Category : Process
Author : Campbell Law
ABSTRACT
This document proposes the setup of an independent RARI Foundation fully controlled and operated by $RARI and veRARI holders. It introduces an elaborate on-chain governance process, intended to align the long-term vision and incentives for all Rarible Protocol participants. This document should be reviewed and considered in conjunction with “RRC-1: Introducing veRARI and Voting - Process”, which has been simultaneously posted at Snapshot
MOTIVATION
The proposed RARI Foundation grants members of the RARI DAO the right to submit proposals, to vote on such proposals and to execute approved proposals independently from any single centralized party. This proposal marks the next step towards full decentralization of the governance of the Rarible Protocol ecosystem in alignment with its core values.
The guiding, core values of the RARI Foundation are the following:
Autonomy
-
Prioritized resource allocation for autonomous mechanisms rather than programs reliant on human execution
-
Governance minimization
-
Algorithms rather than bloated DAO operations run by humans
Efficiency & Accountability
-
Sharp focus on optimizing available resources
-
Accountable parties, measurable deliverables and milestones for every proposal
Long Term Sustainability
-
Strategic decision making for the long term
-
Zero tolerance for short-term profit seeking
-
Reinvesting and compounding value (vs. external extraction)
RATIONALE
RARI Foundation is set up as an independent legal body that allows the RARI DAO to vote to enter into contractual relationships, issue grants and utilize the other benefits and protections of a legal entity.
RARI Foundation serves the RARI DAO community and is governed by it, in the joint pursuit of building decentralized infrastructure products that empower NFT communities.
The goal for RARI Foundation is to facilitate a sustainable governance system that will allow veRARI holders to execute on this vision in an independent and community-centric manner.
GUIDELINES
The RARI DAO will be able to vote to nominate, appoint and/or remove directors of the RARI Foundation (the DAO’s “Board”). The purpose of the Board is to administer DAO proposals and serve the vision of the community, not as its leaders but as its service providers.
A Board member may be removed and replaced pursuant to a majority vote of veRARI holders at any time following the standard proposal procedure.
In the event that no director nominee receives the requisite votes of veRARI holders to be appointed as a Board member, the then-current Board members will continue to serve on the Board until removed or replaced otherwise by vote of veRARI holders.
The total cost of implementation of any proposal should be clear in order for such proposal to go to vote.
The Board is a mere administrator of the wishes of the RARI DAO. Thus, proposals must be crafted to leave as little room for discretion by the Board to implement and must explicitly and specifically include the required terms as detailed in Phase 2 below. Proposals that do not include sufficient specificity may be rejected by the Board.
KEY TERMS
RRC (RARI Request for Comment) – a document proposing a new feature, project, activity, goal, piece of information, or change to any proposal that has already been implemented.
RRC Idea – an optional, but recommended first step in the process of creating an official RRC, which will be presented to the community for gathering informal feedback for a period of seven days.
RRC Categories – the predetermined classification system for organizing RRCs by their nature or intent. They are: Core Proposal, Principles Proposal, Ecosystem Fund Allocation Proposal (a subcategory of Core Proposal), Process Proposal, and Informational Proposal.
Core Proposal – a proposal that would be considered the main activities of the RARI DAO, with subcategories that can be expanded on over time via proposal submission.
Principles Proposal – a proposal for establishing and/or updating the major principles behind the distribution of the $RARI token and fees, including, but not limited to, staking, $RARI tokenomics and budget rules. A subcategory of Core Proposals.
Ecosystem Fund Allocation Proposal – a proposal about how the Ecosystem Fund should be spent. A subcategory of Core Proposals. Allocation proposals should follow Principles Proposals, e.g. yearly budget is a Principle Proposal while funding a project is an instance of Allocation Proposal.
Process Proposal – a proposal about making a change to a process or proposing an implementation. Examples include procedures, guidelines, changes to the decision-making process, and changes to the tools or environment of the RARI DAO or RARI Foundation.
Informational Proposal – a proposal that provides general guidelines or information to the community but does not propose a new feature.
Live RRC – an RRC that has launched for the community to vote on it. The voting options for a Live RRC are “In favor” and “Against.” Voting “In favor” means the voter is in favor of implementing the RRC exactly as-is. Voting “Against” means the vote is against implementing the RRC exactly as-is — you may vote “Against” to encourage the author to resubmit the RRC after making changes.
Accepted RRC – an RRC that has met quorum requirements and received more than 50% of votes “In favor”.
Accepted Final RRC – an Accepted RRC which has not been rejected by the Board during the Cooldown Period and will be implemented by the RARI Foundation.
RRC Process – the process by which an RRC can be proposed, voted upon and implemented by the RARI DAO and RARI Foundation.
SPECIFICATIONS
Every holder of at least 5,000 veRARI can make a proposal for a new feature, project, activity, goal, piece of information, or change to the RRC Process.
RRC PROCESS
Phase 1: RRC Idea (optional but recommended)
An RRC Idea is submitted as a post in https://gov.rarible.org/ or other discussion forum approved by the RARI DAO (“Forum”).
The person or people submitting the RRC Idea will be referred to as the author or authors.
Multiple members can work together on an RRC Idea, but it should be submitted only once.
RARI DAO members should search past proposals to ensure any idea they intend to write a proposal for has not already been submitted.
If a suggested proposal directly conflicts with a proposal that is currently up for vote, the second proposal should not go for a vote until a decision is made on the first proposal to avoid approval of opposing requirements.
A suggested proposal that directly conflicts with another approved proposal should explicitly include in the Abstract (as detailed in Phase 2 below) a statement indicating that such proposal is amending a prior approved proposal.
The RRC Idea informally gathers comments via the Forum.
Seven days after being posted in the Forum, the community feedback process for the RRC Idea will close.
Phase 2: RRC Draft
Once the seven-day feedback window has passed, the author shall draft a proposal with the below required fields (“RRC Draft”).
A proposal must include:
Abstract – Two or three sentences that summarize the proposal.
Motivation – A statement on why the RARI DAO community should implement the proposal.
Rationale – An explanation of how the proposal aligns with the RARI DAO community’s mission and guiding values.
Key Terms (optional) – Definitions of any terms within the proposal that are unique to the proposal, new to the RARI DAO community, and/or industry-specific.
Specifications – A detailed breakdown of the platforms and technologies that will be used.
Steps to Implement – The steps to implement the proposal, including associated costs, manpower, any legal documentation and risk assessment (if applicable) and other resources for each step where applicable. The steps must be described with sufficient specificity to leave as little room for the Board to exercise discretion in implementing the proposal.
Timeline – Relevant timing details, including but not limited to start date, milestones, and completion dates.
Overall Cost – The total cost to implement the proposal.
The author will draft the proposal based on the original RRC Idea, incorporating any feedback provided by the community that helps the idea better serve the RARI DAO, including, but not limited to, lack of specificity in the proposal.
The author can add additional fields if necessary to fully communicate the intentions, specifics and implications of the RRC Draft.
From this point on, the RRC is referred to as “RRC-#: (Name) - (Category)”. For example, this RRC is “RRC-0: Introducing the RARI Foundation and Fully On-chain Governance for RARI DAO - Process”.
Phase 3: Live RRC
Drafts that have been completed can only become a Live RRC provided that the author(s) have at least 5,000 veRARI to kick off voting.
Each Live RRC will undergo a 5 day voting period on Tally, during which the RARI DAO members will be able to cast their votes.
The voting options are “In favor” and “Against”. Voting “In favor” means the voter is in favor of implementing the RRC exactly as-is. Voting “Against” means the vote is against implementing the RRC exactly as-is — voters may vote “Against” to encourage the author to resubmit the RRC after making changes.
Any holder of veRARI is entitled to vote. A veRARI holder may also delegate their veRARI to delegates via smart-contract call ‘delegateTo’. Further details on the delegation user-interface are available in RRC-1.
The quorum requirement for a Live RRC will be 10% of the total supply of veRARI. Once quorum has been met, a Live RRC may only be passed with greater than 50% of votes cast “In favor”. A Live RRC which has not received greater than 50% of votes cast “In favor” will not pass. A Live RRC which has met quorum and received greater than 50% of votes cast “In favor” will be deemed an Accepted RRC.
Phase 4: Cooldown Period
An Accepted RRC will commence a time-lock period of 2 days (“Cooldown Period”) following the approval of veRARI holders.
During this Cooldown Period, the Board will be able to reject the Accepted RRC only if implementation of such Accepted RRC would, as reasonably determined by a majority of the Board acting in the best interests of the RARI Foundation:
-
Directly conflict with a proposal that is currently up for vote;
-
Directly conflict with another proposal approved by the RARI DAO;
-
Does not include the required proposal terms as detailed in Phase 2 above;
-
Compromise the Board’s fiduciary duties as they are owed to the RARI Foundation;
-
Be in violation of the RARI Foundation’s bylaws or articles, any statutory requirements of Cayman Islands laws or the laws or regulations of any other applicable jurisdiction;
-
Cause harm (including reputational harm) to the RARI Foundation (as determined in the Board’s sole discretion); and/or
-
Cause the RARI Foundation to be in breach of any contracts, agreements or any other arrangements.
Furthermore, given that the Board serves merely as the administrator of the RARI DAO’s decisions, Accepted RRCs that require the Board to exercise discretion by not including sufficient specificity, particularly with respect to the required steps to implement, will be subject to rejection by the Board. Proposals which require broad discretion in their implementation should include a grant to a community member or group responsible for exercising this discretion – not the Board.
For absolute clarity, the default pathway for Accepted RRCs will be to be implemented by the RARI Foundation. That is, the Board must defer to the decisions of the RARI DAO and may only exercise its rejection powers during the Cooldown Period for the reasons provided above.
It is intended that this power is seldom (if ever) used, as it is the hope that the issues mentioned above will be resolved by the RARI DAO community in prior phases.
If the Accepted RRC is not rejected by a majority of the Board during the Cooldown Period, it shall be deemed an Accepted Final RRC and move on to Phase 5.
Phase 5: Implementation
For Accepted Final RRCs, implementation will begin based on the steps outlined therein.
The RRC implementation is administered by the RARI Foundation. Implementation may be immaterially altered to optimize for security, usability, to protect veRARI holders, and otherwise to effect the intent of the RRC. Any material deviations from an RRC that would be necessary in order to effect the RRC, as initially approved, will be disclosed to the RARI DAO community and may be cause for rejecting the RRC as set forth above.
PLATFORMS AND TECHNOLOGIES
DAO Hub: the RARI Foundation website at https://rari.foundation, which will provide an interface to educate the RARI DAO members on the governance process and provide access to the Forum (detailed below).
Communication Channel: Forum (Phase 1)
veRARI holders must go through a wallet authentication process to post ideas or give feedback to ideas via comments.
All posts and comments will be regularly monitored by the DAO community members themselves. There will be zero tolerance for hate speech anywhere on this platform.
The author of an idea via a post in Forum cannot edit the original post. If the author wants to propose changes to the original idea, the author must do this via the comments.
RRC-0 and “RRC-1: Introducing veRARI and Voting - Process” shall be hosted on Snapshot, with voting to be based upon holdings of $RARI.
See RRC-1 for further details on the implementation of veRARI and Tally on a go-forward basis.
STEPS TO IMPLEMENT
Ratify the RARI Foundation’s Amended & Restated Memorandum of Association and bylaws attached to this proposal and the Foundation Board.
Bylaws - RARI Foundation (Final)(16242905.10).pdf (66.8 KB)
A&R Mem & Arts - RARI Foundation (Final)(16169857.13).pdf (211.5 KB)
Propose a voting process and implement the respective set of smart-contracts (see RRC-1) .
Completed setup of the Forum settings including a custom token-gated solution for comments.
Approve reimbursement of costs as illustrated in the Overall Cost section below and disburse such reimbursement to applicable service providers.
Approve creation and funding of an Administrative Budget Wallet.
Approve commitment in the amount of 100,000 $RARI under previously signed contract that shall be granted subject to milestone achievement
Pending approval of this RRC-0 and RRC-1 by the RARI DAO:
-
Transfer to the Administrative Budget Wallet 0x2a83d2891Ef3df6967E3C2e9b69cCc7aD029736B:
-
Transfer $280,000 USD value in $RARI to to fund administrative and operational costs, as well as reimburse service providers for RARI Foundation set up costs (see details in Overall Cost section)
-
Transfer 100,000 $RARI to the Administrative Budget Wallet 0x2a83d2891Ef3df6967E3C2e9b69cCc7aD029736B to hold in escrow as a reserve for signed grant agreement.
-
-
Transfer to Main Foundation Treasury controllable via veRARI: 0x7e9c956e3EFA81Ace71905Ff0dAEf1A71f42CBC5
- Transfer all remaining community-allocated $RARI (10,535,350 $RARI minus the above mentioned $280,000 USD value in $RARI) Transfer all unused funds of previous multi-sig DAO used to be ran on snapshot (268,905 $RARI)
-
Separate Wallet for Claim Contract 0x04D4241c42B63706E4139b2C73a5661b7b4E6df9 controllable via veRARI.
- Transfer all unclaimed $RARI rewards (approximately 1,165,447 RARI which may change by the date of transfer) currently available for claims
TIMELINE
Solution prepared and ready to be ratified and approved.
OVERALL COST
Initial RARI Foundation and RARI DAO Setup Costs
Total setup costs including legal costs, DAO administration setup and registration fees to be reimbursed to service providers: $230,000 (“Total Setup Costs”).
RARI Foundation Board Compensation
Initially, there will be only one Board member: Campbell Law, in his personal capacity, who will serve as a Board member until he is removed or replaced pursuant to a vote of a majority of veRARI holders or upon his resignation. For Board member services, the total cost is $25,000 USD per year and is already included in the Total Setup Costs figure above.
RARI Foundation Operational Budget
For the sake of operational and administrative efficiency, a separate wallet controlled by the Board has been created (“Administrative Budget Wallet”). Upon approval of this RRC-0, $50,000 USD value in $RARI shall be transferred to the Administrative Budget Wallet for purposes of covering ongoing administrative and operational costs of the RARI Foundation.
As a one-time measure, $230,000 USD value in $RARI shall also be transferred to the Administrative Budget Wallet to immediately reimburse applicable service providers for the Total Setup Costs. Further funding of the Administrative Budget Wallet shall require approval of an Ecosystem Fund Allocation Proposal by the RARI DAO.