GMX governance upgrade

Introduction

We are excited to propose a governance upgrade for GMX DAO. An on-chain voting system for GMX DAO will revolutionize the governance structure, decision-making processes, and community involvement within the GMX ecosystem. This proposal outlines the rationale, structure, and specifications for the governance upgrade for GMX DAO

GMX, as a Defi protocol, aims to provide users with innovative financial products and services while maintaining decentralization, transparency, and community governance. Introducing a governance upgrade aligns with these principles by empowering the community to actively participate in the governance and development of the GMX platform.

Objectives:

  1. Enhanced Governance: Formalize the governance and proposal lifecycle for GMX DAO, establish a standardized template for Improvement Proposals, introduce a temperature check mechanism to enhance the efficiency of on-chain proposals, deploy voting strategies for the Temp Check process, and establish a transparent and decentralized governance framework where community members can propose and vote on protocol upgrades, parameter adjustments, and strategic decisions.
  2. Community Engagement: Create a vibrant and engaged community by providing avenues for active participation, discussion, and collaboration.
  3. Protocol Development: Facilitate rapid innovation and development by enabling community-driven initiatives, funding proposals through grants, hackathons, RFPs, audits, and engaging DAO contributors.

Structure:

The proposed DAO for GMX will be structured as follows:

  1. Governance Mechanism: Utilize a token-based voting system where GMX token holders can propose, discuss, and vote on governance proposals. Each token represents voting power, providing proportional representation based on stake.
  2. Proposal Process: Once we launch the on-chain governance this is how the process will look like.

Phase 1: Ideation
This initial stage aims to gauge community feedback on the author’s concept. Unique ideas can be tagged with #idea on the forum, where they will have their dedicated thread. Typically, Phase 1 proposals are informally brainstormed in settings such as Discord chats or Telegram groups. This phase may involve garnering community endorsement for the specifications of a potential Request for Comment (RFC) through multiple in-text polls.

Duration: Open

Phase 2: Request for Comment

During this phase, authors of proposals can formally seek community input by crafting their idea into a Request for Comment (RFC) using the provided template (Link pending DAO Approvals). Throughout the drafting process of the RFC, the author is expected to integrate community feedback and refine the proposal accordingly. The status of Draft RFC aims to accumulate sufficient feedback and endorsement to establish a soft consensus, thereby enabling the progression to a formal proposal with reduced risk of immediate rejection.

Duration: Open

Phase 3: Temperature checks can be conducted off-chain using Snapshot, incorporating the following criteria.

Voting mechanism: Simple majority (requiring 65% + 1 of the smallest token unit)
Quorum: TBD
Minimum token threshold for proposals: 10000
Voting window duration: 5 days

Given Snapshot’s off-chain and gasless nature, there is an increased risk of spam, which can be alleviated by imposing a minimum token requirement.

Upon Phase 3 completion, the author can transition a Request for Comment (RFC) to a GMX Improvement Proposal (GIP)

Phase 4 GIP Proposals

All GIP proposals will be submitted through an on-chain vote on Tally. GMX will implement an on-chain solution using Tally. Tally is a significant contributor to Arbitrum, and we chose to work with Tally based on their contributions to the Arbitrum ecosystem.

  • Voting strategy: simple majority (65% + 1 smallest unit of a token)
  • Quorum: TBD
  • The minimum amount of tokens required to propose: 25000
  • Voting period length: 5 days
  • Execution period: 48 hours
  • Cooldown period: None

Depending on the voter turnover and weight, the minimum amount of tokens required to propose can be increased.

Conclusion:

Launching an on-chain governance for GMX DAO represents a significant step towards decentralization, community empowerment, and innovation within the GMX ecosystem. By establishing a transparent and inclusive governance framework, we can use the collective wisdom and enthusiasm of the community to drive the continued success and evolution of GMX.

As the next steps we invite the community to share their thoughts and post community feedback we will be taking this through a snapshot vote.

14 Likes

Great update and proposal. This paves a clear path on how to continue the advancement of GMX under GMX Labs.

Will there be a delegate system in place or will it be down to individuals to participate in the voting process?

3 Likes

Like this a lot, feels well thought out and it’s time for the next step in Governance.

2 Likes

this is major changes. Will read through in detail and circle back.

2 Likes

Congrats to the GMX community on this proposed upgrade!

I wanted to take this opportunity to introduce myself. I’m Frisson, GTM lead at Tally. I’m also an active Arbitrum delegate and community member. Tally is thrilled to serve as the platform for Phase 4 GIP proposals and a governance partner to GMX. We’ve worked closely with the GMX team to ensure a great experience for GMX governance participants. Please feel free to reach out if you have ideas about how we can best support GMX governance going forward.

8 Likes

Very much looking forward to this structured approach for gov proposals.

2 Likes

10000 tokens seems a very high bar for a temperature check - that’s 500k USD of GMX owned if GMX is at 50 dollars. Will those who want a temperature check be able to pool their owned tokens towards that figure, through delegation or some other means?

1 Like

I support that one. It’s time to upgrade the Governance

3 Likes

i like this a lot, idea is amazing and will revolutionise and speed up GMX DAO. Fully pro

2 Likes

Thanks for helping GMX to reach ultimate goal of decentralization and on-chain governance. I have technical question and assume you are proper person to ask- GMX protocol and native staking operates on 2 chains currently and potently will be multichain deployment in the future. Do proposed governance framework on Tally can handle this multichain “mess”?

2 Likes

Nice to meet you, Saulius. Good question.

Tally is building a native integration with Wormhole that will make it easy for GMX tokens on any chain to vote in the DAO via the same Tally interface. This will be ready in ~2 months. I imagine a similar solution could be applied to staking as well.

It should be 5000 rather than 10000. It can’t just be a couple people starting all votes.

Nuggs isn’t it in total? So its a matter of getting other peoples support?

Question is if Snapshot delegation functionality will be implemented. If yes 10k voting power threshold is way too low. It should be 50k or even 100k to protect from spamming of proposals.

2 Likes

Excellent point Saulius.

1 Like

So I understand this, will there be a new governance token issued or everything will be based on GMX holdings?

New Gov token, but in sync with GMX+esGMX or GMX+esGMX+MP holdings.

1 Like