Links

$DILL and Governance

What does 'soft governance' mean?

If certain actions are enabled on-chain these actions are immutable, implying that 'hard governance' could potentially lead to irreversible conflicts within the inner workings of the Protocol.
In contrast, 'soft governance' implies that the scope of immutable actions is quite narrow. Other functions of the protocol which are of importance to $DILL holders are not controlled by $DILL directly. They are either fully trustless or they are currently under an admin, which is the development team of the protocol. Yet, the development team subscribes to the ethos of 'progressive decentralisation', which means that over time and should circumstances and context allow, it is intended that more and more functions would be put under the direct on-chain control of $DILL and Pickle's 'proto-DAO'.

What is a 'proto-DAO'?

A proto-DAO exists on a spectrum, whereas a 'full' DAO would allow its members full control of every aspect of the protocol's organization in a truly decentralized and autonomous manner.
Within Pickle, voting for mainnet emissions is fully 'DAO'-determined, as all emissions will eventually be in the near future. This is primarily because any function that will be put under $DILL control requires that the appropriate contracts are designed, built, tested, deployed and integrated. This means that the development team has to actively transfer the admin keys of those functions when these releases eventually happen.

But isn't Pickle controlled by the $DILLDAO, as per the protocol's own marketing materials? Why mention 'DAO' at all if there isn't one?

The $DILLDAO, as Pickle has named its loyal community of $DILL holders, references the concept of a 'DAO' in its name in order to honor the vision of progressive decentralisation that Pickle continues to prioritize in its long-term strategy.
Pickle is not 'controlled' by the $DILLDAO, but community input is actively encouraged and facilitated. A forum has been set up and there is a meta-process for suggesting improvements to the protocol. The culmination of this is a poll, which has been for some time hosted in Snapshot. These formal polls are called Pickle Improvement Proposals, or 'PIPs', and they are non-binding and they cannot be executed without the active participation and involvement of the development team.
Therefore, it could be said that the development team has a veto on any proposal passed in Snapshot that has not been implemented.

If Pickle isn't controlled by a $DAO, then who decides how Pickle's funds are used?

There is no Pickle DAO per se, yet the development team deeply values the input of the PICKLE community as represented by $DILL holders in order to advance the continuing operation and growth of the protocol.
For that purpose, the development team has established a Treasury with the consent of the PICKLE community. The development team controls the Treasury to execute the mission of continued operations and growth of the Protocol.

Does the Treasury own any $DILL?

The Treasury controls 50% of locked $PICKLEs as $DILL, thus receiving 50% of the governance rewards. This amount of $PICKLEs are "perma-locked" (max-locked and extended to max-lock periodically) to ensure the Treasury controls a minimum of half of the max $DILL supply.
As such, the Treasury receives both revenue-sharing rewards (in $ETH) and anti-dilutive rewards (in $PICKLE).

What does the Treasury do with its rewards from locking its share of $DILL?

Revenue-sharing rewards (in $ETH) from DILL distributions are used by the Treasury to finance the ongoing operations and development of the protocol, subject to budgets approved by the community and overseen by the SCCOC.
The Treasury also continues to carry out:
  • weekly buybacks of $CORN, the protocol's debt token for gradual repayment of users affected by the Evil Jar Hack
  • periodic $PICKLE buybacks according to market conditions; either holding these in reserve or distributing them as "special dividends".
Anti-dilutive rewards (in $PICKLE) can only be used by the Treasury to use the $PICKLEs for the following authorised purposes:
  • strategic initiatives including but not limited to: co-marketing, bootstrapping pool-2s of $PICKLE, or seeding liquidity in CEXs. It is up to the SCCOC to approve spending on any "strategic initiative" through its normal resolution procedure.
  • choosing to building a reserve of $PICKLEs for the purposes of providing $PICKLE Grants for contributors, paying bonuses, or for building protocol-owned liquidity. Any such deployment of $PICKLEs in reserve will have to be approved by the SCCOC.
  • to re-lock in $DILL, in order to defend the Treasury's share of entitlement to revenue-sharing. The SCCOC will continually be consulted on this matter as the community may wish for the Treasury to reduce its percentage of ownership as the Protocol grows and scales.

Does the Treasury intend to indefinitely maintain its percentage of $DILL ownership?

Not at all. The Treasury's main goal is and has always been to act to realise Pickle's strategic vision of progressive decentralisation.
In view of this: should market conditions allow, the Treasury will strive to increase the percentage of $PICKLE in the hands of the community by reducing its own share of the $DILL supply. This progressive decentralisation will be achieved via a combination of grants, special dividends, and community fundraising rounds.