The second version of Allo will be going live on main net soon. When it does, the Gitcoin community will have a new set of responsibilities: governing a protocol. This has been a long time in the making and I’m excited for what this means for our community.
After launch, we will progressively decentralize control of the protocol from the protocol team to the DAO. The goal of this post is twofold:
- Educate the DAO on what governing Allo v2 means and what this responsibility entails
- Outline the roadmap for how this transition will happen
There are a couple of components to the protocol that will be under the DAO’s control.
The first mechanism within Allo that the DAO will control is the two fee switches built into the protocol. The two fee switches are:
- A base fee (in Eth) applied at the creation of every pool in Allo
- A percentage fee applied at the funding of every pool (denominated in the pool’s token)
Both of these values will be set to 0 when the protocol goes live on mainnet. @nategosselin and I, as co-leads of the protocol team, will provide further guidance here in the forum as we are talking with people integrating with Allo v2. Ultimately, we will need to “discover” what an appropriate fee will be with our partners and community.
The protocol is implemented using a proxy contract, so that implementations of the contracts can be upgraded and patched over time. When these contracts are owned by Gitcoin’s governance process, updating the underlying implementation contracts for the protocol will have to go through an onchain vote.
The process of governing the design and implementation of updates to the protocol is the Allo Improvement Process. This process was designed by the Allo protocol team and is modeled off of EIPs from Ethereum and PEPs from Python.
The largest area of governance for the DAO is the list of approved strategies.
The protocol maintains a list of strategies that are “approved,” meaning they’ve been vetted and used by the community building on top of Allo. These strategies are maintained in a list in the Allo core contract (
Allo.sol). This makes it a lot cheaper and easier to deploy common allocation strategy contracts, which is the case for applications like Grants Stack.
Adding and removing strategy contracts from the list of approved strategies is subject to a vote. The Allo protocol team will work with the community to design a pre-proposal process that ensures new strategies have been audited and are generally applicable to people building on the protocol.
We will roll out governance of the protocol slowly and follow a process of progressive decentralization. When the audit is finished, the protocol team will announce a launch date. For the launch to mainnet, these parameters will be controlled by a multisig.
Overtime, we will decentralize by transferring these rights to Gitcoin token holders. This will happen through a proposal, where Gitcoin’s governance will accept ownership of Allo v2.
For the first 9 months after the protocol launches, we will use a process of off chain temperature checks with GTC token holders and the aforementioned multi-sig to implement changes to the parameters described above.
This is desirable for two reasons. First, Gitcoin as a DAO hasn’t previously governed a protocol and we want to build the muscle within this community while offering stability for groups building on top of the protocol. Second, we anticipate that most changes to the protocol will be small tweaks that happen in the first 9 months - things like upgrades and new approved strategies. To maintain the pace that we’ve been working on, the Allo protocol team will keep these decisions to a multi-sig.
At the time of launch, we expect the total amount of funds flowing through the protocol to be quite low, making multisig ownership at the start a safe option.
Ask: We’d like community input on who should be a signer on this multi-sig
As more groups start to use the protocol, more pools are created, and more funds flow through the protocol we will hand governance over to the DAO. This will be important as the number of pools increases and the protocol stabilizes. At that point, we want ownership of the protocol to be under the Gitcoin community.
The next few months will be exciting as we launch and grow adoption of the protocol. This represents a huge milestone for the team and the Gitcoin community. I’m excited for us all to work together to govern Allo.
Let’s go fund some public goods.