1
Introduction
This bluepaper is meant to introduce the evolution of the Metis Governance on the path to community governance implementation.
Metis Foundation aims to establish a decentralized and reputation/contribution-based governance structure to address the challenges and limitations of the current token-based voting systems in blockchain projects. This bluepaper presents the decentralization governance principles and outlines governance categories, rules, and proposal and voting process.
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Governance Participants
2.1 Community (Token Holders)
Token holder governance rights/liabilities
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Community members can submit any type of proposal.
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The token holder can vote on any proposal. Metis Governance is using a Quadratic Voting mechanism.
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The accepted proposal will be accompanied by a Snapshot poll or other methods as determined according to the governance process for the particular proposal type (i.e. a community member with a minimum threshold of METIS (e.g., 0.01% of the total METIS active supply) can vote).
2.2 Portfolio Companies
Portfolio Companies are separate business entities that contribute to the overall Metis ecosystem and serve as the building blocks of its future growth. Portfolio Companies is addressing core infrastructure needs for the Metis ecosystem and as such is a vital part of the ecosystem. As the long term stakeholders, they are responsible for making critical decisions and implementing approved proposals, as well as ensuring the ecosystem's sustainability and growth.
Portfolio Companies governance rights/liabilities
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Portfolio Companies act as advocates for the interests of the Metis ecosystem.
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Portfolio Companies are implementers of the passed proposals. They can delegate implementation to the 3rd party but ultimately it is Portfolio Companies who is accountable and responsible for the implementation.
2.3 Governance Working Group
This working group consists of representatives from different Portfolio Companies. However, upon the maturing of the governance process and fully implementing community governance, this working group would consist of individuals appointed by the community.
Governance Working Group governance rights/liabilities
Governance working group works as the administrator for the whole governance structure, monitoring the operations, making necessary decisions to facilitate the implementation, collecting feedback from the community and proposing changes.
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Proposal Types
Proposals will be categorized based on their scope and impact, such as Governance Proposals, Ecosystem Proposals, Infrastructure Proposals, or Emergency Proposals.
3.0.1 Governance proposal
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Modifies the Metis governance structure or procedures.
3.0.2 Ecosystem proposal
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Proposals focused on introducing new projects into the Metis ecosystem, such as Community Verified Projects (CVP).
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Proposals that do not fall under the Governance type, including funding requests, informational proposals, or collaboration with other projects.
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A quorum requirement of
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10k METIS tokens
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>=500 addresses participation
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>80% approval vote to pass
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Requires Portfolio Companies review for potential grants or investments and implementation planning after the vote passes.
3.0.3 Infrastructure proposal
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Proposals focused on Technical implementations, Security vulnerabilities, Network infrastructure upgrades, and other infrastructure-related fixes.
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Infrastructure proposal - LSD (Liquid Staking Derivatives)
Metis Liquid Staking Blitz (LSB) is an initiative focused on accelerating the growth of LSDs and LSD-focused products on Metis, leveraging the 4.6M METIS Ecosystem Development Fund.
Metis Liquid Staking Blitz (LSB) is an initiative focused on accelerating the growth of LSDs and LSD-focused products on Metis, leveraging the 4.6M METIS Ecosystem Development Fund.
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Infrastructure proposal - Sequencer
The integration of our upcoming Decentralized Sequencer Pool with the existing decentralized peer-to-peer network of Verifiers and Block Producers represents the final stride toward achieving the ultimate decentralization of our L2 network. Once the sequencer pool is operational, all network participation will be decentralized, allowing for a seamless and secure rotation of sequencers.
The integration of our upcoming Decentralized Sequencer Pool with the existing decentralized peer-to-peer network of Verifiers and Block Producers represents the final stride toward achieving the ultimate decentralization of our L2 network. Once the sequencer pool is operational, all network participation will be decentralized, allowing for a seamless and secure rotation of sequencers.
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A delay between the vote and implementation (4 weeks window) to allow for emergency fixes, in case something goes sideways.
3.0.4 Emergency proposal
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A security breach or other urgent situation.
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For Emergency Proposals, the Governance Working Group has the sole right to make decisions to safeguard the ecosystem and keep the efficiency of implementations in case of emergencies.
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Community Proposal Voting Process Flow
In terms of governance processes, we plan to implement a multi-tiered system that includes both community-led and core infrastructure-led decision-making processes. This would involve a mix of on-chain and off-chain governance mechanisms, such as yet-to-be-defined reputation/contribution-weighted voting and community forums, to ensure that decisions are made with the input and consensus of all stakeholders.
Figure 1: Proposal submission and voting process
Quadratic Voting Strategy is adopted by Metis Governance:
4.0.1 Proposal Submission Process for Community
A member of the community drafts a clear, concise, and detailed proposal, outlining the issue or improvement they want to address in the Metis ecosystem.
The proposal should use the structure relevant to the type of the proposal. As an example, the Community Verified Projects (CVP) proposal uses the following template:
## Introduction
## Value Proposition
## Uniqueness Factor
## Benefits for Users
## Benefits for Metis Ecosystem
## Media
## Roadmap
## Summary
## Official Links: Website, Docs, Audits, etc.
The proposal can be further tagged to classify the proposal using suggested categories on the Metis governance platform such as:
Defi; liquidity; stake; farm; cross-chain-tranfer; vault; nft-trading-system;wallet; cross-chain; mip;mint; dex;minting; defi-explorer; exchange; launcher; launchpad; lending; swap; sequencer
Once the proposal is complete, the member of the community submits it through the designated Metis governance platform (ceg.vote), where it becomes visible to other members and Portfolio Companies.
4.0.2 Voting Process for Community
Phase 1: Temperature check (optional but recommended)
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The proposal is suggested on the public forum where it is discussed/debated.
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If a proposal fails the temperature check, it should not be submitted for a vote. If a proposal fails the temperature check or has not undergone a temperature check, voters should consider voting to reject it.
Phase 2: Formal proposal and call for voting
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The proposal is submitted through the Metis governance platform.
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After a configurable amount of days, a voter distribution Snapshot is taken, and the voting period begins (Phase 3).
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The accepted proposal will be accompanied by a Snapshot poll or other methods as determined according to the governance process for the particular proposal type (i.e. a community member with a minimum threshold of METIS (e.g., 0.01% of the total METIS active supply) can vote).
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As a recommended guideline, the proposal should include an abstract, motivation, rationale, key terms (optional), specifications, steps to implement, timeline, and overall cost.
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For resubmitted proposals, include a link to the original proposal, reasons the original proposal was not approved, changes made, and why it should now be approved.
Phase 3: Community vote on proposal
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The poll runs for a configurable amount of days.
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During this phase, the community will vote on the submitted proposal.
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If the proposal passes among the Community, it moves to the Portfolio Companies (if required).
4.1 Governance Working Group Proposal Process Flow
As described in the rights and liabilities of the Governance Working Group, the members of the working group will discuss with key stakeholders and make decisions for the community passed Governance Proposals and Infrastructure Proposals. For Emergency Proposals, the Governance Working Group has the sole right to make decisions to safeguard the ecosystem and keep the efficiency of implementations in case of emergencies.
4.2 Defining a passed or rejected proposal
A proposal is considered passed if it receives the support of a predefined majority among entities eligible to vote (e.g., a 50%+1 majority, a two-thirds majority, or another predetermined threshold).
A proposal is considered rejected if it fails to reach the required majority among entities eligible to vote.
The criteria for passing or rejecting a proposal may be changed in the future, and the changes will need to go through the Governance proposal.
4.3 Outcomes for passed and rejected proposals
If a proposal is passed, the responsible Portfolio Companies will work on implementing the changes outlined in the proposal if needed. They will collaborate and coordinate resources to ensure successful execution, with oversight from the Metis Foundation.
If a proposal is rejected, the Community member who submitted the proposal has several options:
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They can revise the proposal based on the feedback received during the discussion periods and resubmit it for consideration in a future voting round.
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They can withdraw the proposal if they believe it is no longer relevant or feasible.
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They can engage in further discussions with the Community to gather more support and potentially resubmit the proposal at a later time.
This revised process ensures that proposals are thoroughly reviewed and voted upon by both Community and Portfolio Companies before implementation, allowing for a more robust and democratic decision-making process.
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Implementation by Portfolio Companies
Once a proposal is approved, the responsible Portfolio Companies will implement the changes if needed.
Portfolio Companies will collaborate and coordinate resources to ensure the successful execution of the proposal.
Metis Foundation will oversee the implementation process and provide support as needed.
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Governance rules
Governance rules will be defined collaboratively by the Community and Governance Working Group and changed by submitting Governance proposals. These rules will include guidelines for the proposal and voting process and the roles and responsibilities of the Community, Portfolio Companies and Governance Working Group.
Governance Working Group will retain a veto right on decisions that could negatively impact the Metis ecosystem until decision-making power is fully ceded to the community.
A more detailed roadmap for ceding decision-making power to the community over time will be developed. It will include specific criteria and milestones that must be met before the Metis Foundation will relinquish veto rights, as well as a timeline for achieving these goals. Metis Foundation is committed to decentralization and transparency in this process and involves the community in decision-making at every step of the way. With potential challenges and risks associated with full decentralization, we would like to take time to develop strategies for mitigating these issues and do not intend to rush them in.
Finally, to ensure the efficiency of governance, we look to best practices in government governance and implementing mechanisms such as checks and balances, transparency, and accountability. This would help prevent any individual or group from having too much control or influence over the ecosystem's decision-making processes and in the future allow us to pass the governance to the ecosystem making it fully decentralized:
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Separation of powers: Clearly define the roles and responsibilities of the different stakeholders in the ecosystem to prevent any one group from having too much power or influence.
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Checks and balances: Establish a system of checks and balances to ensure that no one group or individual can unilaterally make decisions or take actions that could harm the ecosystem. This includes requiring the community and Portfolio Companies to approve proposals relevant to them based on the proposal types.
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Transparency: Ensure that all proposals, discussions, and decisions are transparent and open to public scrutiny. This includes publishing all proposals and their associated documentation on a public forum, following proposal submission and voting processes, and creating a public dashboard to track the progress of proposals.
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Accountability: Establish clear rules and guidelines for how stakeholders should conduct themselves, and hold them accountable if they violate these rules. This includes creating a code of conduct and a system of penalties or fines for rule violations.
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Regular audits: Conduct regular audits of the ecosystem's infrastructure, governance processes, and financial transactions to ensure that everything is functioning as intended and there are no security or compliance risks.
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Continuous improvement: Continuously review and improve the ecosystem's governance policies and processes based on feedback from stakeholders and best practices in decentralized governance.
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Scalability
As the Metis ecosystem grows, governance processes and structures may need to adapt to accommodate more participants and complex decisions. Potential challenges include maintaining transparency and inclusivity while increasing the number of participants and ensuring that decision-making processes remain efficient and effective. To address these challenges, the governance framework should be designed to be modular and flexible, with the ability to add or modify components as needed. Additionally, ongoing communication and feedback loops between stakeholders will be essential to ensure that the governance system remains responsive to the needs of the community as it evolves.
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Conclusion
Metis Foundation's proposed governance structure aims to create a more decentralized system that addresses the challenges of current token-based governance in blockchain projects. By empowering the Community to contribute to the growth and development of the Metis ecosystem, Metis Foundation seeks to establish a more inclusive, democratic, and accountable governance model that aligns with the values of web3 and decentralization.
