SEFI Proposal #1 - Executive committee for SEFI Governance

Hey guys,

We decided to share our first proposal, which we’re going to submit with the launch of SEFI governance. We wanted to post it here first to allow some discussion first. Please share any thoughts, comments or questions below.


Now that SEFI will have an official governance channel, we (Enigma) propose a complimentary mechanism to enforce the execution of decisions. Proposals as approved by Governance are text only, and some (if not most) will have actionable clauses. The executive committee is responsible to execute these directives.

We feel that having an executive committee is an important complimentary to decentralized governance which allows for proposals to be pushed and is responsible for making sure the vision of the network is executed.

The main purposes for this committee are:

  1. Responsibility for executing the proposals approved in governance proposals
  2. Working towards advancing SEFI as a token, SecretSwap as a product and its part in the DeFi ecosystem on Secret Network as a whole

We propose the following structure for the executive committee (5 seats total) -

  • Two seats for Enigma
  • Two seats for members of the community
  • One seats for the Secret Foundation

The committee will have the following executive powers, which will allow it to make quick decisions, maintain flexibility and implement policy -

  1. Spending of up to 40% of the dev fund on a monthly basis
  2. Modifying up to 20% of the distribution of SEFI rewards

Decisions by the committee will be voted on, with a majority consensus deciding the result. In case of a tie, the vote will be considered rejected.

The committee will be transparent as possible, except in cases where discretion may be required (for example, if working on a sensitive promotion with another platform).

We suggest that the community seats on the executive committee be selected by the SecretSwap Committee, and be included in the version of this proposal when it goes to a vote.

The structure outlined in this proposal will be valid for 6 months, after which it will be re-evaluated and will require a new approval via governance vote.


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I really like the idea of having a place to discuss with Enigma the future and direction of SEFI (not just Secret Swap). Will either of these members be fully dedicated to building out the original vision of Secret Finance? Is the 40% of the Dev Fund payment to get dedicated resources from Enigma?

I would change the structure to remove the foundation. The foundation exists to support the network’s growth, not make decision on specific dapps. As a support system for the ecosystem they should be happy to help regardless of the outcome decided by this group. With that said Enigma could give a seat to the foundation from their allotment. I would also make the seats be decided by a community vote of SEFI holders, not decided by a SEFI Committee voted on by SCRT holders.

How do you envision proposals that come outside of this committee be communicated with Enigma? Will the proposer be invited to these calls to lay out in detail or answer any further questions on design that may arise. I would like to avoid creating a layer in between the proposers and Enigma. Creating this outlet for direct communication would be good.

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These members act as an executive branch - basically it’s their job allocate resources and make shit happen. It’s more like a board of directors, where they can act in the best interest of the Secret Finance ecosystem (for example, maybe using resources to contract product work for SEFI). For the most part, proposals will go through the governance channels, without being required to go through this committee. They will only be responsible for executing the decisions. I’d actually like to avoid having this committee required to rubber stamp every proposal, as I’m afraid that would cause the governance process to become effectively centralized.

The 40% thing has nothing to do with Enigma specifically. It’s there so the committee can actually do certain things without having to go through the long process of community governance for every spend (although not fully. That’s why we suggested the 40% limit). Think of something like running a promotion with an exchange as a part of a listing. These processes usually require decisions to be made quickly, and taking the time to go through governance may cause the opportunity to be missed.
Those resources could be used to secure resources from Enigma, but I’d argue that there are probably better ways to make use of the funds at this stage.

Regarding the community members - it’s purposely left open, and we only suggested one way of determining the members. The SecretSwap committee makes sense to me because it contains members of the community (and right now the SEFI & SCRT communities do pretty heavily overlap) that are most involved in the product itself - they could hold a vote to determine the members. However, I can’t think of a good way to have an “election-style” vote. SEFI governance voting is more of a yes/no thing.

I’m not going to comment right now on the exact makeup of the committee - I’ll let others weigh in on that. However, I will say that we see the Foundation as key stakeholders in the entire Secret Network ecosystem, and they’re in a unique position to be able to help position Secret Finance in such a way that helps it have a symbiotic relationship with the rest of the products being built, and it’s place in the network’s narrative.

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Logically, the people contributing to the betterment of SEFI & SecretSwap in an active and dedicated capacity would want to be involved in this, regardless of our original funding source. Committee membership is open to all, I don’t snoop in every attendee’s wallet but I assume most if not all of us are heavily invested in SEFI. Regardless, the committee works solely for the benefit, service, and betterment of SecretSwap & SEFI. Please utilize this resource, as it exists directly FOR any and all interested SEFI holders and provides a mechanism for voting in the suggested manner.

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I’m totally agree with your statement :nerd_face:

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If you will recall, the scrt community fund was created to allow the community to vote on collective spending. Then it was effectively rendered obsolete by the creation of the Secret Foundation and it’s tax. The foundation was proposed as a non-profit with transparency.
We got a for-profit without transparency. Where is that Foundation money spent, who knows?

By creating this committee and allowing them to control funds, won’t you just create the same bypass of community governance?

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I suggest you read the foundation transparency report. A new version for Q2 is expected one of these days, but you can also look up the old one of Q1.

The Foundation wanted to be a non-profit, but it was legally impossible because donations above a certain amount require KYC and you can’t KYC the chain. All of this is detailed and explained in the transparency report of Q1.

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Could you please post a link to the Q1 transparency report? I feel like it should be available on the front page of the Secret Network website.

Unless the community has a majority of the votes I don’t see how this is community governance.

Here is a direct link

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The board of five aren’t voters as far as I am aware. They’re the people responsible for executing what has been voted.

And to my best knowledge, it’s practically been all Enigma developing SecretSwap so surely they should be on a board deciding if a project is feasible for them to do or not?

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I support this proposal. Governance provides a way for the decentralized setting-of-goals or expression-of-will but it doesn’t automatically provide a way to translate that will into action.

For some things, this can be automated away pretty easily (e.g., changing the floats that define system parameters such as fees) but for anything nontrivial, something more is needed.

A naive bounty-only model has a lot of flaws such as the expertise needed to critically evaluate contributions. In other words, something like a de facto “executive branch”, consisting of whoever implements the things the community votes on, would almost certainly be required anyway for all but the most trivial governance decisions.

By making this the first proposal, we formalize this process and who it involves in a way that provides far more accountability and legitimacy than if we try to sweep it under the rug.

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