[AGIP-6] Enabling onchain governance for AGLD DAO with Llama

Enabling on-chain governance for AGLD DAO with Llama

It has been more than 12 months since the last proposal on AGLD tokenomics passed on Snapshot. Very quickly afterwards, the implementation of tokenomics was ready on the code level - already audited and ready to launch - and was just pending multi-sig proposal.

Reaching out to all the multi-sig holders took way longer than we expected due to all kinds of concerns, especially the legal ones for each individual multi-sig holder given how widely distributed the $AGLD token has been. To avoid the friction in future implementations and treasury allocation, migrating from multi-sig to on-chain governance is crucial. After implementing the latest tokenomics design, the AGLD DAO will take a more hands-on role in incubating the Loot Chain ecosystem. We have exciting plans ahead on how to incentivise FOCG/AW developers and ultimately incentivise the Lootverse. It’s impractical to have every single decision going through the multi-sig. We have to restructure our smart contracts in a more flexible way while still maintaining the same level of security, hence onchain governance.

It’s also a natural move since AGLD has always been community-governed. Discussions are held in community group chats across Loot & AGLD discord as well as in the Loot Talk forum during the early days. Proposals are made and voted on Snapshot. The main bottleneck is that the token’s smart contract has been relying on the multi-sig since its inception.

Onchain governance infrastructure has made a ton of progress in the past two years since AGLD’s inception, and we feel like now it’s approaching a more mature stage where communities like AGLD can trust these platforms on security as well as scalability. Onchain governance platforms such as Llama, Tally, and Commonwealth have been trusted by dozens of projects.

In this proposal, we propose a new smart contract structure tightly integrated with Llama. Llama is a full-stack platform for on-chain governance and access control. By partnering with Llama, the AGLD DAO will be able to securely implement token governance, on-chain roles, and treasury management without writing a single line of code. The team behind Llama is very experienced with how DAOs are built and run. They’ve previously contributed to Nouns, Aave, Uniswap, Lido, Maker, and ApeCoin. Protocols like Boost (formerly Rabbithole), Rio, and River are using Llama for onchain governance. Many teams have commented on how useful and powerful Llama is (1, 2, 3, 4). We believe Llama will be a huge value add to AGLD and a trustworthy partner the AGLD community can rely on.

Note that Llama’s smart contracts are open-source, permissionless, and have been audited 4 times. AGLD will always independently own and control its instance.

Our proposed smart contract architecture:

  • AGLD ERC20 token contract

    • This will be a standalone contract, managing the AGLD token, including the mint / inflation function.
      • Note that the AGLD token is currently not an ERC20Votes token. A wrapper contract will be built, which allows token holders to wrap their AGLD token to participate in governance.
  • Staking contract

    • Manage the non-custodial staking reward to Lootverse NFTs.
      • Calculate the rewards
      • Manage the reward pool
      • Claim rewards
    • This contract will be permissioned and governed via the Llama system. There may be additional staking actions such as including other NFTs for incentivisation.
  • Treasury

    • Manage the AGLD treasury (e.g. pay for developers, incentives, costs of the DAO, etc.)
    • Llama enables AGLD to have multiple accounts, each with different rules and permissions for how funds can be transferred. For example, the main DAO holdings treasury will require a token holder vote whereas DAO rewards and DAO grants will be managed through sub-accounts with quicker approval processes.
    • The treasury will be divided into multiple tiers of accounts as follows:
      • DAO Holdings
        • Largest account, distribution to DAO Budgets.
        • Requires onchain AGLD voting to transmit
        • Transmission is not periodical
      • DAO Budgets
        • 2nd largest account, distribution to DAO Rewards and DAO Grants.
        • Requires onchain AGLD voting but a lower quorum
        • Transmission on a monthly or quarterly basis
      • DAO Rewards
        • Small account, reward for developer contribution and activities on the Loot Chain
        • Requires DAO rewards commitee to approve fund transfers
        • Transmission on a weekly or monthly basis
      • DAO Grants
        • Small account, reward for additional DAO contributors
        • Requires DAO grants commitee to approve fund transfers
        • Transmission is not periodical

Llama is able to provide a full suite of tools that can support the above structure. This includes:

  • Governance contracts to encode access control rules, voting strategies, and key governance parameters
  • Interface for token holders and contributors to create, vote on, and execute onchain actions
  • Non-custodial accounts to manage funds and set granular rules for token transfers
  • Ability to add custom voting strategies for specific functions without writing custom contracts. Examples include optimistic voting strategies and emergency vetoes.
  • Ability to add custom roles (including roles that expire on-chain) without writing custom code

Here is a screenshot of what the UI would look like:

We welcome feedback & suggestions about all of the above from the community. This proposal will be a formal Snapshot proposal after the 3 week discussion period. Upon passing on Snapshot, the AGLD DAO will be working closely with the Llama team to specify the exact implementation. We hope this detailed plan can launch soon so we can finally begin to fulfil our mission: grow the Lootverse.

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Just wanted to introduce myself - I’m Shreyas, a cofounder at Llama! I’ve been a fan of AGLD and we’re excited to contribute to the community during this next phase where we enable onchain governance. Happy to answer any questions!

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I think this is long over due and the key step for fully decentralized and censorship resistant community driven project

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Moving beyond multi-sig to on-chain governance makes a lot of sense for AGLD DAO since it is a digital-native organization. Looking forward to seeing a more nimble direction in the future!!

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The more decentralized of the community and all holders participating to the community events will drive the loot development. Every holders matters.

I agree with the overall direction of where the DAO is heading. Decentralization is something of a value that we must preserve, but needs careful calibration to truly achieve the goal. I think we are stepping toward the right path.

One thing I would like to add to this proposal is the comparison of different platforms other than Llama. We should not rush into things, and choose the most appropriate option for our organization. If we could list up some of the key features we need, I will spin up a table comparing Llama with other onchain governance tools

I thinks interesting
The governance here needs to be further updated and progressed.
For more AW!

WOW, Pretty cool. Let’s GOOOOO

LLama seems to be the best option so far. The team are helping AAVE Compound for their onchian governance and have very legit backer

120% agree on this! Thanks for putting this together

I second this too. I have a friend who used Llama on their project and have heard good feedback on their features and especially support