During HiveFest 10 in Kuala Lumpur, a group of long-time Hive witnesses, developers, and DHF stakeholders gathered for a round-table discussion on how to make the Value Plan and Hive DAO spending process more efficient and explore ways to limit the outflows from DHF projects as well as encourage vastly improved KPI reporting and expectations from projects that are funded from the DHF.
The discussion focused on DHF stakeholders publishing clear criteria with which they will vote on proposals, focusing on improving reporting standards, and encouraging witnesses and stakeholders to share and collaborate on their own funding principles publicly — all to make the system more predictable, fair, decentralized and provide a practical way to better control outflows from the DHF by increasing reporting expectation, and implementing more stringent requirements on what is funded.
Another area of focus was on creating a more stringent criteria for funding for Value Plan so that spends above a certain threshold have more stringent voting rights, and an understanding that a general cap to individual Value plan spending will be introduced. Above a certain spending limit a 2 out of 3 or a 3 out of 3 voting mechanism was suggested where the 3 voting candidates are rotated after a period of time. It was also suggested that any spends above the Value plan spending limit should be submitted as separate proposals in the DHF.
With these changes, it should be considered that Hive move to a period of relative austerity. The implementations should be monitored to verify that the chain’s new token issuance into the economy reflects this state and adjustments made if outflows from the DHF remain high relative to the size of the economy.
While Hive has programmatically reducing inflation for the rewards pool, the DHF issues HBD into the economy with more social nuance in order to create more reliable, stable payments to funded projects and so is not programmatically reducing over time like the rewards pool. This means that the community itself should carry out its own due diligence to make sure that the release of DHF funds into the economy are inline with the size of the Hive economy. The intent is that the actions documented here create the tools and changes of culture required to make this happen.
NOTE: These minutes are meant as an initial guide and to sort discussion, input and participation from the community. Please feel free to comment below and add, debate rational for criteria and variables discussed here in
Who Joined the Discussion
Attendees:
@Gandalf • @Sorin.Cristescu • @Vaultec • @LordButterfly • @CrimsonClad • @Blocktrades • @Detlev • @Arcange • @Stoodkev • @RoelandP • @Starkerz • @Engrave • @Clayboyn
Key Topics & Outcomes
1. Publishing Witness & Stakeholder Voting Criteria
One of the strongest action points was a call for large stakeholders and top witnesses to publish their individual DAO-voting criteria for project proposals to meet.
By making their principles public — why they support or reject certain proposals — they help the community understand the rationale behind votes and reduce assumptions about “back-room consensus.” They also vastly increase the threshold of expectation which projects must meet in order to obtain DHF funding.
An example of a Stakeholder's DHF voting criteria might be that they publicly state that if Hive is below a certain market cap (80 Million USD for example), then they will ONLY support DHF proposals below a total spend of X thousand USD per quarter, that report strict quarterly KPI targets which are included in the proposal such as number of users onboarded or number of active users.
Another example may include a minimum total Return on Investment or a that stakeholders will refrain from voting proposals for a minimum time period after a proposal has been be submitted.
This transparency will:
- Set very clear, regular reporting and KPI expectations for all projects seeking funding
- Provide a soft social consensus criteria for limiting DHF outflows
- Allow Hiveans to regularly communicate the progress and achievements of projects wider crypto and investment community
- Encourage more predictable funding expectations for proposers.
- Allow healthy debate and accountability on governance philosophies for funding by community members for both projects and voting stakeholders.
- Allow for stakeholders to collaborate and improve on what they expect from proposals.
- Build additional trust and accountability between voters, proposers, and the broader community.
TODO: Share a voting criteria template (
2. Clear Criteria for ValuePlan Tiers
- Participants agreed that ValuePlan budget releases should be managed by a committee of 3 members with either a 2 out of 3 or a 3 out of 3 (TBC) vote being required to release funding for certain tiers.
- Participants agreed that ValuePlan tiers and spending buckets, each having explicit, published guidelines and clear scopes of work outside of which funding strictly cannot be issued.
- Spending buckets would ensure that funds could roll over to proceeding periods instead of consumption of entire budget each quarter and issuance of new budget request as is presently occurring.
- Smaller grants can be managed by single approval from one of the members (suggested was less than 5k USD)
- Budgets between 5K and 20K should be handled by 3 reviewers (each of whom serve a X year term before rotating out with a new reviewer which is elected by the community
- Larger tiers (> 20K USD) require their own individual proposals to be submitted to the DHF.
- Keyholders don't and should not act as final decision makers
- ValuePlan governance must remain distributed and community sentiment must be monitored so that ValuePlan spending reflects the will of the community.
- A rotation system for reviewers prevents bias and stagnation.
- ValuePlan reviewers need to clearly communicate how and why each spend happens.
- It should be noted that there are expenditures due within ValuePlan and so any down scaling of expenditures should take this into account and happen over a period of weeks/months so as not to result in unpaid obligations in ongoing budgetting.
TODO:
- Set 2 out of 3 or 3 out of 3 reviewer voting mechanism / rotation of committee.
- suggested bucketing categories
3. New Reporting Standards & Accountability for All DHF funded projects
Consensus formed around a lightweight but consistent (ideally quarterly) reporting standard for all funded projects:
- Management & accountability plan before funding
- Progress updates per milestone
- Public post-completion report
Goal: professional, KPI driven transparency without bureaucracy.
Action Points
- Witnesses & large stakeholders to publish their own, more specific DAO-voting frameworks for transparency and improvement of reporting and execution standards for projects seeking funding.
- @RoelandP to draft a Stakeholder Voting & Project Reporting Criteria Template.
- Change the Value plan to a tiered approval process with a 2 out of 3 or a 3 out of 3 approval process for budgets above 5K USD
- Cap individual Value Plan project budgets to a maximum of 20K USD
- Appoint 3 people to become the reviewers and approvers of Value Plan budgets
- Introduce annual rotation of ValuePlan reviewers.
- Encourage participation in #hivedevs for project follow-up of technical implementations.
- Monitor in six weeks to verify if the above steps have improved the quality of, reporting of and assignment of spending via the DHF
- Re-visit in six weeks to assess whether the DHF is significantly contributing to inflation or if it is starting to move towards being a net deflationary factor on the eco-system – decide if further actions should be taken to address inflation.
Closing Thoughts
The KL Roundtable showed that Hive’s governance is maturing. By combining clear spending criteria, public voting principles, and light-weight accountability, Hive’s DHF can evolve to a more transparently coordinated, KPI and results driven model with regular reporting standards which can more easily be used by the community to further market Hive’s achievements.