[Constitutional] AIP: DVP Quorum

[Arbitrum]

@cp0x

Who can change these parameter (Alpha) and how? Is a vote required?

The parameters will be fully controlled by the DAO. Any change will require a constitutional vote.

@cp0x

What threshold values ​​can be applied?

Can you kindly clarify what you mean by this question?

@cp0x

What should be done if the negative forecast about high DVP and the impossibility of achieving a quorum with a certain Alpha value suddenly materializes? Is there a procedure to lower this Alpha? (Such a situation is easy to imagine if, for example, AAVE adds delegation capability to their contract)

If we consider the “Apathetic Delegator Attack” identified in the report and what appears to be what you are asking about, i.e., significant delegation, but the voting power is not active, in order to raise quorum and prevent any proposal from passing.

There are only two solutions to it:

• More ‘active’ delegations that can outpace the ‘inactive’ delegation.
• Security council is requested to tweak the configuration.

Generally speaking, delegation is never unintentional, and any design that promotes the growth of DVP should also include mechanisms to ensure active participation of delegated tokens.

@paulofonseca

It seems to me, more and more, that the motivation behind this proposal is to make it even easier to pass constitutional proposals. To the point where we would be able to pass existential protocol changes with very little legitimacy to do so. When all ARB is unlocked in a few years, we would be able to change the protocol with just a 150M ARB quorum, which would mean that just 1.5% of the tokens would be making a decision that impacts all token holders. That’s a very, very small percentage, for constitutional changes in Arbitrum.

Yes, the motivation behind this proposal is to lower the quorum for constitutional proposals as currently there is a mismatch. Your arguments above assume that DVP (which quorum will depend on) and turnout will remain the same. If DVP is 300M ARB, then quorum will be 1.5% of total supply, if it is 1B ARB, then quorum will be 5%. It remains to be seen where DVP stabilizes once token unlocks are complete.

@paulofonseca

I’m talking about increasing the surface for governance attacks. Just in the last call, I highlighted one potential new governance attack that this quorum method enables for less than half the price of what it would currently cost (according to @amanwithwings). And it’s the kind of attack that our direct competitors would be able to pull off pretty easily and with total deniability.
Obviously these are sensitive things to discuss in public, but since Arbitrum would be the first DAO in the world, that secures as many resources as we do, to adopt this quorum method, I think it is very much appropriate to run a war room with industry leaders in this regard.

We do not understand what you mean by sensitive things to discuss in public. Security of a system should be evaluated by as many people as possible which is why we also run a public bug bounty program, pay for audits for any contract changes, and work on reports (like the forum post, or academic papers) to outline how a system works alongside potential security issues that may arise.

In the call, what you described is essentially the apathetic-delegator attack which is summarised towards the end of our initial research report. The cost of attack calculation that yields a value lower than the current model assumes the typical day-to-day level of apathy witnessed in the DAO today. If an attack did surface and became known to us all, we suspect the apathetic profile will change among token holders.