The future of SCRT related governance and SEFI

General / FAQ
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This is not early BTC where 10,000 bought a pizza and everyone will sell. The expected value is different now.

We need SEFI governance further decentralized and new communities to be able to join later and have substantial voting strength and positions. Goverance has a high value proposition for SEFI holders and yet it’s complexity seems rather under-appreciated.

If I had a concern with ENG governance it would be having provided the community a 3rd tax that spent money away from investors on building governance. It’s just too wild and incentives misaligned with the creation of strong developer talent and discourages high quality unpaid community engagement (tech3). Finding new talent is considered competition when there’s no expectation of ROI. It’s a tax and an expensive one if you consider the potential value lost during the bull markets. This is our product and we should take the time to analyze it and build it with all of the support and good intention it deserves rather than simply copy a norm. Privacy is unique but the product needs the same hard working team and their innovation in order to manage our ability to produce extraordinary results.

In summary, governance is not a simple matter. Assuming people will dump over time like early BTC to decentralize the network in an equal voting system is not guaranteed. The reality may be early entrants take up positions and stake to earn early rewards and then vote to keep them. The entire decision process could become a huge tax on the network and make it inefficient.

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Is there an idea you had in mind to improve things? I’m a little confused because anyone can directly jump on the swap and directly buy SEFI to vote if they wish to.

Might there be a similar platform that uses governance in a way that we could draw some beneficial comparisons to?

I’ve been very interested in better understanding the governance mechanisms of similar protocols to understand how voting power has empowered it’s users over time. Perhaps a comparison chart / spreadsheet for internal reference comparing SS, Uni, Sushi and so forth could be a nice place to start.

Perhaps this is more a critique on SCRT governance which I haven’t been following as closely. But I’d also be curious to draw comparisons to networks that have basically been crippled by abject greedy governance. I don’t doubt it can exist, but also it’s not like people can’t plainly see when that sort of behavior is happening.

Anywho just passing by, appreciate the considerations here.

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Let ENG build the protocol layer and let Secret Swap build a swap. Let Aragon build governance and connect with both.

I’ll have answers to your questions as soon as I finish editing and think through them and provide resources.

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ENG should be partnering with developers building dapps on their protocol which would leave those developers to run the app itself.

Secret Swap benefits node runners and people who stake. Many of these people also understand how to code and their value is tied to how well it performs. They could vote to add features or make changes moving forward. If that doesn’t work then ENG should assign someone to manage it and the taxes from the swap should pay for it.

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You don’t say, I don’t imagine Enigma intends on building every dApp and upgrade the Protocol themselves.

They built SecretSwap because there was no one doing it at the time, now there will be another team in the form of Sienna Swap when that gets launched.

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The whole value proposition of SCRT has changed and the node runners are profit driven and so shouldn’t have a big vote in anything related to ENG core. It’s a conflict of interest.

When the market was going up 2000% and we were dumping at 1000% to give money to a team of employees to govern the swap that was money from my own pocket to pay for a product that benefitted node runners and paid people to build a governance product. People who don’t even understand it and so I’m asked to explain why it fails. Explain why SEFI not being the token that investors can hold to earn from the product SCRT built and airdropped. Why voting from SEFI holders has no value because distribution benefits early staking and is already centralized. Lower amounts are released over time creating a funnel toward the bottom or those staking in the first year. Unless it’s programatic there will be funding leaks like the example posted about UNI and the $1M education dump.

What are we even voting on by the way? How to reward pools? I started to get into this and the community just got all hot and bothered like they couldn’t talk about such things. I was trying to think my way through the question, “why couldn’t we just increase the fees to reflect supply and demand and early suppliers of LP tokens could earn from making the initial high fee transactions and providing liquidity?” Why do we need to pretend voting on it is some sort of decentralized must have? It’s not, voting is not equal or fair.

When voting benefits node runners, then it is a different product and we should no longer fund the discovery process for them. As I mentioned above that they are motivated to see its success. SCRT holder will indirectly benefit from the fees and velocity of SCRT? Ultimately there will be more holders of sTokens. Economics will determine the optimal price setting in Secret Swap.

ENG core should not appear to be allowing votes to determine fees and it gives too much power over the direction of the network to node runners.

ENG core devs could be trying to make transactions faster and free and so investors benefit and we should be discussing how to do this without disincentivizing early node runners and that could be the swap fees. I do understand we need SGX and people to run validator nodes for privacy but I don’t think I understand how expensive it is to do a transaction or why it needs to time out. I’m not an expert on computer hardware but it would take a significant amount of power and computation to lag my M1 let alone 50 connected computers competing for the fee.

Lag is from the Keplr wallet? Then build user wallet apps for the swap and ENG core should be helping to build those tools and features for all of us developers working on it so we can pinpoint exactly how it’s happening and better optimize for function.

If this is a stablecoin project that feeds price movements into leads and community positions then maybe we should make that clear.

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This begs the question why we need to Fellowship Pathway in its current form? Baedrik is funded and doing an amazing job at helping to onboard developers building products. We need about 1 engineer per 3-10 apps to even begin to take up their full attention. If I had 5 new developers building games and asking me to help code a “missions” feature or add cryptocurrency and I’ve already been through it we don’t need each of them to learn either in its entirety or go out and learn RUST or secret.js.

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I have no problem with ENG core building projects that spend SCRT tokens. If I finish learning Rust and secret.js I too would build products like I did mobile game apps and just start releasing these products into the wild to see which stick.

Where does the money go when some fund invests $15M in the project? Why did we dump close to 500k SCRT to pay for things when there was a distribution from the ICO for development that was suppose to last for a very long time. Wave 5 on ENG was shaved off and so it was on SCRT. In the beginning there weren’t a lot of red flags with ENG and the team and I would like them to distance themselves from this type of voting and spending.

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What is to keep holders of a voting token to price dump on the opposition, lol? If you gave everyone with a wallet one vote that would be hackable but make more sense?

If we need to lobby to vote the direction of ENG core development hours, or by extension Secret Swap features, we temp teams to continually fund their own initiatives and create barriers to entry for competition. Or build systems that pay rewards for managing the system rather than staking or holding tokens.

With KIN as an example, we saw KDP payouts fund a group of developers that held an interest in being the only apps available for funding and then designing the development pipeline to ask the “core” to invest time and energy refining the system rather than rewarding competition and eventual growth. If SCRT has existing teams and leads, I worry that voting will be used as a loophole to funnel development and funds and roles will be full-time lobbyists who have governance meetings to decide the direction in their favor or ultimately that it will reflect the bureaucracy of the corporate world and we will fail to make suggestions if we want to be considered for funding.

As a case study, excessive grants were given ($7B+ Kin earmarked for the gaming challenge) and only a few games were entered. Our app had 50x more users and spends than the next best app and the payout was a few billion for that award group and about the same for the pool rewarding a special payout per spend…

Needless to say they shouldn’t have paid that much for a few participants and so walked some of it back. This also probably proves they weren’t intentionally targeting their own teams unless they simply failed to consider me as competitor. The barrier to entry was the difficulty in learning how to setup and support user wallets etc. The focus was always on a shifting backend. If they really wanted to scale though they would have had someone capable of working with apps and doing the integration for multiple projects vs everyone doing it and then failing to optimize the front-end user engagement.

So, as a community of KIN supporters, we spent over $4M USD value at the recent price pump on a few gaming apps and paid a program manager and engineers to build the SDK… but spent NOTHING on recruiting new Unity or other teams to compete and then squashed the entire program when they did. Why not expand into AR, VR and use those tools to reach more teams? A part of the community is rebuilding the Unity SDK with Solana on their own and the old one discontinued.

We were the beneficiaries of those inefficiencies and they were largely centralized decisions. But I think it matters who your initial team is and if their experience matches your own style. Ted of KIN built one of the largest mobile messaging apps in the world (KICK) and he may yet prove the programs he created were meaningful to his success. Having leads, teams and voting organizations may work but I want to see more focus and support of non technical inclusion and community development outside of paid agents and Telegram. Alternatively, we may agree everyone should become an engineer and build everything from scratch. For example, allowing a few months for a turrent without a complex shader, particle effects or rendering pipeline is good and we can build tutorials and tools. Fine. I don’t want to fight that process as much as I wish to see it evolve and so that these grants are made to help connect the backend to front-end development and aim for a 20/80 system of engineers to front end design or NFT artists. Let’s scale for investors and that happens to fall on my ability to develop in Unity but it’s because that’s where my education and experience lead me to see the most marginal utility. This competitive positioning and development is opposed to voting based on the skillset I would have as an engineer or insider. Even now I feel like I’m only addressing a group that currently holds established voting power and attacking their positions. Sadly.

So, I see voting as a barrier to non technical inclusion and these people are not currently represented at even 5% due to the technical barrier to entry. Simply going out and owning SEFI to vote on something is not as obvious as it may seem and SEFI already dumped enough for concern.

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let me thow a word in the room

#proof of participation