The following is a post that brings a discussion to the forum that, given the current state of Arbitrum’s governance, I believe would be beneficial to have. It concerns the use of committees for resource management. This is just a general outline of the issue, and I would like to receive feedback from the delegates to know if there is interest in delving deeper into the matters presented here.
The article published by tokenbrice on their reasons for resigning from the GHO Liquidity Committee caused quite a stir. I encourage every participant of DAO governance to take time to read the article, since it raises many valid points that occur and are replicated across many of the most prominent DAOs.
Lately, Arbitrum DAO has opted for the formation of multiple committees to manage various aspects of resource allocation decisions and the creation of frameworks.
The establishment of such committees has been the response to avoid “centralization” of decision-making regarding resource allocation in the hands of a few or a single person. Whether this is the best approach is debatable, as is the advisability of centralizing certain types of decisions (an interesting discussion about this in Vitalik’s article on convex vs. concave decisions).
I don’t think it’s wrong for a DAO to experiment with appointing committees to sort things out. However, I’m Argentine, and in our country, a phrase from an old political leader is very popular, stating that “If you want something done, name someone responsible. If you want something to be delayed forever, appoint a commission,” (this phrase is originally attributed to Napoleon and before him to Joan of Arc). Obviously, this view stems from recognizing the efficiency of centralizing decision-making versus the inefficiency of delegating it.
In environments where avoiding centralization is sought, delegating decision-making to multiple parties seems desirable. However, forming committees without taking certain precautions can lead to an outcome as bad or worse than centralization: complete inaction. It can make the process non-transparent, decisions taken for unknown reasons, lack of accountability, or failure to meet objectives without understanding why.
Arbitrum has recently approved 4 committees (under different names):
Note that I am not pointing out one or another committee in particular nor do I claim that this should affect its functioning. The experience collected in the aforementioned committees should help strengthen what can be a framework in the future.
If we can agree on certain guidelines or best practices for the operation of future designated committees (or even apply best practices to the mentioned ones), the shortcomings of “decentralizing” decision-making will be reduced, while we can create a framework for the future that is included in the upcoming proposals.
I’ll leave here some ideas to start with, hoping to receive everyone’s feedback.
Problem 1: Lack of clear tasks and objectives to measure outcomes
It is crucial to define the scope of work for the committee, as well as to clearly set out its objectives in order to later measure the results obtained. Just as a protocol requires metrics, KPIs, and milestones to be granted funding, a committee should be required to have clear and defined objectives with deadlines to achieve them.
Problem 2: Lack of external accountability
Committees should have a designated leader responsible for ensuring that milestones or deadlines are met. It often happens that when everyone is responsible, no one is responsible. If there is a concern about centralization, the leadership role can rotate. However, there should always be someone accountable for the status of the work and the adherence to deadlines.
Problem 3: Lack of internal accountability
The roles within the committee must be clearly defined. Each member should have clear objectives and deadlines. It’s important to avoid having a single, generic goal for the committee, which can cause some or many members to feel lost about how to act or coordinate.
Problem 4: Lack of transparency
Communication among committee members should be as open and transparent as possible. Decision-making should also be as open and transparent as possible. A Zoom, Google Meet call or telegram chat are neither open nor transparent, even if recordings or transcripts are shared later (which I doubt many will watch, to be honest).
As uncomfortable as it may be, an effort must be made to avoid repeating the mistakes of traditional politics and to overemphasize transparency and communication. There are tools available for holding meetings and avoiding spam, such as Discord (where open channels can be created for users to read/listen without interacting).
Someone can be designated to handle reporting or to summarize and communicate all meetings.
Communication should always be a top priority.
Problem 5: Lack of engagement with governance / community
Specific mechanisms for feedback from the broader community to the committees and vice versa could be further elaborated. This would enhance the iterative learning and improvement of the committee’s operations.
Problem 6: Are committees a popularity contest?
The effectiveness of a committee does not only depend on having clear objectives, accountability, and transparency but also on the competence and confidence of its members to carry out their tasks.
Is an open election the best way to choose committee members? How can we ensure that its members are those better skilled for the task? (this is an open question tbh).
What’s the best mechanism for assessing the skills and qualifications of potential committee members?
Is it possible to avoid popularity contests at all? One solution could be providing a budget for training committee members. Proper training can equip committee members with the necessary skills for informed decision-making. This could be a useful tool in this context, where committee members come from a wide range of backgrounds and may not have previous experience in similar roles.
Open questions that would love to get feedback on:
Conflicts are inevitable in any group decision-making process. Which is the best way to handle conflicts within committees?
How can we manage conflicts of interest between the candidates for a committee and at the same time ensure that it is made up of the best qualified people? Is there a way to minimize the risk of conflict of interest without harming Arbitrum? What is the balance?
This post is not intended to be a framework, but rather to be an RFC that seeks the engagement of the DAO to understand if it makes sense to create provisions of this type that delegates should expect or require when the formation of committees is proposed in AIPs.
I also plan to create a version 2 of this overview, incorporating examples from this and other DAOs to illustrate what has been effective and what hasn’t. This will help clarify which frameworks are most likely to succeed. It would be great if current committee members share their own opinions and insights on their roles.
I await your feedback on all the points raised here