An Idle-Paladin Voting Market

Hey everyone, Figue from Paladin

We’re excited to introduce ourselves to the Idle community and open a dialogue before opening an Idle voting market. At its heart the Paladin protocol aims to enhance governance interactions with voting markets, coordination mechanisms and more. We have been live since 30/09/2021 at app.paladin.vote and audited by Pessimistic.

While the topic of vote lending and liquid influence is controversial, we believe that built correctly and in tandem with the community, the right guardrails can be defined to ensure healthier governance. In this discussion we want to elaborate on why we took the approach we did, how it can help persistent shortcomings in governance and how you can contribute to it all.

Let’s be clear, vote borrowing is nothing new, today’s lending protocols already enable it. Anyone with enough capital can collateralize assets and borrow governance tokens. But this only enables whales and is very rough around the edges.

Paladin Lending aims to fill the gap by providing a dedicated lending protocol to manage influence in governance. We want to create a win-win solution between investors and activists for more effective coordination : creating utility for passive non-voters and granting new tools for activists.

TLDR : Why a voting market :

DAOs are rooted in a vision of openness and low barriers so all kinds of individuals can work together in full transparency. This protocol has thousands of different tokenholders yet when you look at the voting record it’s heavily skewed toward a few participants. This is for a lot of reasons: protocols are still distributing ownership, high gas fees, information overload, passive investors, etc. A class of delegates is emerging but it’s still questionable how effective this will be. Overall, the result is a lot of idle governance power and centralization risk.

Our goal is that voting markets can make this influence liquid and separate passive investors from players who are really interested in participating.

Evolving together :

Feedback is a crucial part of our process and we’ll continue to work closely with communities integrated into Paladin. That way lending markets can better reflect each culture. Each onboarded asset was presented before-hand on the community forums and we were invited to speak on Community Calls to answer fully transparently.

In its current design, staking pools can be customized in terms of access (whitelisting delegates, need for minimum “skin in the game”…) or through its interest model.

NB1 : the current pricing models are a bonding curve with Utilization Rate of the pool and Quorum / Proposal threshold as parameters. This way, the loan cost discourages huge borrows for long periods and reduces potential GEV on large loans.

Paladin went live at the end of September and we wanted to use this post as a greeting and an invitation to collaborate. By creating a community designed pool, the Idle community can enable liquid governance on its terms.

There will be an upcoming community call on the 9th of November at 18:00 CET in our discord, to clarify everything that needs more explanation. If you can join us we’d love to hear from you. If not, feel free to share your thoughts in this discussion and we’ll answer any questions.

NB2 : If you’re interested in learning more about the Paladin vision and architecture check out our articles: Manifesto for a new wave of corporate activism, Paladin, the governance lending platform, Voting Markets: Why now.

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LOVE LOVE LOVE… did I already mentioned that I love this?
I see you shared your audits.

What are the security risks here?

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In addition to security issues, I think it is worth exploring the choice of market direction and how to measure it.

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how is market direction relevant to a “governance voting” market?

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Personally big fan of this implementation because it can improve member participation and it also gives the $IDLE token a new use case😍

Looking forward to seeing Idle bringing governance efficiency to the next level and push vote utilization !

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Hello @unicorn, security risks are limited to the smart contract risks. Right now there is a 3/5 multisig that has the power to create pools, modify interest rates and freeze pools in case of emergency (no possibility of removing funds whatsoever), this will be transfered to a more decentralized entity very soon.

Unlike a traditional lending market Paladin only loans the delegation power. The perks is that your $IDLE tokens never actually leave our smart contracts, we just redirect the delegation.

This also means that there is no concept of collateral, or leverage, which means no potential liquidation (highly relevant with the latests exploits).

I hope I’ve answered your questions on security !

PS : I’m not sure what market direction really means, would love some more details @kom

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This is great thanks for posting Figue. I see the value in a delegation market for Idle and think a collab here makes sense for both groups.

Would be cool to see some of the Idle community at the next Paladin community call which is on Discord here :point_down:

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