CreamFinance

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Summary

Written by Regan Bozman and Pierre Chuzeville from Dove Mountain Partners

C.R.E.A.M. should separate Critical Proposals from Light Proposals, and create a Committee that handles decision making for Light Proposals.

These two types of proposals would have different parameters which affect the length and execution of a proposal:

• Critical proposals that affect would require more voting time and a higher vote differential.
• Light proposals that affect asset listings and collateral requirements would require less voting time, can be quickly implemented - they should be delegated to a Listing Committee

As part of this change, we should also adopt Kiba’s proposal to create a Listing Committee and move all decisions around listing new assets and changing collateral requirements to this Listing Committee.

The Listing Committee will consist of 5 Nominees who are voted in by the CREAM token holders. Nominees should decide on Listings, Collateral Cap, Collateral Factors and Reserve Factors. This will enable much quicker governance decisions and also allow CREAM to avoid listing all new tokens as 0% collateral.

For

Create two types of proposals with different parameters which affect the length and execution of a proposal. Create a C.R.E.A.M. Listing Committee

Against

Do nothing

Motivation

C.R.E.A.M. community members have voting fatigue because they need to approve small changes to the protocol. Currently, the governance forum is overloaded with requests related to assets listing and Collateral Factors. Consequently, critical proposals are lost among others.

The C.R.E.A.M. protocol development process is slowed down, participation rates are relatively low, and discussion is not encouraged enough. This is mainly due to a lack of structure, order and clarity, leading to a messy governance process.

Currently, the community votes on every Collateral Factor and new asset. This has a number of issues:

• Creates voting fatigue for token holders because they’re asked to vote so frequently
• Dilutes bigger governance changes

Creating a listing committee will make speed up new listings. The community can still make proposals for new assets to be added to C.R.E.A.M. platform. The proposal above attempts to balance speed of iteration with avoiding a descent into plutocracy. This will onboard more collateral to increase TVL and fees.

Specification

Light Proposals

Light proposals would include:

• Asset Listing
• Reserve Factors
• Collateral Factors
• Collateral Caps

What is included in governance proposals labeled as Light Proposals could evolve over time, and anyone is free to make suggestions.

Light proposals would be handled by a Listing Committee, who must make a binary decision. If YES wins (at least 3 positive votes), they have to reach an agreement on Reserve & Collateral Factors as well as Collateral Cap, within 2 days.

Critical proposals

They require more voting time, a higher vote differential, and are not handled by a specific Committee. This is where the main strength of decentralized governance comes into play: community members should be able to express their opinion directly or at worst delegate their voting rights to trusted actors. Critical Proposals are the ones which must go through the full governance proposal lifecycle (we are planning to propose some updates here soon).

Listing Committee

The 5 Nominees must have a diversified background to foster discussion while remaining flexible and agile to move fast. We believe that the ideal committee looks something like this:

• 2 C.R.E.A.M. Core Team members
• 2 active community members
• 1 lending protocol (other than C.R.E.A.M.) active contributor

This design was inspired by the Synthetix Spartan Council.

Voting

Each Nominee would receive an NFT that gives him or her 1 vote. If enough voters amend their votes such that someone who is not a council member ranks higher than a council member, then the the DAO will manually retrieve the NFT from the departing Nominee and issue it to the new Nominee, giving them Nominee voting rights.

C.R.E.A.M. DAO will need to create a modified version (or custom contract) of an NFT which can be revoked and issued to EOA’s (Externally Owned Addresses), signifying a wallet is part of the Listing Committee.

Each parameter - Collateral Cap, Collateral Factor, and Reserve Factor - requires a minimum of three positive votes, in order to be listed. Nominees can also make proposals on new assets to list, and should discuss asset listing related community proposals in the forum.

Minimum proposal length is 24 hours and maximum is set to 5 days.

Election

Nominees election period would last 7 days, and would be renewed every 3 months. Existing Nominees from the current Listing Committee Epoch can remain on the Committee but will still be able to be voted out via people changing their votes in the poll.

In case of emergency, token holders can vote out a Nominee if the decisions made are not considered as aligned with the interests of C.R.E.A.M. Finance. The number of seats can be modified via an Improvements Proposal.

Limited Powers & DAO Discretion

The C.R.E.A.M. DAO has a veto power and can require a revote at its discretion, but this should happen only in emergency situations - the processes should all be optimized to minimize this potential occurrence.

Rewards

Assets listing, Collateral Cap, Reserve Factors and Collateral Factors are strategic parameters to ensure the longevity of the protocol. Such changes are highly related to downside risk of the whole protocol.

Therefore, Nominees need to be incentivized: they will get 25 CREAM tokens per month as rewards, which would vest over a 12-month period.