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Multisig: Material Updates
The original “dev runway funding Multisig proposal” touched off several intellectually honest debates within the Terra Classic community.
Community control (Interstellar, ThorChainBull, Vegas): An off-chain multisig is out of the community’s control, which is, in principle, wrong.
My take: 1, this is a fair concern, but it kind of misses the point of the original proposal, which was to delegate authority as well as funding to a specialist group to professionally authorize & manage L1 technical work. 2, Having funds not denominated in LUNC gives those funds access to foreign pools of income (e.g., CVX tokens’ access to CRV & CVX yields as well as Votium bribes) as well as diversification from LUNC’s price. 3, liquidating assets carries its own significant price in terms of slippage costs.
My proposed solution: Convert all assets in the multisig to wLUNC, and bridge it all to the LUNC chain’s burn address, thus burning the funds.
This would carry significant costs in terms of lost yield, loss of asset diversification, and execution slippage, but the community would be assured of total ultimate control of everything.
Conflicts of interest (DemonMonkey, LuncBurnArmy et al): A MS signer has big conflicts of interest when voting on proposed work, even if he recuses himself from votes of direct interest to him. Therefore, all Signers must be independent.
My take: 1, that would eliminate pretty much all the biggest technical contributors from control of the multisig, leaving the multisig in the hands of people who lack the community technical credibility / prior proof of work, and innate technical expertise to evaluate work proposals; 2, ‘independence’ ~ ‘minimal skin in the game’ as well as minimal prior proof of work. However, independent signers should be added to the overall multisig — which was why LuncDAO, Jack Zampolin, and Setten were added to the original slate, as independent observers who also add their own unique mixes of talents to the overall group.
Compensation (various): How much should Signers get paid? What are their core responsibilities really, besides voting, and how much should it be paid?
My take: The main costs/responsibilities for a Signer are legal liability, reputational liability, evaluating / auditing / monitoring progress on individual grant proposals, and the time requirement of presenting / arguing / justifying every decision to the community (it’s very necessary but it takes far more time & energy than is commonly understood, especially for those of us with full-time jobs). I conservatively budgeted this at 15–20 “full time hours” per week, and gave it a level of compensation which was well below the hourly rate that almost all of the Signers made in their IRL jobs.
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Since the original debate, we have made several new findings.
For a variety of reasons, mainly tort/legal liability, the original multisig funds will be significantly more difficult to manage than previously anticipated. A large number of the proposed signers, including myself, Ed, Coach Bruce, and PFC have withdrawn their nominations after taking legal considerations into account.
I thus recommend that the assets of the original Multisig be liquidated, converted into LUNC, and sent to the LUNC burn address in the most efficient possible manner as determined by the signers.
Whomever the community nominates to control the current Multisig should not be from the United States. They should be doxxed individuals from the UK or another jurisdiction which has a) widely respected legal systems which also have “loser-pays” penalties for frivolous lawsuits and b) severe penalties for erroneous libel/defamation.
The nominees should also be from diverse, even mutually hating, Terra factions to ensure accountability, and shouldn’t be paid for this particular work, since it’s extremely straightforward.
The Signers would have one job: convert the Multisig’s assets into wLUNC on-chain and bridge the wLUNC to the Burn Address. The same burn mandate would apply to whatever wUSTC can be extracted from the Multisig.
By buying LUNC and then destroying it, we would a) ensure that the wallet’s value accretes directly to the LUNC community; and b) (this is important) — eliminate the legal liability associated with these funds’ prior provenance (the funds are literally destroyed via the burning process).
However, it does not address, at all, the issue of delegating resources to a community-governed blockchain development entity which can actually allocate capital efficiently, which was the original purpose of the proposal. That would have to be authorized in a separate proposal & governance vote.
My proposed solution: (In a separate subsequent proposal) mint an amount of LUNC into an on-chain multisig that can actually pay quality professionals for quality work — something well above $2M USD worth of LUNC — where the community can be assured of total control over the Multisig.