Sep 30, 2021 · 6 min read · cat
Dear Linear Community,
As mentioned in our latest Protocol Update on September 1st, over the past few weeks Linear has been finalizing the structure of the Linear governance model — the entities and the processes involved. Today we are happy to provide you with an overview of the structure and governance processes.
The Linear governance model is set up with the following goals in mind:
Community Participants are users that have $LINA tokens (Available + Staked + Locked, including Vault deposits).
Any participant of the community can submit Linear Improvement Propositions (ℓIP) and Linear Listing Proposition (ℓLPs) in predefined formats to suggest improvements and changes to the protocol.
The proposals first go through the Linear Preliminary Improvement Proposition (ℓPIP) phase before advancing to the Linear Improvement Proposition phase. Community Participants may vote on ℓIPs/ℓLPs via Snapshot.
The Linear Council is voted upon by the Linear community and is the governing council composed of 7 community members who are heavily invested in the Linear Ecosystem and its future.
The Linear Council is responsible for overseeing the Linear DAO and serves to ensure it runs smoothly in representing the community. It also acts as a gatekeeper for the protocol and can veto any Propositions that might be detrimental to the Linear ecosystem.
Linear Council community members serve for 3 months and are expected to vote on >90% of all ℓIPs/ℓLPs that are approved by the community. Failure to meet that expectation can result in replacement after the term. Members of the Linear Council will receive a stipend for their dedication to the Linear DAO process.
The Linear Council is granted 21 days to review all successful ℓIPs/ℓLPs. During this time they will determine feasibility and timelines, and if applicable funding, in coordination with the Linear Protocol DAO and ultimately approve the ℓIP/ℓLPs.
Linear Protocol DAO (pDAO) is responsible for controlling the flow of funds and ensuring that the community remains incentivized to support Linear’s upkeep and future development. It will also be responsible for implementing ℓIPs/ℓLPs that the community is vouching for, based on the roadmap set out by the Linear Council. The pDAO will be governed by core members of Linear Finance and other prominent founders and influencers of the DeFi space.
We are very excited to be starting Linear’s journey towards decentralization. To begin with, the Linear DAO’s scope will be limited to a number of functions within the Linear Finance protocol.
The idea is to progressively increase the DAO’s scope and the number of features the community will be able to modify and improve so that eventually, Linear will be fully decentralized and run by its users.
Linear Preliminary Improvement Propositions are facilitated via forum discussions and will serve the purpose of gauging the sentiment of a proposed change using the Linear community as a sounding board. ℓPIP will determine consensus that change is required and or should be implemented via discussion. Community feedback and engagement are essential to developing a successful Proposition.
A Linear Improvement Proposition (ℓIP) concisely documents the proposed improvements to the Linear Finance protocol. The submitter must outline proposed changes, plan of execution, and the expected time and costs to implement the change. The ℓIP will result in a “yes” or “no” vote from $LINA token holders.
The proposer is required to hold 500,000 $LINA tokens to submit a ℓIP/ℓLP for voting (verified via Snapshot).
Community participants can vote for each proposition as long as they have held more than 1,000 $LINA on average for the last 4 weeks before voting. Voting on an ℓIP/ℓLP does not require $LINA holders to spend $LINA tokens. Voting is conducted off-chain via Snapshot with voting power adjusted by cubic weighting to ensure equality amongst users.
A Proposition is deemed successful if it hits the minimum voting quorum (5% of the total amount staked in the Linear ecosystem) and gets the majority of votes (>50.1%) on Snapshot. Multisigs will execute the transaction on-chain should a Proposition be successful.
For any successful Proposition that does not require Core Team resources, the pDAO will make the final approval to finalize the payment terms and perform due diligence on the proposer. It then pays a stipend to the ℓIP/ℓLP Proposer to have the change implemented. The stipend amount is based on the proposed amount in the ℓIP/ℓLP. However, for any successful Proposition that requires Core Team resources, it has to go through a separate process for prioritization and resource allocation.
Once a Proposition that requires Core Team resources is deemed successful, the Linear Council will study the Proposition in detail to scope out resources required to implement the change. The council will then prioritize the change relative to the features on the product roadmap before providing an estimated timeline to the community.
Linear Listing Propositions (ℓLP) Procedure: For new Liquids to be listed and fully functional on Linear, a proposer has to go through the following steps: The proposer should go through the Linear Preliminary Listing Proposition (ℓPLP) and Linear Listing Proposition (ℓLP) phases, with a proposal clearly outlining all information that allows Community Participants to make an informed decision.
Listing Proposition must meet criteria such as steady reliable data-feed and availability on TradingView. Once the Proposition is deemed successful, the Linear Council and the pDAO will coordinate with Linear’s preferred oracle providers to ensure availability of price-feed and then to launch the new asset within 21 days. If there is an operational reason the asset cannot be supported (i.e. no oracle support), then the Linear Council will veto the listing and communicate the justification to the Linear Community.
If a liquid asset fails to attract at least 5,000 USD in volume for 6 consecutive months, the asset becomes eligible for delisting. Eligible assets for delisting must be voted and approved by the community via standard Linear Listing Proposition Procedure (ℓLP).
We are excited to set in motion this next phase of our journey to become a truly decentralized synthetics asset exchange protocol and hope the outlined governance model and processes will inspire the community to participate, influence, and shape the future of Linear Finance.
In the coming weeks, the community can expect more in-depth updates on the Linear DAO and its entities. Next week we will outline the Linear Council election process. Expect applications to be open very soon!
About Linear Finance
Linear Finance is a cross-chain compatible, decentralized delta-one asset protocol that allows users to get synthetic exposure to various assets, including cryptocurrency, commodities, and market indices. Users can utilize our cross-chain swap functionality to instantly swap assets across leading blockchain environments and DeFi protocols with unlimited liquidity and zero slippage.