Validation with No Stakes Attached

The Tally Newsletter, Issue 104

Welcome back to the Tally Newsletter, your weekly source for DAO governance insights. I'm coolhorsegirl and I’m so stoked to be here. 🟣

Rollups need to safely and efficiently decentralize. Onchain governance is the answer. This week, we’re breaking down exactly why, with an explanation of Proof-of-Governance (PoG), a new standard exemplified by Arbitrum’s Security Council. This is an important one.

We’ve also got proposals for Public Nouns and Nouns, including one to sponsor a certain pizza party happening next week at ETHCC (count me in), along with a proposal for the retirement of Snapshot on PoolTogether. Let’s get into it 👇

🤿 Deep Dive: Validation with No Stakes Attached

To achieve credible neutrality over time, rollups need to decentralize. To decentralize, rollups need validators. But permissionless validators (like DPoS) can misbehave (resulting in user funds slashed), so rollups need some other version—something decentralized and permissioned. Thus, there’s only one way to safely decentralize: onchain governance.

Let’s break this down.

Enter Jon Charbonneau, a well-known voice for rollup decentralization. Right now, what’s common is Proof-of-Authority, a validation model that uses validators often chosen based on their reputation. Last week on Twitter, he suggested we swap out the term "PoA" for a more fitting "PoG" (Proof-of-Governance). PoG encapsulates the essence of a system where delegates are chosen through a governance process. It's not just about authority; it's about the process of governance that leads to that authority.

"Can’t users just stake to validate?" you say. Jon believes that most rollups should ditch staking. No more locking up tokens to support network operations. Instead, he's advocating for a system where governance elects delegates to run PoA (or rather PoG, since they’re elected) or a simple round-robin style system.

PoG isn’t just a traditional Delegated Proof-of-Stake (DPoS), though. In traditional DPoS, user funds can get slashed if delegates misbehave. In PoG, user funds are not at risk because they are not staked in the first place. If a delegate acts maliciously, user funds aren’t lost.

How’s PoG look in practice? Check out Arbitrum Security Council, 12 members who are elected by the members of the Arbitrum DAO through a democratic process responsible for addressing risks to the Arbitrum ecosystem. Arbitrum’s onchain governance model (on Tally!) ensures ethical and efficient PoG where all actions are transparent and immutable, that all members have an equal opportunity to participate, and all rules are enforced automatically and securely.

PoG—yet another case for onchain governance.

⌛️ Onchain Proposals

Onchain DAOs are decentralized autonomous organizations that operate entirely on the blockchain, using smart contracts and other blockchain-based technologies for their operations and decision-making processes. Tally believes that true DAOs operate onchain.

🚊 Public Nouns

Upe | Crowdsourcing hyperlocal community information in Latin America

Summary: Upe—a single, convenient place to aggregate and verify important information so that everyone can access it in developing nations—needs funding to iterate on their initial experiment (testing whether Upe is interesting to locals). They’re asking for 5 ETH to onboard the local community and to sponsor community activation events.

Voting ends: July 15th

Partnering to Launch QF on Giveth

Summary: Giveth is asking for a donation of 5 ETH to the matching pool of Quadratic Force in exchange for brand exposure, project contributions, and GIVbacks (up to 80% donation value back in GIV tokens). Public Nouns would be a founding member of the QF.

Voting ends: July 17th

PizzaDAO + Frens are throwing a Pizza Party for the People @ ETH CC 2023!

Summary: 0.75 ETH to sponsor PizzaDAO’s Pizza Party at ETHCC next week. Beers included!

Voting ends: July 17th

🟡 NounsDAO

Redefining Nouns-Powered Change with Mucho Love

Summary: 159,100 USDC + 1 Noun to continue funding Mucho Love, a Nouns-powered social impact platform, over the next 6 months. Some big progress already, more to come.

Voting ends: July 16th

⌐◨-◨ x Pudgy Penguins

Summary: In the effort of meshing two of the fastest growing brands in web3, this collab would mean a high-end toy collection on NTWRK with a percentage of profits going towards the purchase of a Noun to bring the Huddle into the DAO.

Voting ends: July 16th

🟣 PoolTogether

PTIP-87 Winding down the POOL pool Snapshot

Summary: The Snapshot hasn’t reached quorum since March 2022.

Voting ends: July 15th

🔒 Unlock

Switch Timelock admin role to the new Governor

Summary: Unlock is upgrading to a new version of the Open Zeppelin governor contracts to benefit from recent improvements. Get the whole story here. (This is cool!!)

Passed, awaiting execution

📝 10 Things To Read or Listen To

📄 “Decoding DAOs activity - The importance of a multidimensional data analysis” by sealaunch.xyz

📄 “‘This Protocol Is Brought to You By’: An Onchain Model for Web3 Advertising” by Mason Nystrom

📄 “Prophet Motives & Knightwork States” by Wassim Z. Alsindi

🧵 “DAOs are broken” by 0xSydney

🧵 “Away from working groups and toward domain-specific governance layers” by Chase Chapman

🎧 “Adding Spice to Venture Capital w/ Maya Bakhai” on Rehash

🎧 “Digiphysical goods w/ Nich Kesonpat” on On the Other Side

🎧 “Building an Equitable Ownership Economy: Insights from Dr. Corey Rosen on Employee Ownership and ESOPs” on The Ownership Economy

🎧 “How EIP-6968 will Change Web3 Incentives with Zak Cole” on GreenPill

🎧 ”Designing effective governance | Porter Smith” from a16z crypto

💫 DAO Talk: don’t DAObt me || DT weekly ep. 46

🤭 Meme of the Week

We’re going to ETHCC next week in Paris! Mark your calendars—Our CEO Dennison Bertram will give a talk on “The Hyperscale Public Infrastructure Thesis for DAOs” at 3:35pm on Thursday, July 20th on the Main Stage. (FOMO hitting? You can livestream it or watch the replay, no worries.)

If you want to meet up, let us know via Twitter DM. We’re excited to meet you.

~ coolhorsegirl 🐴

p.s.- I’M FULL-TIME AT TALLY! It’s been a long time coming, and I’m so happy to be here. This being my first week, I spent my last day of unemployment at a local farm in Bangkok. Look at all the bunnies!