The xGov Voting Session 1 took place between Aug 1, 2023, and Aug 31, 2023. It was the first iteration of our xGov program. This report analyses the voting session, then provides insight into how xGov can be improved and the steps we propose taking as we move forward.
Session Stats
Approved Proposals
From the initial 26 grant applications, six grants have been approved by the xGov community, for a total of 60,102 Algo.
#6 Transaction Builder UI by No-Cash-7970 (@No-Cash-7970)*
#8 Evil Tools by Joseph Glenn (@LoafPickleWW)
#9 AWallet by Ludovit Scholtz (@scholtz)
#14 Fund Unnamed Wallet by Liquid Glass (@0xLiquidGlass)
#17 ASA Stats Point in Time - tax reporting reference for US citizens by Ivica Paleka (@ipaleka)
#19 Algorand Foundation market operations dashboard by Sot Papasot (@papasotiriou)
#49 Algo Wallet Library for SolidJS Web Apps by Brian Whippo (@SilentRhetoric)
All grant proposals can be found on xGov Viewer created by @SilentRhetoric.
- #6 Transaction Builder UI requested 1 Algo. No contract will be signed to fund this and we will be removing gimmicky proposals from the repository moving forward.
- We have initiated contract procedures with the approved applicants, including one US-based builder.
- We will be converting grants approved via the xGov program from Algo to USDC during the xGov grants pilot in order to accommodate US-based builders. US-based entities will have their Algo converted to USDC post contract signature. This change will be reviewed on a periodic basis.
Voting Session 1 Analysis
In Voting Session 1, 54.6% of the xGov wallets voted, representing 33.7% of the total stake. Our General Governance voter participation rate is usually within the 70% range. A result just above 50%, although valid from a statistical point of view, is far from ideal and to consider this voting session a success we would need to have results that are similar to Governance.
Thanks to the fruitful discussion we had with the community during a retrospective X Space, we have identified some of the issues that may have contributed to this participation rate and are working to mitigate these in time for the next voting session.
The results of Voting Session 1 are attributed to issues that can be grouped into four specific areas:
1. Technical Issues
Inability to interact with smart contracts
We were made aware of issues related to a few custody providers which, for security reasons, do not allow connection of their wallets with the xGov voting application.
Main Solution: Manual Voting
In order to tackle this issue, we first deployed a manual voting procedure for developers, during the last days of the voting session. This manual tool is now available as a fallback procedure to xGovs who are not able to connect their wallet directly with the xGov voting application. A related guide will be released prior to the next xGov voting session.
Next Step:
- Add manual voting guide to the xGov Guide before the next voting session.
Fallback Solution: Controller Address Feature
To tackle this matter from a different angle, we encouraged prospective xGovs to investigate if their security framework prevents wallet connection to smart contracts and, if so, to act proactively by declaring an xGov controller wallet different from the wallet participating in Governance (the wallet that must maintain the Governance balance).
This feature, which has been extensively used by DeFi projects in Governance and will be available during GP9 sign-up phase, allows for xGovs to vote using a secondary address (called the controller address), holding only a small amount of Algo to pay for the voting transactions.
For more info, please review the Governor Guide.
Temporary Fallback Solution for GP8 xGov (Term Pool 2)
As a further temporary measure, xGovs who signed up for Term Pool 2 by enrolling at the start of GP8 (July 2023) and have faced the issue above are able to update their controller address between September 19-30, 2023 (the end of GP8).
To update your xGov controller address, please send a 0 Algo transaction from your governance address to the GP8 escrow address: FONC4XH5QPJNUPZPHCMFGPDQ43J3VWYJ7ECI43AVGAGDIHKVBHPOH7YEXA
With the following text field message: af/gov1:j{“xGv”:“REPLACETHISWITHYOURDESIGNATEDXGOVCONTROLLERADDRESS”}
You can check whether the transaction was successful by visiting your account activity history on the Governance website and pasting your wallet in the search box.
https://governance.algorand.foundation/governance-period-8/governors/
Next steps:
- Publish controller address information on website and socials (AF news announcement, September 20).
- GP8 governors may use the above transaction mechanism to provide a new controller address for their Term Pool 2 Algo.
- Governors signing up for GP9 may nominate a different controller address when committing to Governance. See Governor Guide.
Voting with Ledger
We also received support requests about voting using Ledger. The xGov smart contract uses box storage and only works with the latest Ledger firmware and Algorand dApp v 2.1.9. Users who do not want to update their Ledger firmware are encouraged to nominate a controller address using another wallet. See how to update the controller address above.
Next steps:
- Ledger users can update their firmware as above.
- Alternatively, GP8 Governors may use the transaction mechanism described above to provide a new controller address for their Term Pool 2 Algo, and/or
- Governors signing up for GP9 may nominate a different controller address when committing for Governance.
Exodus Wallet Integration
Exodus wallet was added to the connect menu of the Governance Portal in time for the sign-up phase of GP7 (Term Pool 1 xGovs). This integration didn't make it to the first version of the xGov Portal and we received a number of support requests addressing this issue. Those Governors have reported being able to vote either using Wallet Connect (which worked for some, but not all) or using their seed phrase with Pera to vote.
Next steps:
- Add Exodus wallet integration to the xGov connect pop-up.
- Check and test Wallet Connect v2.
2. Voting Mechanism
Another issue that could have caused the suboptimal vote allocation was the vote distribution mechanism. As per ARC 34, the formula to calculate the voting power to pass a proposal is:
Voting Power Needed = (Amount Requested) / (Amount Available) * (Total Number Of Algo In Term Pools)
Reviewing this formula to consider the (Total Number Stake that Voted in Session) instead of (Total Number of Algo in the Term Pools) might be a simple, but effective, way to increase the number of Algo allocated to projects during a voting session.
Furthermore, in order to prevent the (remote) possibility that few voters with an exiguous Algo stake could finally decide for the totality of xGovs, a quorum should be introduced (50% of the total stake, for example) to assess the validity of the voting session.
Next steps:
- Discuss the new voting power calculation at the next ARC meeting. Review community suggestions and how implementation would affect voting timeline.
- Complete handover from MakerX to AF team.
- Complete requirements doc for voting mechanism review.
3. User Interface
We deployed a very basic user interface for the voting tool and saw some interesting behavior, which may have been influenced by the lack of features such as sorting and filtering, including:
- The top three proposals received a high amount of extra votes.
- Once a proposal had enough votes to pass, xGovs continued to vote on the same ones (and the mock proposal) rather than rallying together to pass larger proposals.
Next steps:
- Implement user interface changes in time for voting session 2, including:
- ordering randomization on load
- toggling to dropdown details
- pinning passed proposals to the bottom (if applicable)
- tag filtering
4. Casual Participation and Education
General Governance has a consistent dropout rate of about 20% of Governors who don't vote.
A few factors that may have influenced this subpar participation rate in the first session include:
- As in Governance, the fact that xGovs only lose their governance rewards if they decide to drop out may have led to a more casual approach to voting versus the long-term commitment.
- Lack of understanding that Governance and xGov voting happen on different platforms. xGovs have reported consistently visiting the Governance Portal and finding no information about Voting Session 1.
We acknowledge more consistency is needed in communicating with the xGov community. xGovs are encouraged to:
- Follow @AlgoFoundation, @nonfungibleab and @trekianov.
- Join the Algorand Governance Forum and Discord Governance Channel to discuss proposals
- Subscribe to the Algorand newsletter for a monthly reminder of all things governance.
Next steps:
- Update information about xGov on the Governance Portal, including links to the xGov portal on the homepage and Governor page. (done)
- Add an alert to the Governance site during the xGov voting session to highlight when an xGov voting session is open.
- Proposers must engage with the community to explain their proposals prior and during the voting session and rally votes for the applications.
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