GIP-5: Remove Gnosis Impact from the GnosisDAO Governance Process

GnosisDAO GIPs
#1

GIP-5: Remove Gnosis Impact from the GnosisDAO Governance Process

  • Let’s remove Gnosis Impact!
  • Let’s make Gnosis Impact optional!
  • Make no change!

0 voters 

GIP: 5
title: Remove Gnosis Impact from the GnosisDAO Governance Process
author: Anna George
status: Phase 3
type: Meta
created: 2021-02-10

Tl;dr

Gnosis Impact is currently an integral component of the Gnosis governance process. The current implementation of Gnosis Impact has known flaws and poses uncalled-for obstacles to pass proposals through the governance process. I therefore propose to exclude the obligatory utilization of Gnosis Impact as part of the GnosisDAO’s governance process phase 3 until a proposal passes amending its shortcomings.

The Proposal

The GnosisDAO governance process currently consists of three phases:

  1. Informal discussion on Gnosis Forum regarding potential proposal
  2. Creation of a GIP in the Gnosis Forum, including a Forum poll
  3. Creation of proposal on Snapshot + creation of two prediction markets on Omen, with one market collateralized in GNO and the other collateralized in a stablecoin + setting up the Gnosis Impact plugin.
    (More details here)

As described above, phase 3 of the GnosisDAO Governance process is complex and cost intensive, making it less attractive and accessible for individuals to move their proposal forward to the final and essential governance stage that will decide on the implementation of a proposal.

Other than the complexity of setting up Gnosis Impact, the tool itself currently has a few inherent flaws:

  • Due to Omen’s Fixed Product Market Maker (FPMM), all funds provided to set up the prediction markets are lost: once it becomes clear how the vote will turn out traders will buy all the winning tokens. This is making any proposal very cost intensive.
  • As setting up Gnosis Impact is very capital intensive, it is not worthwhile to process any proposal that involves less than $100k. (More details here)
  • Price impacts projected by Gnosis Impact are not very accurate as a) the market prices for the outcome tokens can only be found as long as it is still open which decision will be made on Snapshot and b) because potential profit opportunities are debilitated by Omen fees and gas fees. (More details here)

Only two proposals have so far been processed through phase 3 since GnosisDAO went live in November of last year, underlining the complexity of passing proposals through the final stage. Removing Gnosis Impact as a mandatory step will make GnosisDAO’s governance process simpler and economically viable and will allow more individuals to push their proposal to the final stage of governance.

14 Likes
#2

I think this is a great idea. The main benefits I see are:

  • Makeing the governance process faster and more efficient
  • Preventing loss of capital via Gnosis impact

Happy to support the proposal in the following stages.

3 Likes
#3

I think there is still not enough interest in betting on GnosisDAO proposal outcomes for it to provide meaningful insight.
I think it’s the right move to remove Gnosis Impact as a necessary step for now.
Having said that, I think the concept is interesting and I would love to chat on how it could be used in the future.

3 Likes
#4

I’m in support of this change to the governance process.

Perhaps a revamped Gnosis Impact can make a return to the governance process e.g. for high impact / high importance proposals that would attract token holders to bet on the outcomes.

To @cmagan’s point, we can discuss its return in another forum / chat.

2 Likes
#5

I am also in favour of this proposal. Mainly due to economic inviability of creating GIPs and also the lack of accuracy in the impact factor. Hopefully this can be mitigated at some point in the future. Have we considered the possibility of moving the impact factor to xDai? At least it costs less to setup and participate, however funding the markets would still be an expense.

3 Likes
#6

Yeah, I agree with this proposal.

While I think Gnosis Impact is a really interesting tool, there are some significant barriers to it being effectively used in the GnosisDAO at the moment. Primarily, gas costs and impermanent loss. Once we have solutions for these issues, I’d love to experiment with it again.

2 Likes
#7

I support this proposal because of the current immaturity of the tool. However, I think we should make the Gnosis Impact optional instead of removing it from the process completely because it will still allow us to use it when the tool is more mature. That way, we can have an option of running prediction market on a proposal when we need that without making additional proposal to enable the tool.

3 Likes
#8

I support this proposal also.
Part of the discussion of future proposals in this forum should probably then be whether or not Gnosis impact will be used for that specific proposal or not.

1 Like
#9

I think we still need Gnosis impact,which is used in other DAO governance.If something is lacked, we can fix the Gnosis impact but not totally remove it

1 Like
#10

exploring.eth

Then maybe the best way is to keep it optional - that gives us the chance to improve the tool, whilst not having it as an overhead for small-scale solutions to pass. Seems so far that most people prefer that option.

#11

We’re definitely planning to improve on Gnosis Impact, but the current version of it is quite capital inefficient and, for a variety of reasons, produced pretty unreliable results. We plan to work on an improved version of Gnosis Impact with a safer market structure for LPs, and likely on a network with lower gas fees.