Across UMA Voting Committee Formation Proposal

Proposals
1

Title: Across UMA Voting Committee Formation
Author(s): EAsports, TheRealTuna, mydefi, neondaemon, underethsea
Status: Proposal
Related Discussions:
(Discord)
(Across Treasury Committee Formation Proposal)
Submission Date: November 6, 2024

Summary:
This proposal recommends forming an Across UMA Voting Committee (AUVC) to secure the UMA Optimistic Oracle(OO), facilitate the DAO’s active participation in UMA voting, and earn $UMA rewards for the Across DAO. This document outlines the AUVC’s objectives, setup, operations, and expected benefits for the DAO.

Motivation:
In 2022, following the launch of $ACX, 150MM $ACX tokens were swapped with Risk Labs Treasury for 2MM $UMA to align Risk Labs with Across and grant the Across community governance influence in UMA. This governance power is crucial to securing the Across bridge. Putting these $UMA tokens to use is also critical in helping keep UMA’s OO secure and decentralized.

By forming the AUVC, we ensure consistent DAO participation in UMA governance, helping to safeguard the Optimistic Oracle and generate $UMA rewards for the DAO. Assuming 30% APY, unclaimed voting rewards could have amounted to 600K $UMA in the past year, potentially generating millions of dollars in annual income at current token prices.

Specification & Implementation:
Across DAO currently holds a substantial $UMA balance, which can be staked to earn rewards. However, voting in UMA’s Optimistic Oracle process is required to generate these returns, and not voting or voting incorrectly incurs slashing penalties. The community needs to be aware that engaging in voting carries these risks.

The AUVC will manage the voting process, performing research, organization, and execution of UMA votes. The committee will provide monthly reports on gains and losses to maintain transparency.

The AUVC will operate under a 2 of 5 multisig for casting the delegated votes. If the committee fails to meet expectations, the DAO can remove the voting delegation.

AUVC Members and Responsibilities

The committee will have five members who will monitor and execute UMA votes on behalf of Across DAO. Members are expected to stay informed daily on voting requirements, reach a consensus, and cast votes. While community feedback is welcome, the team will have the final decision making authority.

Committee Candidates:

  • EAsports: EAsports has been involved in UMA since early 2021 and Across since before it was started. He is a Web3 enthusiast who appreciates the ethos, community, and new technology in the space as well as is fascinated by learning and strategizing about what could be next. EAsports’ experience includes over a decade of working for a large technology company as well as years of working with other blockchain projects including Harvest Finance, Unslashed, and consulting for many others. He is a passionate community member and looks forward to the opportunity to contribute to the AUVC.

  • TheRealTuna: TheRealTuna has been involved at both UMA and Across since before Across was founded. He is a former member of the Across CEC and an experienced UMA voter. TheRealtuna has been very involved in governance at other DAO’s in the past, including BadgerDAO and Pooltogether. TheRealTuna is an avid defi user and governance participant and brings lots of experience to the Across UMA Voting Committee.

  • Underethsea: underethsea has been involved with governance and served on multiple DAO funded teams with PoolTogether over the past 3 years. As the current lead of the PT Executive-Team and previous lead of The Finance Team, underethsea brings experience to Across that is a good fit for The AUVC. underethsea also has contributed to Nexus Mutual, Gravita, and created a Discord bot for Across in the past.

  • MyDefi: My DeFi is an active Across community member, Across Protocol relayer, and has previously served the Across DAO as a Community Essentials Committee member. My DeFi is also a software developer and co-founder of Straddl (straddl.io) which leverages the power of Across+ to provide advanced bridging capabilities for users and other defi apps.

  • Neondaemon: Neondaemon is a security researcher, educator, and active participant in decentralized governance. He has been part of the UMA community since 2021 and Across since inception. He is interested in community building, governance and decision making. He was an UMA UMbassador and member of the Across Community Essentials Committee. As part of the SuperUMAn DAO he was involved in UMA voting for the DAO. He brings his extensive and consistent experience in voting and is currently 9th overall in terms of voter participation.

Revenue Distribution/Compensation

  • DAO Treasury: 92% of the income generated will be retained by the Across DAO Treasury, estimated at millions annually.
  • AUVC Compensation: 8% of the income generated will go to the AUTC members. Compensation is drawn from initial funding until these funds are depleted and then future funding requests will be requested.

The AUVC requests an upfront allocation of 20,000 UMA tokens to cover compensation and gas costs. All voting and staking rewards will go directly to the DAO treasury, with funding requests to be drawn from this allocation. In the event the DAO opts to revoke this delegation, excess remaining funds would be returned to the DAO.

Rationale:
See Motivation and Summary sections

Downside (Cons):
As we evaluated and drafted this proposal we identified the below risks and outlined out mitigation or additional rationale.

  • Voting Misalignment: AUVC members will adhere to DAO established guidelines and consult community input on major votes.
  • Qualifications: AUVC members are long-standing, value aligned contributors to the Across DAO, experienced in UMA governance and treasury management.

To ensure transparency, the committee will maintain a Discord channel for community feedback on votes, with periodic reporting for DAO evaluation

Wallet Infrastructure:

  • Voting Safe: 2 of 5 multisig for vote delegation (Ethereum Safe Address: [Will provide address in snapshot vote]
  • Committee Safe: 3 of 5 multisig to manage compensation disbursements…[Will provide address in snapshot vote]

Voting:
The “Yes” vote will establish the AUVC and trigger the staking and delegation, as well of the transfer of 20,000 UMA to the committee SAFE wallet.
The “No” vote will reject establishing the AUVC.

7 Likes
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This is something that has been discussed for quite some time now on our Discord (for more reference you can go to the governance-chat channel).
I think this is an initiative that will indeed provide a lot of value, which we are currently wasting. These conversations have been going on for over a year and it has not yet been implemented, and in my opinion, we have wasted all this time.
I know 4 of the 5 members, and I can assure you that they are users who have contributed a lot to Across and UMA in every way. Respected by our entire community.
I will be voting in favor of this proposal without a doubt.

3 Likes
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I think it is great that this issue is taken up again and it seems the only aspect from the Across Treasury Committee - ATC initiative that has survived (what happened to it?).

Given that UMA voting is the single aspect being addressed here, my thoughts are as follows:

  1. 8% reward is to high!
  • Across alone bears the risk in case of a “wrong” answer (slashing). The only risk the team has is to not earn any reward in this case.
  • There is an initiative which offers this service for free, see: https://www.uma.rocks/ . If that were used, all the proceeds would go to Across proper. But if voting is supposed to be managed in-house, then the Across community should also be able to come up with a comparable solution.

  1. There is no element of community involvement.
    This would help to get new members interested in voting and, where applicable, to on board them as potential replacements of existing members on the multisig going forward. A rotational system would be preferable.

  2. No term limits
    I do not see any term limit for the group or any of its members - unless this is forseen in another Across basic doc. A reference to this would be helpful.

4 Likes
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Hi, I’m the founder of UMA.rocks.

As @Bananachain said, we have created the first voting pool on the UMA protocol.

We support an unlimited number of delegators, have zero fees, and even offer gas sponsorship, so you won’t need to pay any gas at all if you join our pool.

We vote every day on a very precise schedule:
:clock9: 9PM UTC: Selected answers are posted in our Discord
:clock11: 11PM UTC: Votes are commited
:clock5: 5AM UTC: Votes are revealed

We also give you the possibility to vote on your own even if you are part of our pool, as we won’t override your votes.

In this way you could have the best of both worlds: fully automated voting, but still supervised by the AUVC in the rare cases where they disagree with us and want to vote for another answer.

I am already in talks with the UMA team and will meet with them at Devcon in a few days.

It would be an honor to have Across DAO join our pool.
Let us know how we can help.

1 Like
5

Enjoy the idea of putting Across DAO sizeable UMA holdings to work as it’s design intended - to secure the oracle.

A couple areas of potential risk I’d like to see addressed prior to members being assigned seats for voting with this block.

  1. significant conflicts of interest could be present if any 2 of 5 multisig are active participants in polymarket or other markets in which a vote is needed to resolve the oracle.

  2. multisig members have the potential to be targets for bribery, corruption, enrichment, intimidation, etc having control of such a large voting block that will inevitably resolve gambling disputes.

  3. less of a concern and more a go do - it’s imperative the committee has a clearly defined SOP ratified by ACX voters to ensure Across DAO community values are addressed, upheld and propagated. example: when there’s 15 polymarket disputes to vote and 3 of 5 signers are not available in the resolution period to be able to properly assess the data to determine the Across DAO vote - what if the 2 that are available don’t agree on how to resolve.

  4. doing the homework on the dispute votes, especially considering recent volumes, is a substantial amount of effort and requires constant engagement as the votes are seemingly quite frequent now. what kinda of time/resource commitment are the members really taking on?

  5. are there conflicts that need to be considered relative to oracle disputes that are originating from Across bridge transactions? ie. member runs a relayer, solver (or whatever they are called), etc. they get slashed or something and tx is disputed. If their personal infra capital is at risk what happens?

  6. DAO should establish clear guidance as to how it will use its earned UMA. Ie. realize profit, UMA flywheel, DAO community distribution, etc

Overall like the idea, just need to define very clear rules of engagement that will minimize risk of fraud (or the perception even if everything is above board).

2 Likes
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UMArocks is a great service and ive even looked into it and considered using it for my own votes. I think in the interest of keeping UMA decentralized and secure it is valuable to have multiple voting pools. Our group is committed to putting in the work and we hope the community will rally behind our proposal.

2 Likes
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Thanks for writing up this proposal EA. Great to see active community discussion around putting the $UMA within the treasury to work. As long as any security concerns are mitigated, I would be in favour of this proposal as the DAO could capture a lot of value through such a campaign. Individuals mentioned in the proposal are long term community members and I would love to see them get incentivised at web3 rates for their hard work!

1 Like
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Hey Bananachain- Good to hear from you and hope you are doing well! I haven’t seen you in discord in a while, but appreciate the interest and feedback. In terms of ATC as a concept, we broke this off as the lowest hanging fruit to work on now and some things have changed since as well where some previous scope likely makes less sense.

1.) I think compensation is always going to be touchy and relative to people’s expectations/cost of living/value of time/etc. One of the benchmarks we looked at while drafting was actually uma.rocks (I think they charged 6% or 7% but not 100% sure) interestingly it looks like they recently changed their text/fee model in the past two weeks. Not sure who runs that, but also noticed they only secure a relatively small amount of UMA and have heard some mixed things about them from various community members.

I disagree that the members do not bear any risk. We are trusted members in the community and vest vesting interest in the success of Across DAO, $ACX, and the treasury performance in addition to our own reputational credibility.

For me, the priority is that the DAO does this as I see missed opportunity. I have been involved in many DAO conversations about compensation in the past and one thing that often comes up is the “cost” to the DAO. One interesting piece I hope voters consider is we are not asking for an expense draining DAO treasury fund but rather a small % of the new revenue we plan to bring to the DAO.

For the past 2 years we have done nothing with this and the DAO has earned nothing. By taking the initiate and trying to get this off the ground with this, we not only have DAO members take part in key governance with UMA which helps to secure Across, but also generate Revenue in $UMA rewards.

2.) We agree with you and mentioned it briefly above in the proposal and chatted in discord about it some. We would be happy to expand on this piece a bit if it is helpful, you have specific ideas, or of interest. The idea is to have a balance given the timely nature of these votes and information and make sure the AUVC can move quickly, but also encourage input, feedback and education where there is interest.
image

To date, it has been hard enough to get some engagement in general, but I agree and see the benefits in this. Without creating overhead I see this as more of an optimization and way to encourage growth or new members, but that is something we definitely desire. To have this be transparent and open for input/involvement. The simple mechanisms for this would be the planned discord channel.

3.) Good feedback. personally I think some of this comes back to a challenges of historical lack of interest or initiative, but we are open to adding details to this. The main goal is to get this off the ground to further secure the OO, have the Across DAO become active in voting, and Earn $UMA for the Across treasury. We would be happy to add a year initial term and then open for any interest for new members pending DAO approval.

Would love to have rotational members and I would offer my spot now for anyone who want to do so, but at the moment, also realizing the opportunity cost to the DAO for not doing this for the past almost 2 years is large and the priority imo.

Thanks.

1 Like
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Thanks Mo. Appreciate the support! I am excited about the idea of Across DAO being active in governance as well as the earning potential in the future.

1 Like
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Welcome to the community frigodor. Nice to have a new face! I wanted to share perspective and echo what @TheRealTuna_Across said about the idea of uma.rocks being cool. I see the main value and use case there from smaller holders to minimize time/overhead needed and kind of coast with their UMA.

In addition to earning $UMA for the across DAO, I think a big part of the ethos and purpose of this proposal is for the Across DAO (and in this case longstanding trusted community members) take this role to participate in governance as a block and representing Across. I see it more as outsourcing the task vs aligning it to try and be engaging and representative of the DAO.

Finally, I wanted to ask you why you changed the fee model recently? It seems like given some of the time commitment, risks such as slashing, timeliness, etc. that anyone participating would want to have some incentive alignment there. Curious in your perspective on that.

Thanks and excited to see how uma.rocks does in the future.

4 Likes
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I am in favor of this community initiative and the creation of the committee. I was in the initial group that worked towards this goal and even brought it back in discussions a few time to the CEC.
I am interested to join and bring my voting experience in the best interest of the team. Voted in 412 disputes and my accuracy is above 97%.
The AUVC will bring a new synergy to AcrossDAO, and the generated income will help is grow!

1 Like
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Hi EAsports, fair question.

The main reason I changed the fee model of UMA.rocks is that I want the project to gain traction and secure a substantial amount of UMA as soon as possible. Basically we want to grow fast, and the main way to achieve that is by offering the service for free, like OpenAI is doing with ChatGPT.

Once we secure hundreds of thousands of UMA we will start thinking about making money, but now is too early to think about profit.

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Thanks for the reply. That is interesting rationale. Somewhat unrelated to this proposal at this point, and I understand the rationale, but I imagine the growth problem/equation is much less about paying a % and more about getting people comfortable with the risk/reward/alignment side as well as general product awareness.

With my personal UMA, I would much rather someone be incentivized to do well and take some % so I have a higher degree of confidence I am not going to get slashed or penalized for inactivity or voting incorrectly.

Anyway, it is a cool idea and best of luck!

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Hey hash_error,

Glad to have you involved, your input is alway valuable. You make some very great points that we will do our best to address. We are currently reviewing our written guidlines that should help cover a lot of the valuable points you’ve made.
Multisig members being active Polymarket bettors, relayers, targets of bribery, etc is something we will need to have a policy in place for. These are valid concerns and we will be sure that our policy’s guarantee we are transparent and acting in the best interest of both UMA and Across.
We will also provide a timeline/process for how we will conduct our review and execute our voting power. Please stay tuned!

2 Likes
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It’s great to see this come forward. We should certainly be using the UMA to secure votes and earn the rewards.

I have similar concerns to Bananachain in regards to renumeration for the service. It would be more cost effective to hire a full time member of staff to process this on our behalf.

Can you publish any projections for earnings from this action? That might help sharpen our minds.

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I am seeing individuals focus heavily on the remuneration for service costs. There are a few key points I want to highlight:

  1. Currently, the DAO earns 0% from UMA lying dormant. EA identified the opportunity and brought together key community members with a proven track record, who could responsibly take on this task. By implementing his proposal, the DAO unlock 92% return. To align all stakeholders, consideration can be given to a future proposal where a fair percentage (from 92%), is given to the UMA DAO.

  2. Establishing this group reflects a mature, community-centric approach to unlocking growth. This in keeping to the web3 ethos!

  3. Typically, a team hire would receive token equity, healthcare benefits, and a salary.
    Given this, the compensation that EA and the rest of the group are requesting is fair by web3 standards.

In my opinion, as long as security concerns are addressed, a community-led approach sends a strong signal to the broader web3 audience, demonstrating a collaborative path to unlocking growth for the ecosystem.

1 Like
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Our team has spent the last week refining our SOP, Guidlines, building a working spreadsheet, and testing multisig voting. I hope this addresses some of the areas of concern by the community. As far as the compensation goes we believe our request is fair given how fast UMA is growing and the considerable time/responsibility required by our team. Having a community committee handle this will be the best path to keeping UMA secure and decentralized.

I’ve not currently shared our spreadsheet as it contains personal information, but the data will be made readily available when we are active.

1 - Here is our Standard Operating Procedure Document:

" AUVC Standard Operating Procedure

Purpose

The Across UMA Voting Committee (AUVC) exists to manage UMA voting by the Across Treasury and generate income for the DAO. By enabling a community-led committee to oversee voting, we help UMA remain decentralized and secure, while ensuring that Across delivers and gains value for both communities.

Scope

This SOP applies to current and future AUVC members, detailing the initial process for handling UMA votes and outlining improvement strategies for continuous process refinement, especially as the committee becomes more established.

Responsibilities

The AUVC is responsible for promptly reviewing and resolving UMA Optimistic Oracle disputes to ensure efficient, accurate voting. Our goal is to achieve 100% voting accuracy; any failure to vote or to vote correctly can lead to a costly slashing penalty for the DAO. Alternatively, a flawless voting record will unlock significant annual revenue for the DAO. Though Risk Labs team members may not see direct financial benefits from one treasury paying another, ACX holders benefit from treasury growth and UMA benefits from enhanced oracle security.

Procedures & Policies

  • Voting Process:
    UMA disputes are posted for voting at 12:00 PM UTC with a 24-hour commit phase. Certain votes may be announced in advance, while others may be unannounced. Once the commit phase ends, there is another 24-hour window to reveal the vote.
    • AUVC will coordinate through Discord and utilize a dynamic spreadsheet for managing information. Initially, data will be entered manually, but upon full committee approval, programmatic data feeds may be developed.
    • Voting will be conducted using a 2-of-5 multisig wallet after a thorough review to ensure timely and accurate voting.
  • Schedule:
    • 12:00 AM UTC – Initial consensus deadline.
    • 12:00 AM - 9:00 PM UTC – Additional discussion and review for controversial votes.
    • 9:00 PM - 11:00 PM UTC – Commit votes. *Failure to commit by 12:00PM UTC will result in a costly slashing penalty for failure to vote.
    • 12:00 PM - 6:00 AM UTC – Reveal votes.
  • Conflict of Interest:
    Members must disclose conflicts of interest, such as relayer roles or personal investments that could impact voting decisions. For example, mydefi is an Across Relayer, and TheRealTuna has a small (<$2,000) Polymarket portfolio focused on NFL betting. These members will abstain from disputes where their funds may be at risk.
  • Corruption Safeguards:
    AUVC members must not engage in private discussions where others may attempt to sway votes. Any attempts at bribery, corruption, or intimidation should be reported immediately. Public channels are the only acceptable medium for community engagement with AUVC on voting matters.
  • Compensation:
    Compensation will be calculated on our spreadsheet and distributed using a 3 of 5 multisig from our initial pool of 20,000 UMA. Once the 20,000 UMA is depleted we will request more UMA to draw compensation from. If our committee dissolves or has our delegation removed we will return any funds owed back to the DAO. Our team will split the equivalent of 8% of both the staking rewards and voting bonus.

Documentation

All AUVC activities will be recorded in an accessible working spreadsheet, which includes tabs for Voting, Accounting, Resources, and other relevant areas. This information is available upon request, except for private wallet details. Any slashing events will be publicly reported, and AUVC will conduct reviews of performance outcomes before submitting future funding requests.

2 - Here is our Guidelines:

"AUVC Governance Guidelines

  1. Conflicts of Interest
    AUVC members must disclose any direct involvement or financial interest in disputes brought to UMA’s Optimistic Oracle (OO).

If an AUVC member has a conflict of interest on a particular vote, they must recuse themselves and the remaining 4 members will decide the vote.

AUVC members are prohibited from attempting to influence the outcome of OO disputes in which they have a direct interest.

  1. Security and Anti-Corruption Measures
    AUVC members are prohibited from accepting any bribes, kickbacks or other forms of undue influence related to OO votes.

DAO members will have the ability to propose the removal of any AUVC member for misconduct.

  1. Vote Execution Procedures
    The AUVC must maintain a documented Standard Operating Procedure (SOP) for assessing OO disputes and reaching consensus on votes.

The SOP must specify how the AUVC will handle situations where not all 5 members are available to participate in a vote.

On complex votes the AUVC may consult with the broader DAO community.

To ensure transparency, the committee will maintain a Discord channel for community feedback on votes, with monthly reporting for DAO evaluation.

  1. Resource Commitment
    AUVC members must commit to reviewing all OO disputes that require a vote and be available to participate in the voting process.

The DAO will review the AUVC’s workload on a regular basis and adjust resources or membership as needed.

  1. Conflict of Interest Disclosures
    AUVC members must disclose any involvement in OO-related activities such as operating a relayer, solver, or other service that could create a conflict of interest.

The DAO will evaluate these disclosures and determine if the conflict is manageable or if the member should be replaced.

These guidelines aim to address the key concerns around conflicts of interest, security, vote execution, resource commitment, and use of earned rewards. The DAO should review and modify these as needed to fit their specific requirements. Ongoing monitoring and adjustment of the AUVC’s operations will be crucial to ensuring it functions effectively and with the DAO’s best interests in mind."

3 Likes
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Completely agree that this is something that’s long overdue. It’s also something that @neondaemon is familiar with in that he headed up a similar committee that several of us participated in for the superuman dao. I do think you’ve chosen the right team to launch this operation and think it’s a great opportunity to ensure across and uma alignment. Thanks to @EAsports for the proposal, well written and worth putting to a vote!

2 Likes
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@EAsports thanks for putting this together. I agree this is long overdue.

I agree with the points @Bananachain brought up.

  1. 8% is high, but I’m not sure what the right number is.
    2.5MM UMA x $2.50 x 30% APY x 8% is $150,000 / year
    so each person gets paid $30k for voting which I assume they are doing already with their own UMA and taking little risk with these tokens

  2. Term limits - I agree there needs to be something set so that we can re evaluate periodically and I assume a lot of other community members would want to have the privilege to vote and earn these rewards too

  3. I think we need to define expectations better for this group and the DAO has the right to revoke permissions immediately. similar to a service level agreement. % of votes participated, % of votes correct etc. But how do we pull delegation immediately if we need to? another vote?

  4. UMA rocks does seem like a good option given it’s already doing this, but I’m not sure how it would get implemented.

Just want to throw in my quick thoughts.

2 Likes
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I would like to add an additional though. Getting UMA voting to work is long overdue and is the low hanging fruit here, I agree @EAsports . But we should place this all into the wider context of treasury diversification to which our significant UMA and ACX belong and which represent a “cluster risk”. Purely looking at it from the Across treasury perspective:

  1. Get UMA voting going (setting it up oneself or using an available service provider)
  2. Dollar-cost averaging out of UMA and ACX into USDC e.g. while minimising market impacts.
  3. Once prices fall Dollar-cost averaging into different tokens, among other ETH to be able to feed the bridging pools with our own holdings reducing the reliance on third party stakers.
  4. Added value: if we ever turn on fees, Across and its pools would profit from this.
  5. Having the opportunity to repurchase ACX at a lower price.
  6. Adapting the ACX staking rewards (for all or only for big holders) to lower inflation.

This would give Across more financial autonomy.

If an automated UMA voting service provider were chosen (simple to set up: only requires delegation) then the current multisig holders, i.e. RL, are organisationally best placed to do this as they are already established which facilitates a coordinated decision making and a quicker execution.

RL could consider establishing a kind of “Advisory Committe” to gather non-binding feedback/input.