Centralizing the DAO: a post-mortem of the TD Proposal

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It's been an exciting week in Splinterlands! We had the official release of RW, hard on the heels of so many sales last week, and I've been loving all of it. We also had two DAO proposals: one to give land holders SPS airdrops and one to give TD pack holders SPS airdrops. The former passed easily, and the latter passed narrowly, after significant intervention by Aggroed. It is this latter point that has me a little concerned with the DAO and whether it can truly be decentralized. This stems from two different concerns which I'll lay out below.

Before I dive in, however, I want to clarify a few points. 1) I don't particularly care which way the TD vote went, so this is not a complaint about the decision, but rather the process. 2) I do not begrudge Aggroed, as an SPS holder, the right to vote. Anytime people in Discord complained about him voting, the counterargument was always that he is a private SPS holder and vote however he chooses. I am 100% agreement with that view, and what I'll lay out below is the ways I believe he went beyond just voting into ways that could threaten the DAO.

Concern 1: Insider Trading

Consider the following scenario. Joe Biden knows Congress is about to vote on a proposal to award Boeing a contract to make many planes. Even though the vote might fail, he has a good feeling it will pass and can lobby to make it so. Before the vote, he goes and buys Boeing stock. If the vote passes, Boeing stock will presumably rise, and Biden will make significant return.

This is not that far from the scenario I think just occurred. I think the SPS TD proposal was known to Aggroed before the TD pre-sale, even while it was unknown to the general playerbase. Aggroed therefore knew about value likely going to be built into the packs that the general buyer did not. I imagine people's buying behavior would have been different had they known about the proposal coming down the pipeline. For instance, if I had known about the proposal, I likely would have bought during the pre-sale because of the guaranteed returns in the form of SPS if the vote passed.

My concern in this scenario is therefore Aggroed (and maybe other SPL team members) acting on private information to their benefit.

Concern 2: Integrating roles as CEO of SPL & an owner of SPS

Consider the following scenario. President Biden wants a certain bill to pass. Normally, of course he would lobby Congress in private. But now instead assume he issues an address directly from the White House with Marines in the background to say the bill should pass.

Again, this is not far from what happened during the TD proposal vote, and what really made me a bit worried about the DAO. During the weekly Town Hall, arguably the most important/watched/official source of SPL news, Aggroed spent significant time pushing for the vote to pass for the TD proposal. Moreover, he brought on someone who was a large voice in the community to voice his concurrence and rationale for the proposal. Crucially, no alternative voice was given time during the Town Hall, and there was not time for questions. One way that this scenario is even worse than the Biden analogy above is that unlike Biden, Aggroed is a voting member of the proposal; not only does his lobbying affect votes, he has a vote himself.

Combined, this makes me worry about the "decentralization" of the DAO. If the Chief Executive of SPL decides something should be a proposal, implements it, and uses every tool at his disposal, not just as a private holder of SPS, but as an Executive Officer of SPL, that worryingly blurs the distinction between the DAO and SPL. Moves like this will make it hard for the community to see the DAO as a legitimate decentralized organization.

Moving forward and recommendations

I don't want to post only doom and gloom and what I think is wrong. I want to post possible solutions. So here they are. Importantly, they are 0 about whether SPL members can vote, or even when they should vote. It is about maintaining transparency and separation between SPL and the DAO.

  1. The Town Hall should not include discussions of ongoing DAO proposals. The Town Hall is a forum for SPL news, not DAO news. Keeping DAO proposals out of the Town Hall will help maintain their separation.

  2. The community should be notified of upcoming DAO proposals as they are known/discussed by the SPL team. It wouldn't have to be the exact phrasing, but at least the general gist. Similarly to how the RW pre-sale proposals were done. This will prevent potential insider trading scenarios as above. This might be a moot point once the method for adding proposals becomes user-centric, but in the meantime this should be standard practice.



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We're entering into some murky waters legally with this and then throw in the fact that only proposals that will pass are being pushed, it sort of defeats the purpose of even putting it to the community.

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I won't comment on the legality, as I'm not a lawyer and have no idea on this. But I do think the pushing of the proposal via official Splinterlands company forums does centralize the DAO. And so far I've not seen any arguments that this is okay except that people trust Matt and Aggroed, so it's fine. Which is true, until it isn't.

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(Edited)

Agree entirely. The community seems really opposed to even discuss why it felt dirty for aggroed to take a clear no vote single handedly to a yes... Kinda feels patronizing.

Like you say, this particular proposal didn't matter. The fact that aggroed basically did an hour of state radio to push it when he stands to financially benefit does make me more dubious about the future of Splinterlands though, as it should everyone.

What's perhaps more concerning is that aggroed proposed the measure, but never intended to let it not pass. Why then, was it even brought up for governance!? I'd call it treating us like children, but if I let my daughter decide what outfit to wear, I'm not going to tell her to try again until she picks the one I want.

This was a small thing, but the way aggroed handled it between that TH and coming in to turn the vote at the last minute was incredibly concerning, and we're too early in governance to overlook it. Silly me, I had thought the DAO would be a real thing... Not just some marketing farce. Makes me less confident in the token released specifically for sham governance.

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