[Proposal] Reduce the Minimum ANC Voting Deposit

Community Initiatives
1

In the same spirit as Terra Prop 137:
TLDR:

  • Current ANC voting deposit amount discourages decentralization and active community involvement in governance especially when compared to other Terra projects and Terra governance itself.
  • Propose lowering ANC Voting Deposit to 100 ANC.

Proposal

To initiate an on-chain governance vote on Anchor, the proposing party or parties must submit a minimum deposit of 1000 ANC collateral. At current prices, 1000 ANC is equivalent to roughly $3,100, precluding many users from initiating potentially net-positive, successful governance votes since the at-risk value cost if the proposal fails is simply too high.

For context, Mirror protocol’s on-chain voting deposit is 100 MIR, approximately $270 at the time of writing. In comparison, Mirror has many more on-chain governance polls and active community involvement in governance, granted the more dynamic nature of the project and the fact it’s older. However, the deposit value is a factor in encouraging/discouraging community involvement in a project. For example, if Mirror had a similar voting deposit as Anchor of 1000 MIR, then only the top 241 wallets holding MIR would be able to participate in on-chain governance according to the Luna Richlist.

Assuming a similar token distribution as MIR, the 1000 ANC deposit limits only the top few hundred wallets to propose new governance polls and half those wallets would be putting a majority of their ANC holdings at risk if one was proposed. (Note: this is a large assumption but not huge given the similarities in price of ANC and MIR and both being TFL projects)

After the execution of Terra Prop 137, both Mirror and Terra itself will have lower value on-chain voting deposits than Anchor. Prop 137 lowers the Terra voting deposit minimum to 50 Luna, approximately $2,200.

Thus, I propose lowering the minimum ANC voting deposit to 100 ANC.
Please welcome open discussion on the exact ANC amount this should be lowered to.

A lot has been said in recent by @ryanology045 and the rest of the Anchor team about the failure of the current Anchor governance system to facilitate active community involvement. This proposal should be a part of that conversation.

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Full disclosure: Ironcially, I don’t even have 1000 ANC to submit this proposal as a poll. I would need the Anchor team to sponsor me. This is true for my other proposal too. I noticed this is a trend for most community driven proposals on this forum.

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I would personally provide 250 ANC towards an on-chain vote. We just need as a community for 3 others to provide the same amount and we can get this done. How we go about providing the ANC from multiple wallets, in order to achieve the 1000 ANC deposit to initiate the vote, is the next question.

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I am in support of this proposal too.

We still want to block spamming and junk props. So let’s try to come together and figure out what that level might be.

I see 100 has been proposed. What are other people’s thoughts on this?

Also, we need to drum up some more support so we can ensure this is going to pass. I’ll see what I can do from that end of things.

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Maybe we could try out 250 or 500? That is roughly $1000 and $2000 respectively.

We could also incentivize voting by doing what Kujira does, giving a set amount of tokens to voters. That way people who stake ANC governance tokens would also be incentivized to be involved in Anchor’s development.

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I agree. It seems worthwhile to increase participation and accept the risk of low value proposals. If/when the community participation is higher, if low quality proposals are a problem, then, we can nerf the amount required.

It seems people like to contribute together. Is it possible to have a mechanism to crowdsource ANC to propose votes?

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Looking at getting a proposal for this very soon.

I think crowd-sourcing is a cool idea, but if we lower the amount probably won’t really be needed.

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Looks like someone has put up a proposal for this.
this might get disrupted by a upcoming proposal here - https://twitter.com/stablekwon/status/1469093090434555908

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@PFC Correct me if I’m wrong but the tweet proposal by Do you referenced doesn’t sound relevant to this proposal about reducing the ANC deposit amount for an on-chain governance poll.

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Thanks for your suggestion.

However, I think anything higher than 100 ANC would be unreasonable. Here’s why:

The main risk for lowering the ANC deposit amount is spam risk or low value proposals (as mentioned above by @xwdx and @bitn8 in the AMA). Using Mirror as an example, even at 100 ANC the voting deposit would be higher than the 100 MIR for Mirror protocol since ANC has traded higher than MIR for some time now. Mirror does not have a spam issue despite its lower deposit. It also has a much more active community involvement in governance with a #proposal discord channel that @here’s each time a new proposal is announced.

Anchor has only had nine proposals in its brief history, none of which have been rejected. We should not have a high deposit amount be the filter for quality proposals. Let the community and governance decide what is a quality proposal. We can do all the AMAs, twitter polls, and forum proposals we want but we can never gauge true community sentiment without low barrier on-chain polls.

I would also argue that it may be worth denominating the deposit amount in UST rather than ANC so we don’t have to keep proposing this as the price of ANC goes up.

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it’s not relevant, only that it will occur at the same time.

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This, maintain 1000 ANC. and allow others to contirbute.

You don’t want those that invested only a small amount making proposals.

Those that take risk through investing so they have skin the game. I disagree with lowering barrier. Since ANC price will change, maybe tie amount to specific UST value?

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I agree with you about switching the deposit to UST from ANC.

Your other argument for keeping a high barrier to voting participation doesn’t make sense to me.

On the one hand you are against smaller investors participating in governance proposals; yet on the other hand, support small investors making proposals if they crowdsource their deposit. If it’s a bad proposal, let governance vote it down. Larger investors with “skin in the game” already have a greater say in governance due to their proportionally larger voting power. Why should wealthy investors be the only ones to propose?

Even if you had “skin in the game”, why would you want to risk a majority of your ANC for a single governance vote that may not even benefit you? There is very little reward for having a governance vote pass. As I mentioned in the proposal, if this were Mirror only the top 241 wallets have >1000 MIR and most would be putting most if not all their MIR at risk for a proposal.

The main purpose of the deposit is to prevent spam, NOT to filter out who should be able to vote. Once again, 1000 ANC is greater than both the Mirror deposit and the Terra blockchain’s governance itself. Both of which do not have spam.

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I’d like to use Prop 177 from Mirror as an example of the dangers of a low deposit, Prop 177 seems to be a scam proposal on the verge of passing, someone trying to send a portion of the community pool to “burn” when it’s actually what seems to be a wallet address.

Governance is a tricky business, we see this in our local democracies (assuming you don’t live under a different regime), people won’t always vote with the common interest in mind and most of the time they won’t even be informed to vote, make it easy for anyone to launch a proposal and you might have bad decisions being made simply because voters decided to vote without understanding. Now, Mirror is worse off because governance is incentivized, but this is a real danger that should not be ignored…

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​​@NightWatch - this may be a more interesting idea.

Pooling assets with other users to meet a minimum voting deposit is quite powerful and incentivizes proposals that appeal to the whole community - not just one individual.

Dropping the minimum deposit to 1/10 seems dramatic - how can we create a mechanism to allow users to provide their assets in support?

I will mirror this interesting solution below:

@bradley If the current price of ANC (1000 * 3.54= $3540) is too much, would a fixed UST of value, ideally a bit lower, be more favorable?

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Yerp, keep it high.

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I prefer tying the ability to propose to a UST value amount of ANC over using UST to vote. As a community we should act using our native token.

Since reading the other comments here, I’ve learnt how important it is to prevent spam proposals and get high quality governance.

I wonder, is there a “time staked” mechanism we can use here to enable and incentivise true community members to participate? In this way someone who has staked for longer but owns less ANC can propose.

Bear in mind, this “time staked” mechanism assumes that having ANC staked for longer means they are less likely to be malicious when voting.

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Mirror Prop 177 is not a reason to keep the deposit high. Governance did its job and overwhelmingly voted NO on the proposal. The low deposit on Mirror allowed for Prop 178 and Prop 179 bringing attention to the malicious intent of Prop 177.

A high deposit does not prevent malicious proposals. This could easily have been proposed with a high deposit amount assuming the reward would be higher than the deposit risk.

Once again, the voting deposit is used to prevent spam. This case wasn’t spam. Mirror community isn’t swamped with worthless polls that never reach a quorum and Anchor rarely gets polls given it’s only had 9. Let governance do its job.

People arguing a high deposit would rather have no polls than have a minority of bad ones be struck down by governance.

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Let’s keep it real. The overall Anchor and Mirror communities are very susceptible to getting scammed. Prop 177 would have passed without some tweets from Larry and Do. The Anchor community voted in its first proposal to give Harpoon 22,000 ANC which they then used to create a bot to front run users of the Harpoon UI, which had little to no chance of succeeding. It was obvious as hell that Harpoon wasn’t going to succeed from the get go and we saw an overwhelmingly positive response from the community to give funds from the community pool away like candy. There were only 3 paths forward for Harpoon after receiving 22,000 ANC from the community pool. 1: Rugpull, 2: Hopelessly and tirelessly try to beat bots with by building a UI for users or 3: Use the funds to profit in another way (like build a bot to frontrun Harpoon users). To their credit, they went with option #3. To some extent, they also did #2.

Now Harpoon has rebranded as Kujira as Anchor moved to a liquidation queue methodology and we see unbridled enthusiasm for a DApp that is just a UI on top of the Anchor liquidation queue. Kujira is a far better product than Harpoon, but the fact is the Anchor community gave away 22,000 ANC to a group that created a bot to frontrun the product they built and refuses to address this reality.

The cost of proposing governance votes on Mirror and Anchor need to be MUCH HIGHER to protect the community from themselves. If it took 100k worth of ANC to start a governance proposal, it’s a lot less likely that a bad protocol/scammer would be willing to risk that amount of money to put forth a silly/scammy proposal up for a governance vote.

If we do NOT raise the cost of proposals, I suspect we’ll see more people follow the model of Prop 177 (or Harpoon) but now also throw in 100 or 1,000 legitimate proposals around it to try to hide their scam proposal. We can’t rely on the community right now to intelligently vote. It’s an unfortunate reality.

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While I try to stay as unbiased as possible on this issue, the core idea of community funds being taken without relevant work put forward is a valid concern that I agree with. However, I think is a separate issue from the poll amount required. Having a higher amount doesn’t necessarily stop people from trying to take community funds without completing the work. If they have a big enough budget to convince the community to vote then they can certainly buy enough ANC to get a poll pushed through.

I think this core issue is why we need a new gov structure that funds projects based on KPI bonding curves, I.e. only when work is shown over intervals and not all once, with a time lag for the last payment that could be the biggest payment. We can go deeper on that another thread because I think it’s a huge issue that needs to be addressed.

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