest and even abstain from voting when delegates or participants are directly involved.
While there may not be a strict manual to follow, I agree with implementing this policy to prevent future issues. It’s also a good practice for this organization.
After consideration, the @SEEDgov delegation has decided to vote “FOR: Responsible Voting Policy and FOR: Disclosure Policy” on this proposal at the Snapshot vote.
Thanks @Entropy for bringing this topic back into the discussion.
I voted FOR: Strict Self-Voting Policy. It's a standard practice is well-run organizations to avoid conflicts of interest. If a high-quality DAO proposal can't pass because there are too many conflicts, that means our delegate base isn't diverse enough.
Requiring large delegates to abstain from proposals they directly benefit from is a no brainer from a high level incentive design perspective.
We are voting FOR the "Disclosure Policy" because it offers a straightforward and effective approach to managing conflicts of interest within the DAO. Transparency is essential for maintaining trust, and this policy will help ensure that all potential conflicts are disclosed and addressed appropriately. We believe this is a crucial step in aligning the DAO's interests with those of its participants while preserving the integrity of the decision-making process.
"Strict Self-Voting Policy" is my favorite. This approach ensures that delegates or proposal authors abstain from voting in situations where they have a conflict of interest, thereby promoting transparency, fairness, and ethical behavior within the DAO. Adopting this policy will help to prevent any potential self-enrichment or bias, ultimately leading to more trustworthy governance.
I voted for Disclosure Policy, Responsible Voting policy. I believe this combo gives enough transparency and flexibility for us to act as a delegate (meaning we have "invested" VP) and to disclose any COI that may appear as a result of our other professional commitments.
After consideration, the @SEEDgov delegation has decided to vote “FOR: Responsible Voting Policy and FOR: Disclosure Policy” on this proposal at the Snapshot vote.
Thanks @Entropy for bringing this topic back into the discussion.
Disclosure and Transparency Policy: If a potential COI exists, it is expected that proposal authors or delegates disclose the nature and extent of the interest. While it may not always be clear if an individual stands to gain “directly” or “indirectly”, it is recommended to lean on the side of over-communication in the name of transparency. Delegates are not expected to abstain or alter their voting preferences in any way, but are free to choose to abstain.
In addition to the examples mentioned above, we also want to emphasize the importance of ensuring the disclosure of potential conflicts of interest (COIs) by members of Councils, Committees, and other gov positions. For instance, if I am a member of the LTIPP Council and have potential COIs with certain protocols, it is expected that I should disclose such situations before any vote is taken.
Currently, our team is leaning towards making the future delegate code of conduct opt-in, following in Uniswap DAO’s footsteps by creating a document that serves simply as a form of guidance. We envision soft-enforcement can be applied through the Delegate Incentive Program by requiring participating delegates to abide by the ratified code of conduct in order to be eligible for rewards. Further UI changes on Tally could also be applied to help token holders discover which delegates have publicly committed to following the agreed upon code of conduct.
Sounds interesting. If a code of conduct is approved, it would make sense for the program to only accept delegates who agree to abide by what the DAO has voted on. This could be seen as a non-negotiable condition for participating in the DIP. In the event of a potential violation, the DAO could decide via Snapshot vote whether a delegate has breached the code of conduct and, consequently, whether they should lose the right—either temporarily or permanently—to participate in the DIP.
That being said, we welcome the idea of establishing a code of conduct that includes guidelines on disclosing conflicts of interest (COI) and implementing a responsible voting policy. As mentioned earlier, disclosing COIs is ethically sound from our perspective. While we already observe responsible voting practices in action, formalizing it in a future code of conduct could add clarity and consistency.
However, we have reservations about adopting a strict self-voting policy, as it could restrict both the delegate's and their delegators' freedom to vote in the best interest of the DAO.
Requiring large delegates to abstain from proposals they directly benefit from is a no brainer from a high level incentive design perspective.
Our current lack of COI policies actually make proposals that benefit large delegates EASIER to pass!
That is not how we should make decisions as a DAO.
Please vote FOR a Strict Self-Voting Policy
We're voting FOR the "Disclosure and Transparency Policy." It's a solid middle ground that doesn't tie our hands but still ups our game. By making folks disclose potential conflicts, we're keeping things open without going overboard. It's practical, doable, and should help build trust without causing a headache to enforce.
I voted FOR: Strict Self-Voting Policy
I think this will prevent any kind of conflict of interests and power concentration!
We are in favor of Responsible voting. Shoutout to JoJo for coining this term but overall, this is what we see the most across the other Defi protocols we are involved in. Specifically, this allows for situations where you can still represent the best interests of your delegators while not solely voting for yourself.
In the strict no self-voting policy, let's say there's two parties A and B as the only two voters and delegates in a ecosystem. A has 1 vote while B has 99; let's say B is much more trusted and 99% of the delegators believe in them more. Under a strict no self voting policy, A would have to vote for B and vice versa, allowing A to win when realistically this shouldn't be the case. Of course this is a tiny pigeon hole view into this concept, but the point is that a reason a delegate has more voting power means that a proportionally more of the ARB token holders trust this delegate more, hence, it's counterintuitive for none of these votes to be able to be counted towards themselves.
I voted for: Strict Self-Voting Policy
I love to see this proposal. I think it was necessary to set some rules and not just leave it at the status quo. The best policy is a Strict Self-Voting policy because it means delegates with bigger power can't decide or swing votes for their benefit. Other policies are fine but could lead to more bureaucracy and complex processes. Let's keep it simple and just self-regulate each other.
I am voting FOR "Disclosure and Transparency Policy":
I am voting FOR "Disclosure and Transparency Policy":
I think it makes sense that disclosure of COI is part of delegates' mandate.
Actually, I don't think the delegate should be allowed to vote on his own proposal, especially when the proposal involves a large amount of fund and the delegate has a lot of votes, because I can't believe that the delegate is completely selfless. So I think Strict Self-Voting Policy is necessary.
Blockworks Research will be voting in favor of the Disclosure Policy, Responsible Voting policy, and the Strict Self-Voting policy.
These seem to be the most straightforward solutions currently to conflict of interest and the least disruptive. We can glean incidents/possible violations from these policies and decide if there should be any type of further ruling enforced or guidelines from there.
Blockworks Research will be voting in favor of the Disclosure Policy, Responsible Voting policy, and the Strict Self-Voting policy.
These seem to be the most straightforward solutions currently to conflict of interest and the least disruptive. We can glean incidents/possible violations from these policies and decide if there should be any type of further ruling enforced or guidelines from there.
From our point of view, it's the Self-Voting policy is attempting to draw a line for where DAO delegates/protocols/users represent their own interests and have the DAO have a distinct set of interests delineated from those. This makes sense, because while individuals in the DAO come from a list of different backgrounds, at the end of the day the DAO should still have a few select distinct interests separate from those individuals. Ideally we can achieve this through incentive alignment, however there are sometimes areas where policy is necessary.
100% agreed with "FOR: Strict Self-Voting Policy".
This is something we've been discussing in forums since the DAO was first formed. Delegates (and protocols) should abstain from proposals that directly benefit them, and disclose the ones that indirectly may. The definition of "indirectly" here should be treated carefully, since it's only natural that (for example, incentives) have an indirect benefit in the whole ecosystem, actors, and protocols (which, with incentives, is the idea anyway).
I agree with the “FOR: Responsible Voting Policy” vote as it balances ethical governance with practical delegation needs. Maintaining trust while allowing effective representation is crucial. Exploring tools to automate conflict of interest disclosures is an excellent idea. It would streamline transparency, making it easier for delegates to manage and disclose potential conflicts, thus enhancing overall governance integrity.
For all the reasons mentioned above, I am voting for "FOR: Disclosure Policy" and "FOR: Responsible Voting Policy".
I think is definitely good if people disclose their conflicts; is also good if, in a vote that can benefit themself, they also vote in a way that is "responsible", so for other 2 seats in a 3 seats election etcetera. I am against the self strict voting policies, especially because protocols for example should be allowed to vote for proposals that directly involve themself. If that was not allowed any user delegating their precious arb to the protocol of their choice would see their delegation being useless, because the protocol can't vote for his own benefit. A byproduct that I don't want, among others.
For all the reasons mentioned above, I am voting for "FOR: Disclosure Policy" and "FOR: Responsible Voting Policy".
I think is definitely good if people disclose their conflicts; is also good if, in a vote that can benefit themself, they also vote in a way that is "responsible", so for other 2 seats in a 3 seats election etcetera. I am against the self strict voting policies, especially because protocols for example should be allowed to vote for proposals that directly involve themself. If that was not allowed any user delegating their precious arb to the protocol of their choice would see their delegation being useless, because the protocol can't vote for his own benefit. A byproduct that I don't want, among others.
Regardless of my vote, @Entropy I am also interested about the specific implementation of this proposal. Knowing it can't be enforced, should any new vote from now on decide what happens if there is a self voting (with the strict voting policy on) or anything that is against the expected behaviour? How we will specifically handle these conflicts?
I'm voting for "Disclosure and Transparency Policy". Encouraging disclosure can push for openness and trust within the DAO. The outcome is that voters can make informed decisions while maintaining the freedom to vote as they choose. I think that in this way, both accountability and autonomy are guaranteed.
I voted "FOR: Responsible Voting Policy" on snapshot because it strikes a balance between ethical governance and practical delegation. This approach helps maintain trust within the DAO while allowing delegates to represent their communities effectively.
Here’s an idea: should we explore tools to automate conflict of interest disclosures, making it easier for delegates to manage and disclose their potential conflicts transparently?
We heavily agree with the sentiment of the DAO taking on some sort of COI policy moving forward. Although, we are interested in all of the options proposed, a simple disclosure policy and more responsible voting policies seem to be the proper next step for the DAO. We agree with JoJo in that you should be able to vote for yourself, but maybe the vote should not be larger than the distribution of votes to other candidates. Bare minimum though, we think a disclosure policy going forward would help the DAO become more transparent and foster better communications between delegates.
As other delegates have noted, we would like to see more strict definitions that draw lines in the sand for what defines a close-associate and otherwise.
Thanks for sharing the Entropy.
Responsible voting:
Hi! Thank you once again for proposing the type of discussions that the DAO needs.
The first thing this discussion makes me ask is, what do we want to avoid? And secondly, what are the undesirable side effects of prohibiting certain conduct?
What we want to avoid:
Hi! Thank you once again for proposing the type of discussions that the DAO needs.
The first thing this discussion makes me ask is, what do we want to avoid? And secondly, what are the undesirable side effects of prohibiting certain conduct?
What we want to avoid:
Voting for oneself per se is not bad. If a delegate is convinced that their proposal benefits the DAO and can demonstrate this with arguments, there is a net positive benefit for the DAO if that delegate votes for themselves or the proposal they are pushing.
Why would someone be forced to vote in a way they believe is less beneficial for the DAO or Arbitrum users?
So, the problem itself is not the direction of the vote but the potential conflict of interest that may arise as a consequence of the vote.
So, despite the explanation...
We would argue that within a DAO’s operations, the majority of instances involving COI are the result of an individual/company using their delegated voting power to engage in self-voting or “self-enrichment”
Although self-voting can sometimes be the most obvious form of conflict of interest, it is not always the most manifest in practice. The transparency of votes makes it easy to see who is operating solely for their own benefit without adding any value to the DAO, which ultimately would be the most objectionable action.
What are the undesirable side effects of prohibiting certain conduct?
Suppose we establish the premise that self-voting = COI and therefore prohibit it. In that case, we will be forcing delegates to vote for options that are not optimal or necessarily the best by default.
According to the Arbitrum Constitution: “The Arbitrum ecosystem should be managed for the benefit of all Arbitrum users.”
And that has to be the guiding principle that determines the direction of the votes. There must be a net positive outcome from the proposals for all Arbitrum users.
Another undesirable side effect would be the one already discussed in the post by immutable lawyer, and raised by @DisruptionJoe and myself. We would be creating situations with low transparency.
For example, I don't vote for myself for a position in the DAO, but I coordinate with another delegate with similar voting power to vote for me in exchange for my vote for them. What would that be? These situations are encouraged by such a prohibition.
For this reason, I am against a rule that directs the votes of the delegates. Even though these rules may seem noble and well-intentioned, in practice, they make the DAO less transparent.
We would argue that within a DAO’s operations, the majority of instances involving COI are the result of an individual/company using their delegated voting power to engage in self-voting or “self-enrichment”.
Also, I think this is not necessarily the biggest problem. Conflict of interest situations manifest during the discussion and voting stages of a proposal, but they materialize and are only possible during the execution of the proposals.
What do I mean by this?
Consider a proposal where voting is taking place to onboard a service provider to perform a specific task (e.g., @Entropy).
Is there a COI if Entropy or its members vote in favor of the proposal? There are arguments to support both yes and no (the latter being the viewpoint I agree with more).
Now, during the execution of the proposal, it will become clear whether a COI actually existed. Essentially, this is because they might fail to fulfill the agreement, take the ARB tokens, and show that they were voting in their own interest at the expense of Arbitrum users.
When it comes to more complex proposals that involve committees, the execution of the decisions made by these committees will reveal whether their members are making decisions based on the greatest benefit to Arbitrum users or using their position to benefit themselves over the users.
How do I think COI should be minimized?
In the first place, I support your Disclosure and Transparency Policy.
Disclosure and Transparency Policy: If a potential COI exists, it is expected that proposal authors or delegates disclose the nature and extent of the interest. While it may not always be clear if an individual stands to gain “directly” or “indirectly”, it is recommended to lean on the side of over-communication in the name of transparency. Delegates are not expected to abstain or alter their voting preferences in any way, but are free to choose to abstain.
But second, I think the DAO should have a consensus on the Minimum Viable Proposal (MVP). A framework should be established outlining the minimum content that a proposal must contain in order to be submitted to Snapshot.
We should work on turning this "Incomplete Guide to Submitting a Proposal" by @Sinkas (which is very good) into a complete guide that includes the necessary requirements for a proposal to be voted on.
Within that minimum content, there should be a section on Conflict of Interest explaining who cannot be involved or take actions related to the proposal due to a conflict of interest.
This is not an enforceable rule that prevents proposals from going to Snapshot (similar to the rule that proposals must be published on Thursdays). However, a significant number of delegates agree on the minimum content a proposal must have to be approved:
By including conflict of interest rules within the proposals themselves, we can determine prior to the vote who cannot benefit from it or be part of it. This way, we are not limiting how to vote but rather what can be voted on.
I hope this makes sense
Even if self-voting was monitored manually by contributors or a committee, it is quite easy to circumvent self-voting policies onchain by simply transferring voting power to anonymous wallets. To quote @DisruptionJoe, in general, “unenforceable rules create situations where bad actors have an advantage over good actors’'
Thank you @JoJo for identifying a few additional edge cases. We have updated the language of the proposal to hopefully make things more clear in regards to neutral voting and equal distribution of voting power in a weighted election. Additionally, our team is in the midst of another proposal based on other points raised in @Bob-Rossi's previous RFC to standardize non-security elections. In it we will suggest some other guidelines for proposal authors such as making sure there is always a method to abstain or remain “neutral”.
@pedrob, thank you as well for the thoughtful response. Incorporating COI disclosure requirements into the actual proposal template is an interesting idea and if the DAO wishes, is something we can work to include in the larger DAO operations proposal & delegate code of conduct that will seek to update the Constitution.
I am voting For. At the Aave DAO we already have this kind of policy and with Arbitrum being such a big DAO there is also the need. Also the DAO is for example only paying delegates that dont receive any other kind of "fixed" payments for example because they are a risk service provider. The DAO is probably overspending because there aren't rules like this to keep it fair and only pay those that are active and don't receive anything else from the DAO.
COI's being culturally acceptable makes us look unprofessional and undermines the perceived integrity of our DAO's governance system to the outside world. This change is long overdue, and can be enforced in some extent by the Delegate Incentive Program.
Thank you for this proposal. Would like to add some nuances to this
After consideration, the @SEEDgov delegation has decided to vote “FOR: Responsible Voting Policy and FOR: Disclosure Policy” on this proposal at the Snapshot vote.
Thanks @Entropy for bringing this topic back into the discussion.
Disclosure and Transparency Policy: If a potential COI exists, it is expected that proposal authors or delegates disclose the nature and extent of the interest. While it may not always be clear if an individual stands to gain “directly” or “indirectly”, it is recommended to lean on the side of over-communication in the name of transparency. Delegates are not expected to abstain or alter their voting preferences in any way, but are free to choose to abstain.
In addition to the examples mentioned above, we also want to emphasize the importance of ensuring the disclosure of potential conflicts of interest (COIs) by members of Councils, Committees, and other gov positions. For instance, if I am a member of the LTIPP Council and have potential COIs with certain protocols, it is expected that I should disclose such situations before any vote is taken.
Currently, our team is leaning towards making the future delegate code of conduct opt-in, following in Uniswap DAO’s footsteps by creating a document that serves simply as a form of guidance. We envision soft-enforcement can be applied through the Delegate Incentive Program by requiring participating delegates to abide by the ratified code of conduct in order to be eligible for rewards. Further UI changes on Tally could also be applied to help token holders discover which delegates have publicly committed to following the agreed upon code of conduct.
Sounds interesting. If a code of conduct is approved, it would make sense for the program to only accept delegates who agree to abide by what the DAO has voted on. This could be seen as a non-negotiable condition for participating in the DIP. In the event of a potential violation, the DAO could decide via Snapshot vote whether a delegate has breached the code of conduct and, consequently, whether they should lose the right—either temporarily or permanently—to participate in the DIP.
That being said, we welcome the idea of establishing a code of conduct that includes guidelines on disclosing conflicts of interest (COI) and implementing a responsible voting policy. As mentioned earlier, disclosing COIs is ethically sound from our perspective. While we already observe responsible voting practices in action, formalizing it in a future code of conduct could add clarity and consistency.
However, we have reservations about adopting a strict self-voting policy, as it could restrict both the delegate's and their delegators' freedom to vote in the best interest of the DAO.
Requiring large delegates to abstain from proposals they directly benefit from is a no brainer from a high level incentive design perspective.
Our current lack of COI policies actually make proposals that benefit large delegates EASIER to pass!
That is not how we should make decisions as a DAO.
Please vote FOR a Strict Self-Voting Policy
We're voting FOR the "Disclosure and Transparency Policy." It's a solid middle ground that doesn't tie our hands but still ups our game. By making folks disclose potential conflicts, we're keeping things open without going overboard. It's practical, doable, and should help build trust without causing a headache to enforce.
I voted FOR: Strict Self-Voting Policy
I think this will prevent any kind of conflict of interests and power concentration!
We are in favor of Responsible voting. Shoutout to JoJo for coining this term but overall, this is what we see the most across the other Defi protocols we are involved in. Specifically, this allows for situations where you can still represent the best interests of your delegators while not solely voting for yourself.
In the strict no self-voting policy, let's say there's two parties A and B as the only two voters and delegates in a ecosystem. A has 1 vote while B has 99; let's say B is much more trusted and 99% of the delegators believe in them more. Under a strict no self voting policy, A would have to vote for B and vice versa, allowing A to win when realistically this shouldn't be the case. Of course this is a tiny pigeon hole view into this concept, but the point is that a reason a delegate has more voting power means that a proportionally more of the ARB token holders trust this delegate more, hence, it's counterintuitive for none of these votes to be able to be counted towards themselves.
I voted for: Strict Self-Voting Policy
I love to see this proposal. I think it was necessary to set some rules and not just leave it at the status quo. The best policy is a Strict Self-Voting policy because it means delegates with bigger power can't decide or swing votes for their benefit. Other policies are fine but could lead to more bureaucracy and complex processes. Let's keep it simple and just self-regulate each other.
I am voting FOR "Disclosure and Transparency Policy":
I am voting FOR "Disclosure and Transparency Policy":
I think it makes sense that disclosure of COI is part of delegates' mandate.
Actually, I don't think the delegate should be allowed to vote on his own proposal, especially when the proposal involves a large amount of fund and the delegate has a lot of votes, because I can't believe that the delegate is completely selfless. So I think Strict Self-Voting Policy is necessary.
Blockworks Research will be voting in favor of the Disclosure Policy, Responsible Voting policy, and the Strict Self-Voting policy.
These seem to be the most straightforward solutions currently to conflict of interest and the least disruptive. We can glean incidents/possible violations from these policies and decide if there should be any type of further ruling enforced or guidelines from there.
Blockworks Research will be voting in favor of the Disclosure Policy, Responsible Voting policy, and the Strict Self-Voting policy.
These seem to be the most straightforward solutions currently to conflict of interest and the least disruptive. We can glean incidents/possible violations from these policies and decide if there should be any type of further ruling enforced or guidelines from there.
From our point of view, it's the Self-Voting policy is attempting to draw a line for where DAO delegates/protocols/users represent their own interests and have the DAO have a distinct set of interests delineated from those. This makes sense, because while individuals in the DAO come from a list of different backgrounds, at the end of the day the DAO should still have a few select distinct interests separate from those individuals. Ideally we can achieve this through incentive alignment, however there are sometimes areas where policy is necessary.
100% agreed with "FOR: Strict Self-Voting Policy".
This is something we've been discussing in forums since the DAO was first formed. Delegates (and protocols) should abstain from proposals that directly benefit them, and disclose the ones that indirectly may. The definition of "indirectly" here should be treated carefully, since it's only natural that (for example, incentives) have an indirect benefit in the whole ecosystem, actors, and protocols (which, with incentives, is the idea anyway).
I agree with the “FOR: Responsible Voting Policy” vote as it balances ethical governance with practical delegation needs. Maintaining trust while allowing effective representation is crucial. Exploring tools to automate conflict of interest disclosures is an excellent idea. It would streamline transparency, making it easier for delegates to manage and disclose potential conflicts, thus enhancing overall governance integrity.
For all the reasons mentioned above, I am voting for "FOR: Disclosure Policy" and "FOR: Responsible Voting Policy".
I think is definitely good if people disclose their conflicts; is also good if, in a vote that can benefit themself, they also vote in a way that is "responsible", so for other 2 seats in a 3 seats election etcetera. I am against the self strict voting policies, especially because protocols for example should be allowed to vote for proposals that directly involve themself. If that was not allowed any user delegating their precious arb to the protocol of their choice would see their delegation being useless, because the protocol can't vote for his own benefit. A byproduct that I don't want, among others.
For all the reasons mentioned above, I am voting for "FOR: Disclosure Policy" and "FOR: Responsible Voting Policy".
I think is definitely good if people disclose their conflicts; is also good if, in a vote that can benefit themself, they also vote in a way that is "responsible", so for other 2 seats in a 3 seats election etcetera. I am against the self strict voting policies, especially because protocols for example should be allowed to vote for proposals that directly involve themself. If that was not allowed any user delegating their precious arb to the protocol of their choice would see their delegation being useless, because the protocol can't vote for his own benefit. A byproduct that I don't want, among others.
Regardless of my vote, @Entropy I am also interested about the specific implementation of this proposal. Knowing it can't be enforced, should any new vote from now on decide what happens if there is a self voting (with the strict voting policy on) or anything that is against the expected behaviour? How we will specifically handle these conflicts?
I'm voting for "Disclosure and Transparency Policy". Encouraging disclosure can push for openness and trust within the DAO. The outcome is that voters can make informed decisions while maintaining the freedom to vote as they choose. I think that in this way, both accountability and autonomy are guaranteed.
I voted "FOR: Responsible Voting Policy" on snapshot because it strikes a balance between ethical governance and practical delegation. This approach helps maintain trust within the DAO while allowing delegates to represent their communities effectively.
Here’s an idea: should we explore tools to automate conflict of interest disclosures, making it easier for delegates to manage and disclose their potential conflicts transparently?
We heavily agree with the sentiment of the DAO taking on some sort of COI policy moving forward. Although, we are interested in all of the options proposed, a simple disclosure policy and more responsible voting policies seem to be the proper next step for the DAO. We agree with JoJo in that you should be able to vote for yourself, but maybe the vote should not be larger than the distribution of votes to other candidates. Bare minimum though, we think a disclosure policy going forward would help the DAO become more transparent and foster better communications between delegates.
As other delegates have noted, we would like to see more strict definitions that draw lines in the sand for what defines a close-associate and otherwise.
Thanks for sharing the Entropy.
Responsible voting:
Hi! Thank you once again for proposing the type of discussions that the DAO needs.
The first thing this discussion makes me ask is, what do we want to avoid? And secondly, what are the undesirable side effects of prohibiting certain conduct?
What we want to avoid:
Hi! Thank you once again for proposing the type of discussions that the DAO needs.
The first thing this discussion makes me ask is, what do we want to avoid? And secondly, what are the undesirable side effects of prohibiting certain conduct?
What we want to avoid:
Voting for oneself per se is not bad. If a delegate is convinced that their proposal benefits the DAO and can demonstrate this with arguments, there is a net positive benefit for the DAO if that delegate votes for themselves or the proposal they are pushing.
Why would someone be forced to vote in a way they believe is less beneficial for the DAO or Arbitrum users?
So, the problem itself is not the direction of the vote but the potential conflict of interest that may arise as a consequence of the vote.
So, despite the explanation...
We would argue that within a DAO’s operations, the majority of instances involving COI are the result of an individual/company using their delegated voting power to engage in self-voting or “self-enrichment”
Although self-voting can sometimes be the most obvious form of conflict of interest, it is not always the most manifest in practice. The transparency of votes makes it easy to see who is operating solely for their own benefit without adding any value to the DAO, which ultimately would be the most objectionable action.
What are the undesirable side effects of prohibiting certain conduct?
Suppose we establish the premise that self-voting = COI and therefore prohibit it. In that case, we will be forcing delegates to vote for options that are not optimal or necessarily the best by default.
According to the Arbitrum Constitution: “The Arbitrum ecosystem should be managed for the benefit of all Arbitrum users.”
And that has to be the guiding principle that determines the direction of the votes. There must be a net positive outcome from the proposals for all Arbitrum users.
Another undesirable side effect would be the one already discussed in the post by immutable lawyer, and raised by @DisruptionJoe and myself. We would be creating situations with low transparency.
For example, I don't vote for myself for a position in the DAO, but I coordinate with another delegate with similar voting power to vote for me in exchange for my vote for them. What would that be? These situations are encouraged by such a prohibition.
For this reason, I am against a rule that directs the votes of the delegates. Even though these rules may seem noble and well-intentioned, in practice, they make the DAO less transparent.
We would argue that within a DAO’s operations, the majority of instances involving COI are the result of an individual/company using their delegated voting power to engage in self-voting or “self-enrichment”.
Also, I think this is not necessarily the biggest problem. Conflict of interest situations manifest during the discussion and voting stages of a proposal, but they materialize and are only possible during the execution of the proposals.
What do I mean by this?
Consider a proposal where voting is taking place to onboard a service provider to perform a specific task (e.g., @Entropy).
Is there a COI if Entropy or its members vote in favor of the proposal? There are arguments to support both yes and no (the latter being the viewpoint I agree with more).
Now, during the execution of the proposal, it will become clear whether a COI actually existed. Essentially, this is because they might fail to fulfill the agreement, take the ARB tokens, and show that they were voting in their own interest at the expense of Arbitrum users.
When it comes to more complex proposals that involve committees, the execution of the decisions made by these committees will reveal whether their members are making decisions based on the greatest benefit to Arbitrum users or using their position to benefit themselves over the users.
How do I think COI should be minimized?
In the first place, I support your Disclosure and Transparency Policy.
Disclosure and Transparency Policy: If a potential COI exists, it is expected that proposal authors or delegates disclose the nature and extent of the interest. While it may not always be clear if an individual stands to gain “directly” or “indirectly”, it is recommended to lean on the side of over-communication in the name of transparency. Delegates are not expected to abstain or alter their voting preferences in any way, but are free to choose to abstain.
But second, I think the DAO should have a consensus on the Minimum Viable Proposal (MVP). A framework should be established outlining the minimum content that a proposal must contain in order to be submitted to Snapshot.
We should work on turning this "Incomplete Guide to Submitting a Proposal" by @Sinkas (which is very good) into a complete guide that includes the necessary requirements for a proposal to be voted on.
Within that minimum content, there should be a section on Conflict of Interest explaining who cannot be involved or take actions related to the proposal due to a conflict of interest.
This is not an enforceable rule that prevents proposals from going to Snapshot (similar to the rule that proposals must be published on Thursdays). However, a significant number of delegates agree on the minimum content a proposal must have to be approved:
By including conflict of interest rules within the proposals themselves, we can determine prior to the vote who cannot benefit from it or be part of it. This way, we are not limiting how to vote but rather what can be voted on.
I hope this makes sense
Even if self-voting was monitored manually by contributors or a committee, it is quite easy to circumvent self-voting policies onchain by simply transferring voting power to anonymous wallets. To quote @DisruptionJoe, in general, “unenforceable rules create situations where bad actors have an advantage over good actors’'
Thank you @JoJo for identifying a few additional edge cases. We have updated the language of the proposal to hopefully make things more clear in regards to neutral voting and equal distribution of voting power in a weighted election. Additionally, our team is in the midst of another proposal based on other points raised in @Bob-Rossi's previous RFC to standardize non-security elections. In it we will suggest some other guidelines for proposal authors such as making sure there is always a method to abstain or remain “neutral”.
@pedrob, thank you as well for the thoughtful response. Incorporating COI disclosure requirements into the actual proposal template is an interesting idea and if the DAO wishes, is something we can work to include in the larger DAO operations proposal & delegate code of conduct that will seek to update the Constitution.
I am voting For. At the Aave DAO we already have this kind of policy and with Arbitrum being such a big DAO there is also the need. Also the DAO is for example only paying delegates that dont receive any other kind of "fixed" payments for example because they are a risk service provider. The DAO is probably overspending because there aren't rules like this to keep it fair and only pay those that are active and don't receive anything else from the DAO.
COI's being culturally acceptable makes us look unprofessional and undermines the perceived integrity of our DAO's governance system to the outside world. This change is long overdue, and can be enforced in some extent by the Delegate Incentive Program.
Thank you for this proposal. Would like to add some nuances to this
Thanks for sharing the Entropy.
Responsible voting:
Knowing what would/wouldn't be counted as a Close Associate would be useful. We have seen the greatest friction on this topic around elections where it is unclear which individual candidates a delegate can/can't support.
For example, would the following be treated as Close Associates for Treasure as a delegate:
Also noting my support for @JoJo's observation on the need for clarification around the specific language for Responsible Voting.
Strict Self-Voting Policy:
This term may exclude many delegates from voting on certain important proposals, for example, future user incentive programs.
For that reason, I believe the Strict Self-Voting Policy is infeasible.
Even if self-voting was monitored manually by contributors or a committee, it is quite easy to circumvent self-voting policies onchain by simply transferring voting power to anonymous wallets. To quote @DisruptionJoe, in general, “unenforceable rules create situations where bad actors have an advantage over good actors’'
I wrote about the same thing in the discussions in January. Corporations have documents and a regulator that can track this, but it is quite difficult to do there too. There is always the option to delegate one vote to your friend, so I think there is no point in limiting anyone. Of course, I want everyone to be honest, but in this case, honest participants will lose.
In an election with multiple seats, candidates may vote for themselves as long as they also cast votes to fill the remaining positions
Also, I think that this can be easily circumvented by temporarily transferring votes. Secondly, if a delegate has few votes and his own votes are not enough to be elected, why should he give anything to those who have more of these votes? There is no logic in this and no honesty or nobility.
Thank you @JoJo for identifying a few additional edge cases. We have updated the language of the proposal to hopefully make things more clear in regards to neutral voting and equal distribution of voting power in a weighted election. Additionally, our team is in the midst of another proposal based on other points raised in @Bob-Rossi's previous RFC to standardize non-security elections. In it we will suggest some other guidelines for proposal authors such as making sure there is always a method to abstain or remain “neutral”.
@pedrob, thank you as well for the thoughtful response. Incorporating COI disclosure requirements into the actual proposal template is an interesting idea and if the DAO wishes, is something we can work to include in the larger DAO operations proposal & delegate code of conduct that will seek to update the Constitution.
@Pepperoni_Jo3 you bring up an excellent point regarding the specific language used to describe COI and close associates. This highlights the nuanced nature of COI discussions and is why we started with a temperature check rather than a full code of conduct policy. The DAO may indicate that it does not want a strict-self voting policy and therefore discussing exact language is not even needed. Overall, we acknowledge that the definitions presented are likely far from perfect, but our hope is that this vote will help indicate the general direction the DAO wishes to take regarding COI.
To reiterate the purpose of this proposal, no policy, guideline, or social contract will be adopted as a direct result of this vote. In addition to sparking a conversation, it is designed to help us understand overall sentiment to inform what clauses and language to include in a future, more comprehensive delegate code of conduct proposal.
COI's being culturally acceptable makes us look unprofessional and undermines the perceived integrity of our DAO's governance system to the outside world. This change is long overdue, and can be enforced in some extent by the Delegate Incentive Program.
All of the above.
This would be a massive improvement in the DAO, and will make us look soooooo much more professional. Delegates have an advantage over non-delegates just by being in the room talking with other voters. Abstaining helps make things a bit more even for proposals that don't have delegate benefit.
Said more clearly: If you are a delegate that has a proposal up for vote, and you abstain, I would argue you still have an unfair advantage to a nondelegate that has a proposal up for vote.
The relationships delegates have with each other, especially large delegates, creates an unfair advantage. Not to mention the fear that voting against someone's proposal may make them not favor you in some future business/DAO opportunity.
Strong agree that we don't need another council, this can be mostly socially enforced, however, in practice we do have a council of sorts already in place that could manage some enforcement: The Delegate Incentives Program.
If someone votes in favor of their own direct benefit, do they really need the Delegate Incentive Program's reward? Seems like they have incentive enough. If we already have a team reviewing all these comments, it should be easy enough for that team to see if people have clear conflicts get called out for not declaring them or not voting abstain... they should get their incentives slashed, if not completely, then by some large %.
For that reason, I believe the Strict Self-Voting Policy is infeasible.
I disagree 100%.
Large generalized incentive programs will have a large burden to overcome, it is true. I personally see this as a good thing. It would mean to pass an incentive program, it would have a better chance if it were more narrowly scoped. This is a bug not a feature. We just passed a vote to stop proposing any incentives for 3 months after these massive STIP, LTIPP and STIP-Bridge proposals. It is very questionable if they were good for the DAO, but there is no question, they were good for many large delegates (especially STIP and STIP Bridge).
IMO Proposal's that benefit a large number of high ranking delegates should be put to a higher scrutiny. Our current lack of COI policies actually make proposals that benefit large delegates EASIER to pass. Imagine what this looks like to an outsider, "If I just structure my proposal so that the large delegates benefit, it will be sure to pass."
This is DAOing it wrong, I'm sorry.
Thank you for this proposal. Would like to add some nuances to this
Yes: if there is a vote for a protocol to receive a grant or not, and i am part of that team or an advisor I should disclose it in my voting rationale if i am a delegate voting; if I am the author of the proposal, even more. And it's also natural that if I hold 10% of circulating supply, I should disclose it as well. Likely, if I hold 5% of the supply makes sense to disclose. Where do we draw the line here? Is it a % of coins? We go in the situation in which it blurs.
We already discussed this point; but I like idea of "it is recommended to lean on the side of over-communication in the name of transparency", I think some folks already applied this from time to time, but putting it on (virtual) paper helps.
Great job @Entropy
Thanks for sharing the Entropy.
Responsible voting:
Knowing what would/wouldn't be counted as a Close Associate would be useful. We have seen the greatest friction on this topic around elections where it is unclear which individual candidates a delegate can/can't support.
For example, would the following be treated as Close Associates for Treasure as a delegate:
Also noting my support for @JoJo's observation on the need for clarification around the specific language for Responsible Voting.
Strict Self-Voting Policy:
This term may exclude many delegates from voting on certain important proposals, for example, future user incentive programs.
For that reason, I believe the Strict Self-Voting Policy is infeasible.
Even if self-voting was monitored manually by contributors or a committee, it is quite easy to circumvent self-voting policies onchain by simply transferring voting power to anonymous wallets. To quote @DisruptionJoe, in general, “unenforceable rules create situations where bad actors have an advantage over good actors’'
I wrote about the same thing in the discussions in January. Corporations have documents and a regulator that can track this, but it is quite difficult to do there too. There is always the option to delegate one vote to your friend, so I think there is no point in limiting anyone. Of course, I want everyone to be honest, but in this case, honest participants will lose.
In an election with multiple seats, candidates may vote for themselves as long as they also cast votes to fill the remaining positions
Also, I think that this can be easily circumvented by temporarily transferring votes. Secondly, if a delegate has few votes and his own votes are not enough to be elected, why should he give anything to those who have more of these votes? There is no logic in this and no honesty or nobility.
Thank you @JoJo for identifying a few additional edge cases. We have updated the language of the proposal to hopefully make things more clear in regards to neutral voting and equal distribution of voting power in a weighted election. Additionally, our team is in the midst of another proposal based on other points raised in @Bob-Rossi's previous RFC to standardize non-security elections. In it we will suggest some other guidelines for proposal authors such as making sure there is always a method to abstain or remain “neutral”.
@pedrob, thank you as well for the thoughtful response. Incorporating COI disclosure requirements into the actual proposal template is an interesting idea and if the DAO wishes, is something we can work to include in the larger DAO operations proposal & delegate code of conduct that will seek to update the Constitution.
@Pepperoni_Jo3 you bring up an excellent point regarding the specific language used to describe COI and close associates. This highlights the nuanced nature of COI discussions and is why we started with a temperature check rather than a full code of conduct policy. The DAO may indicate that it does not want a strict-self voting policy and therefore discussing exact language is not even needed. Overall, we acknowledge that the definitions presented are likely far from perfect, but our hope is that this vote will help indicate the general direction the DAO wishes to take regarding COI.
To reiterate the purpose of this proposal, no policy, guideline, or social contract will be adopted as a direct result of this vote. In addition to sparking a conversation, it is designed to help us understand overall sentiment to inform what clauses and language to include in a future, more comprehensive delegate code of conduct proposal.
COI's being culturally acceptable makes us look unprofessional and undermines the perceived integrity of our DAO's governance system to the outside world. This change is long overdue, and can be enforced in some extent by the Delegate Incentive Program.
All of the above.
This would be a massive improvement in the DAO, and will make us look soooooo much more professional. Delegates have an advantage over non-delegates just by being in the room talking with other voters. Abstaining helps make things a bit more even for proposals that don't have delegate benefit.
Said more clearly: If you are a delegate that has a proposal up for vote, and you abstain, I would argue you still have an unfair advantage to a nondelegate that has a proposal up for vote.
The relationships delegates have with each other, especially large delegates, creates an unfair advantage. Not to mention the fear that voting against someone's proposal may make them not favor you in some future business/DAO opportunity.
Strong agree that we don't need another council, this can be mostly socially enforced, however, in practice we do have a council of sorts already in place that could manage some enforcement: The Delegate Incentives Program.
If someone votes in favor of their own direct benefit, do they really need the Delegate Incentive Program's reward? Seems like they have incentive enough. If we already have a team reviewing all these comments, it should be easy enough for that team to see if people have clear conflicts get called out for not declaring them or not voting abstain... they should get their incentives slashed, if not completely, then by some large %.
For that reason, I believe the Strict Self-Voting Policy is infeasible.
I disagree 100%.
Large generalized incentive programs will have a large burden to overcome, it is true. I personally see this as a good thing. It would mean to pass an incentive program, it would have a better chance if it were more narrowly scoped. This is a bug not a feature. We just passed a vote to stop proposing any incentives for 3 months after these massive STIP, LTIPP and STIP-Bridge proposals. It is very questionable if they were good for the DAO, but there is no question, they were good for many large delegates (especially STIP and STIP Bridge).
IMO Proposal's that benefit a large number of high ranking delegates should be put to a higher scrutiny. Our current lack of COI policies actually make proposals that benefit large delegates EASIER to pass. Imagine what this looks like to an outsider, "If I just structure my proposal so that the large delegates benefit, it will be sure to pass."
This is DAOing it wrong, I'm sorry.
Thank you for this proposal. Would like to add some nuances to this
Yes: if there is a vote for a protocol to receive a grant or not, and i am part of that team or an advisor I should disclose it in my voting rationale if i am a delegate voting; if I am the author of the proposal, even more. And it's also natural that if I hold 10% of circulating supply, I should disclose it as well. Likely, if I hold 5% of the supply makes sense to disclose. Where do we draw the line here? Is it a % of coins? We go in the situation in which it blurs.
We already discussed this point; but I like idea of "it is recommended to lean on the side of over-communication in the name of transparency", I think some folks already applied this from time to time, but putting it on (virtual) paper helps.
Great job @Entropy
