The Delegate's Handbook: A Primer on the Council Model
Introduction
Within the governance structure of the Arbitrum DAO, delegates are the linchpin, entrusted by token holders to make informed decisions on governance proposals that may arise from time to time (most recently, in relation to the Arbitrum Short-Term Incentives Program).
For optimal representation, a delegate’s foundational step is to comprehend the DAO’s Constitution (refer: https://docs.arbitrum.foundation/dao-constitution). Among its varied provisions, the amended constitution of the Arbitrum DAO does a great job at outlining the role and decision-making conduit that prospective and current delegates should abide by and strive to embody.
Effective communication with token holders is imperative, necessitating an open channel for updates, inquiries, and feedback, bolstered by an active presence in Arbitrum’s community discussions and events. Transparency and accountability in motivations and decisions are non-negotiable traits for a delegate, ensuring trust and credibility. Moreover, a robust support system, cultivated through strategic relationships and a competent team, is deemed to be instrumental (albeit, not necessary) for a delegate’s informed decision-making, resulting in a potent delegate platform. Delegates should endeavour to achieve a balance between adhering to the DAO's governance framework, maintaining a dialogue with token holders, and fostering a strong community rapport, all underpinned by a transparent and accountable approach. Through these measures, a delegate not only amplifies their effectiveness in the governance and decision-making processes but also resonates with the broader ethos of the Ethereum community, thereby fulfilling their cardinal role in the Arbitrum DAO's ecosystem.
The above is all well and good in theory however, how does one aim to apply these principles of optimal representative governance in practice? To answer this question, we shall be assessing the implementation of these principles as adopted by the Trader Joe Governance Council during the course of the Arbitrum Short-Term Incentives Program.
The Council Model
The prevailing paradigm in delegate programs characterizes a 'delegate' as an individual vested with the authority to execute voting decisions on behalf of their respective delegators. While this holds true for a majority of current delegates, there is a burgeoning trend of delegates operating in a collective capacity, through forums such as committees or councils. This is becoming more commonplace among larger delegates encompassing project teams, venture capitalists, and research & analytics firms.
In light of the Short-Term Incentives Program (STIP), Trader Joe inaugurated the 'Trader Joe Governance Council,' a collective of community members and contributors, aimed at achieving a synergistic approach to ensure comprehensive participation in all STIP-related proposals (https://twitter.com/blueclarityone/status/1702718385270726822).
The adoption of a council-based model for participation in governance frameworks as a delegate has several benefits, as delineated below:
Diverse Perspectives: Councils aggregate individuals from varied backgrounds, bringing a diverse set of experiences and expertise to the table. This diversity is instrumental in fostering a holistic assessment of proposals, guaranteeing a multi-faceted evaluation. By way of a minor example, the Trader Joe Governance Council has members with some of the following backgrounds (Legal, Finance, Product Structuring, Marketing, Technical).
Mitigated Bias: The potential for personal bias to affect the decision-making process is significantly heightened when proposals are evaluated by a single individual. Conversely, the eclectic makeup of a council acts as a counterbalance to individual biases, ensuring a more equitable evaluation and selection process.
Dispersed Responsibility: A council distributes the onus of decision-making among multiple individuals, thereby diluting the pressure that might otherwise be concentrated on a singular individual. This, in turn, facilitates a more meticulous and less stressful review process.
Credibility: The collective judgment emanating from a council is often perceived as being more credible and well-considered compared to the potentially capricious decisions of an individual.
Enhanced Decision Quality: The dialogue and deliberation inherent in a council setting often unveils potential challenges, opportunities, and ramifications tied to each proposal that might elude a single reviewer. This collaborative discourse typically culminates in more informed decision-making.
Resource Optimization: A council model allows for the equitable distribution of workload, particularly applicable when faced with a shorter deadline and a high volume of proposals to review. This is a significant value proposition.
Documentation and Record-Keeping: Councils generally adhere to structured protocols for cataloging discussions, evaluations, and decisions. This archival process is invaluable for purposes of accountability, learning, and future reference.
Council-based procedural mechanisms
In our analysis, we've identified the council-based model as being optimal for delegate operations, particularly regarding proposal assessment and voting. The Trader Joe Governance Council exemplifies this approach, having informally implemented best practices and procedural mechanisms that align with its ethos and principles, thereby ensuring accurate voting outcomes.
Principle-Driven Harmonized Assessment
The establishment of a harmonised principle-driven approach is crucial. It ensures alignment among council members regarding the evaluative lens applied to proposals. Given the natural diversity in personal preferences among delegate council members, this harmonized approach is instrumental in achieving a uniform assessment that is in consonance with Trader Joe's core values.
Engaged Analysis Pre-Voting
Upon reviewing and assessing proposals, a critical step before final decision-making involves active engagement with the proposers. This phase serves as an initial filter to ascertain the proposal's alignment with the delegate's ethos, its potential value-add to the ecosystem, and the project's compatibility with the incentive program's objectives.
In accordance with the above, the Trader Joe Governance Council organised pitch sessions, inviting all applicants to present their proposals in a 10-minute call. These sessions provided a platform to address key questions, such as:
The amount of ARB requested
Core objectives of the grant
Justification and efficient utilisation of the grant
Key value propositions of the product/platform
Potential benefits to Arbitrum
Necessary changes for incentive integration
These pitch sessions have proven to be a net positive for the Council, creating a conducive environment for in-depth discussions that, in some instances, led to a revision of the Council's preliminary voting stance on certain project applicants.
Conclusion
In conclusion, as we navigate the intricate landscape of the Arbitrum DAO's governance processes, it is paramount for delegates to be the beacon of informed and principled decision-making. This involves not only a comprehensive understanding of the DAO's Constitution but also establishing open channels of communication with token holders, and ensuring transparency and accountability in their actions. Moreover, the value of a robust support system and a competent team cannot be overstated in facilitating informed decision-making.
Through our detailed examination of the Trader Joe Governance Council during the Arbitrum Short-Term Incentives Program, we have underscored the efficacy of the council-based model for delegate operations. This model not only brings together a diverse range of perspectives, reducing individual bias and enhancing decision-making quality, but also allows for efficient resource utilisation and a structured approach to documentation and record-keeping.
The Trader Joe Governance Council's principled approach hopefully sets a precedent for other delegates in the ecosystem. This case study serves as a testament to the potential of the council-based model in achieving optimal representative governance in practice, thereby contributing to the flourishing of the Arbitrum DAO's ecosystem and aligning with the broader ethos of the Ethereum community.