While the operational efficiencies of a MultiSig are difficult to understate, the obvious centralization of power and the lack of strong incentives for MultiSig signers to remain fully engaged in the protocol’s success remain problematic long-term. While the MultiSig scheme has worked out fine to date, over the long term, it is clear that some other more decentralized form of Governance needs to be created that still enables intelligent, efficient, and decisive capital deployment to promote long-term growth of Inverse Finance.
Fed Chair Multisig
The Fed Chair currently being appointed to a single person (Nour) is a Single Point of Failure (SPOF) the RWG wishes to address. In the case of emergency the chair retains the ability to contract vulnerabile DOLA supply across all markets. Risk suggests we change this Fed Chair role to a multisig of trusted core DAO members. The Fed Chair is a trusted role, It’s responsible for expanding and contracting DOLA supply instantly and infinitely which poses many security risks to the DAO. The Fed Chair multisig would therefore assume the roles of Anchor Admins, as well as DOLA Operator.
The RWG is recommending that each member of the Fed Chair multi-sig be doxed to at least 2 other parties in the DAO. If an anonymous signer or signers could act on large expansions this opens the room to collude with attackers for insurmountable losses.
Option 1:
Fastest emergency response time with least consensus. Also recommended that all 3 signers be full time DAO members on payroll and with vested interest to ensure the most availability. It is also preferable if the 3 signers are spread out geographically in such a way that they cover different timezones.
| Signers | Doxed (minimum) | Anon | Quorum |
|---|---|---|---|
| 3 | 3 | 0 | 1 |
Option 2:
Good emergency response time ensures more consensus. It’s recommended for all 4 signers to be full time DAO members on payroll and with vested interest to ensure the most availability.
| Signers | Doxed (minimum) | Anon | Quorum |
|---|---|---|---|
| 4 | 3 | 1 | 2 |
Option 3:
Good emergency response time with consensus and wide availability. It’s recommended for all 5 signers to be part time or full time DAO members on payroll and with vested interest.
| Signers | Doxed (minimum) | Anon | Quorum |
|---|---|---|---|
| 5 | 4 | 1 | 2 |
Guardian Multisig
The Guardian roles for Anchor and Governance currently being appointed to a single person (Nour) is another SPOF the RWG wishes to address. To the same effect of the Fed Chair multisig, a Guardian multisig should be formed.
The RWG is recommending that the majority parties of the Guardian Multisig be doxed to at least 2 other parties in the DAO. Here, quick response time is crucial for safe actions like pausing borrows, or canceling a malicious proposal, and the DAO is in a unique position to have several core contributors who reside in different timezones. To that effect, the RWG recommends the Guardian multisig be one composed of several owners but require only one vote to reach quorum.
Note: There is an ongoing debate that the Guardian roles should instead be passed onto the burner address.
Option 1:
Fastest emergency response time with least consensus. Also recommended that all 3 signers be full time DAO members on payroll and with vested interest to ensure the most availability.
| Signers | Doxed (minimum) | Anon | Quorum |
|---|---|---|---|
| 3 | 3 | 0 | 1 |
Option 2:
Good emergency response time ensures more consensus. It’s recommended for all 4 signers to be full time DAO members on payroll and with vested interest to ensure the most availability.
| Signers | Doxed (minimum) | Anon | Quorum |
|---|---|---|---|
| 4 | 3 | 1 | 2 |
Option 3:
Good emergency response time with consensus and wide availability. It’s recommended for all 5 signers to be part time or full time DAO members on payroll and with vested interest.
| Signers | Doxed (minimum) | Anon | Quorum |
|---|---|---|---|
| 5 | 4 | 1 | 2 |
TWG Multisig
RWG proposes TWG increase multisig signers from 3 of 3 to 3 of 5. To stay true to the original multisig setup, the current three signers (Nour, n3bs, and cryptoharry) will retain verbal veto power for the time being.
Other protocols treasuries also rely on similar multisig setups (Olympus has a 4 of 8, Yearn has 9 of 11). The TWG may soon be storing assets on the multisig for voting in the Curve Wars once the Convex FED is up and running - so we view this as necessary to safeguard those assets in case one of the signers loses access to wallet.
The RWG also proposes to consolidate our signers for both TWG Multisigs (on Ethereum and Fantom Mainnet). At the moment, the Fantom TWG Multisig is 3 of 5, and includes two safety signers that won’t be on the TWG multisig on Ethereum.