Changelog:
- Removed the sections
Voting power calculation
andBoosting the voting power
for now, as it needs further discussion. This discussion should be moved into a separate thread, see Lisk DAO constitution - #5 by Andreas.
Introduction
Amendment
Lisk DAO constitution v1.0
Preamble
The Lisk DAO Constitution is a living yet lasting record of the DAO’s purpose, values, and decision-making processes.
Every word has been added as part of the governance processes detailed below, and every word can be changed using those same processes.
Mission
The Lisk DAO provides the opportunity for LSK token holders to participate in the overall governance of the Lisk project, including allocation of funds, protocol updates, or strategic directions. Decisions are made via proposals.
Scope
We commit to Lisk being part of the Superchain and therefore are subject to the Law of Chains. Any governance proposals that would imply changes violating the Law of Chains will therefore be ignored.
Proposals that are not feasible due to technical, legal or budget constraints, or endanger the security of Lisk ecosystem participants, may be ignored.
Community
Membership
Every holder of LSK tokens is able to become a member of the Lisk DAO by staking their tokens for a specific time, which grants voting power in the Lisk DAO.
Delegation
Delegation is a key feature of the Lisk DAO, as it allows token holders to participate in the governance of the Lisk project passively by entrusting a representative with voting on proposals in a way that aligns with their own beliefs and values. By delegating their voting power to a delegate of their choice, token holders can influence that their interests are represented in the decision-making process.
Additionally, anyone can decide to become a delegate in the Lisk DAO to influence the direction of the DAO more directly.
Governance
The Lisk DAO is secured onchain by several smart contracts, based on the Governor framework.
Users can interact with the Lisk DAO through its Tally instance, which offers a convenient web UI.
Additionally, the Lisk Governance Forum offers a place for DAO members to discuss broader governance topics and draft proposals.
Through the Lisk Portal, users can manage the staking of their LSK tokens in order to receive voting power.
Smart contracts
Name | Purpose |
---|---|
L2Governor | Manages proposals - Create proposals - Vote on proposals |
L2TimelockController | Holds the DAO treasury - Executes actions |
L2VotingPower | Handles voting power of DAO members - Tracks voting power including historic values - Handles delegation |
L2Staking | Handles the staking functionality for the L2 network - Enables locking/unlocking - Enables modifying locking positions |
L2LockingPosition | Handles the creation, modification and deletion of locking positions as requested by the L2Staking contract. - Informs VotingPower contract about updates - Stores data about locking positions |
L2Reward | Manages staking rewards |
Security Council
The Lisk security council is a 3-of-5 multi-signature wallet with key members of the Lisk team and Onchain Foundation.
The purpose of the security council is to be responsible for smart contract upgrades in case a security vulnerability is discovered.
The security council controls the following governance-related contracts:
- L2Governor
- L2VotingPower
- L2Staking
- L2LockingPosition
- L2Reward
The L2TimelockController is not upgradeable and therefore not controlled by the security council.
Onchain Foundation
The foundation will have an administrative role and will take care of the following:
- Removal of draft proposals that reasonably appear to be fraudulent, spam-oriented, defamatory, hateful, or otherwise inappropriate.
- Management of mutually contradictory proposals that are submitted simultaneously or in close proximity to one another.
Treasury
The Lisk DAO has an associated treasury, which resides in the TimelockController contract.
The treasury is NOT managed by the Onchain Foundation. Instead, the funds from the treasury can only be transferred via successful funding proposals.
Vesting
Tokens for the Lisk DAO fund were already minted. They are added to the treasury according to the following vesting plan:
Year | Amount (LSK) | Description |
---|---|---|
2024 | 15,000,000 | 6,250,000 LSK liquid at migration, 8,750,000 LSK are linearly released in 2024, starting from the migration. |
2025 | 15,000,000 | LSK are linearly released over the year. |
2026 | 15,000,000 | LSK are linearly released over the year. |
Total | 45,000,000 |
Voting
Any decision in the DAO is made through proposals that members can vote on.
The weight of a vote is dependent on the voting power of the voting delegate.
Voting Power
Every account holding LSK is able to stake an individual amount of LSK tokens to receive voting power / vpLSK.
Proposals
Proposals for the Lisk DAO are created on Tally.
Threshold
For creating a proposal, the voting power of the proposer must be at least 300,000 vpLSK, i.e., the value corresponding to 100,000 LSK locked for 2 years where the countdown is paused.
Approval
The following requirements must be fulfilled for a proposal to pass:
- Quorum: For a proposal to pass, the “yes” and “abstain” votes must sum up to at least 24,000,000 vpLSK.
- Majority: There must be strictly more “yes” than “no” votes.
Proposals types
- Funding proposals: A proposal for receiving a certain amount of funds to an address. If approved, the recipient receives the amount given in the proposal.
- General proposals: General proposals about protocol parameters or the project direction in general that may be followed by the Onchain Foundation or not, depending also on feasibility and cost.
Process
The lifecycle of a proposal consists of the following steps:
- Discussion & draft
- Proposal creation
- Voting
1. Discussion & Draft
Ideas for proposals can be discussed in the #lisk-dao
channel on Lisk Chat or on a new discussion thread on the Governance Forum. Once an idea results in a concrete proposal, create a new draft proposal thread in the forum:
- For funding proposals under the Proposals|Funding category
- For general proposals under the Proposals|General category
Please fill out the provided template when you open a new thread in the above categories. You can add additional fields if required.
The discussion should be kept open for at least 2 weeks before moving to a proposal on Tally.
When the author wants to incorporate feedback from the discussion, the original draft proposal (typically the first message of the discussion thread) should be modified, instead of adding an updated proposal in a new message. The updated proposal should contain a “change log” or “updates” section at the top where the updates are documented.
2. Proposal creation
Anyone who considers the proposal mature enough and who has enough voting power to meet the threshold can create a proposal on Tally.
3. Voting phase
Once a new proposal is created, the community has exactly 1 week time to vote on the proposal on Tally. Delegates should use the time to read and consider the proposal carefully, and place their vote according to their conclusion.
Execution
Proposals with actions
The transfer from the Lisk DAO treasury can be executed by anyone, once a funding proposal is approved. Funding proposals are binding, which means that no one, not even the Onchain Foundation, can prevent the transfer if the proposal passes.
General proposals can sometimes include actions, too.
Proposals without actions
For approved general proposals, the Onchain Foundation will determine whether the proposal is safe, secure and consistent with the scope of the Lisk DAO. If it is, the Foundation will act diligently and in a commercially reasonable manner to cause the proposal to be implemented.