Probably one of the topics we have shared our ideas the least is on our expectations regarding governance and operations, and this became very clear recently during our recent discussions with the Synthetix Community in their Spartan City Hall Series of Podcasts. Therefor I want here to express our views on these areas.

“If you can abuse your power you have too much” —Marty Rubin

The first point I'm going to address, is our plan to distribute and limit power, and of course this starts with our Multisigs. At the moment NukeVaults team hold a Gnosis Multisig (with a 3/5 approval) per network it has funds deployed too. This allows for strategy changes, pausing contracts and configuration parameters of the vaults and strategies. This is by no means ideal, but necessary in the current stage of this project and its need for rapid development, operations & innovation. The best way to ensure non of these are used to harm our users, is not adding more random approvers, but actually limiting what is allowed and what is not.

Therefor in our next iteration of our Vaults and Strategies contracts, apart from implementing necessary changes to align with EIP4626, every single parameter needs to have predefined limits that are hardcoded and unable to be modified. This will address areas such as the Fees, by setting minimum and maximum values, or the ability to pause contracts to be limited only to deposits, but always allowing the ability to withdraw funds by users. This will limit the extent any malicious changes could cause to users. Also important to clarify we do not use Proxy or Upgradable contracts, nor do we ever intend to do so, we believe this goes against the ethos of immutable smart contracts.

As we address those changes over time, we also intent to form a Council (details to be decided with the community), similar to how many other protocols do, for future ownership of the Multisig and execution of changes & transactions. These will be voted initially starting with Snapshot, potentially looking to implement plugins as Gnosis Safesnap, and maybe move later into other forms as governance such as Synthetix's highly anticipated new governance contracts. However before we set this all up, we need to launch and distribute $NUKE as much as possible to the community, get everyone involved and participating in the discussions.

“Most people forget what the A in DAO stands for” —BigPenny#7972 (Synthetix OG, Council and The 300 member)

We couldn't be more in sync with those words. One of the main problems NukeVaults is trying to address is ensuring the protocol can run on itself, this means that all operations such as changes to parameters, harvests, fee distribution, votes, council changes and many others aspects, should be able to be initiated, managed and executed by anyone in the community. But in other to achieve this, all these operations need to be incentivised as well, providing value to those that help on these tasks.

To achieve this, it is very important to start with ensuring protocol revenue is being distributed to tokens holders, this will ensure we keep an active and incentivised community. But it doesn't stop there, we must ensure all these needed operations are also actively incentivised, via an operate-to-earn model, which means, get paid to vote & execute onchain functions.

Perfect DAOs don't exist yet, we are not even close yet, a lot of this still relies on Trust, Trust on anonymous frogs & apes in many cases. But thats not really where the trust is put on, the trust is actually on the technology that allows for protocol operations: Snapshot, Discord, ERC20 & smart contracts in general. You can already notice we, as well as many other projects are far from being truly trustless, and even if all these tools where onchain, there are missing links between all of these to ensure the letters in DAO are fully respected.

All these areas are not just necessary for NukeVaults to succeed but for all protocols looking to really become what we all expect DeFi to be, a fully decentralised, trustless and autonomous economy, and finding the right balance of power distribution & continuous protocol autonomy wont be easy, expect mistakes, expect misunderstandings, expect innovation.