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# Glossary | ||
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### 1INCH | ||
An ERC-20 token that is used to participate in the 1inch DAO governance process. | ||
* **st1INCH:** An ERC-20 which represents 1INCH staked with the 1inch protocol. | ||
* **v1INCH:** An ERC-20 which represents 1INCH tokens that are currently locked in the vesting contract. v1INCH has voting power based on the token's vesting schedule -- emulating the power decay of Unicorn Power obtained by st1INCH. | ||
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### 1IP | ||
1inch Improvement Proposal, 1IP, is the title given to proposals that have reached the Phase 4 Snapshot vote. | ||
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### 1RC | ||
1inch Request for Comment, 1RC, is the title given to formalized proposals. | ||
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### DAO | ||
A decentralized autonomous organization. | ||
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### Delegation | ||
st1INCH and v1INCH holders can delegate their voting rights to any address. Delegation does not lock the tokens, and the delegator has the power to revoke this delegation at any time. Vote delegation is an on-chain event. | ||
* **Delegator:** The governance token holder that has delegated their voting power to another address. | ||
* **Delegatee:** The address that has been delegated voting power from any number of delegators. | ||
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### Docusaurus | ||
The tool used to build 1inch DAO’s documentation site. Docusaurus is similar to GitBook, however Docusaurus has an unencumbered free-use MIT license. | ||
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### Off-chain | ||
An event that does not occur on the blockchain. Off-chain events are gasless. | ||
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### On-chain | ||
An event that is recorded and verified by the blockchain. All on-chain transactions incur fees paid to miners/validators. | ||
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### Quorum | ||
In order for a snapshot vote to pass, it must achieve a quorum of 10 million 1INCH votes. The purpose of the quorum is to ensure adequate voter participation for all proposals passed. | ||
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### Snapshot | ||
Snapshot is the protocol that allows users to vote on proposals in a gasless fashion. | ||
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### Staking contract | ||
The smart-contract that governance participants use to stake their 1INCH. | ||
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### Swap Surplus | ||
The Swap Surplus is generated by swap transactions when the executed price is slightly better than the price quoted. | ||
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### Timelock | ||
All governance actions passed with the voting process will have a time delay of 72 hours before they are incorporated. This applies to funds spent from the DAO Treasury, and any change to the 1inch Protocol’s smart contracts. | ||
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### Voting | ||
Voting is the formal process of passing or failing 1IPs. Voting is done through Snapshot — gasless off-chain voting using the on-chain balances of st1INCH and v1INCH. | ||
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### Voting Period | ||
All Snapshot votes will have a voting period of seven days for 1inch DAO members to cast their vote. | ||
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### Unicorn Power (UP) | ||
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Unicorn Power (UP) is earned by staking 1INCH tokens and represents your influence within the 1inch DAO governance and Fusion mode delegation processes. The amount of Unicorn Power held decreases over time. It can be delegated to 1inch Fusion Resolvers and governance delegates in the 1inch Snapshot Space. This is sometimes referred to as "Voting Weight". |
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{ | ||
"label": "Governance", | ||
"position": 8, | ||
"collapsed": true | ||
} |
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# 1inch Network DAO Treasury | ||
The 1inch Network DAO Treasury is the pool of funds under the direct domain and ownership of the community. | ||
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All protocol revenues are directed to the DAO Treasury and referral rewards. | ||
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## DAO Treasury | ||
The primary 1inch Network DAO Treasury is a [Safe](https://app.safe.global/balances?safe=eth:0x7951c7ef839e26F63DA87a42C9a87986507f1c07) smart contract wallet with multi-signature (multisig) functionality on the Ethereum mainnet. 12 multisig owners have initially been selected by the 1inch Foundation from the core contributor team and other well-known projects, such as [Synthetix](https://synthetix.io/), [Opium](https://opium.network/), [NEAR protocol](https://near.org/), and [zkSync](https://zksync.io/), to name a few. These signers are able to veto malicious transactions in a 7-of-12 fashion. | ||
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## Safe + Snapshot + SafeSnap | ||
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Snapshot allows for gasless voting. SafeSnap, also known as [Reality Module](https://gnosis.github.io/zodiac/docs/tutorial-module-reality/get-started/), is a Snapshot module that allows for on-chain execution of off-chain voting. The combination of these tools gives the DAO’s votes direct control over the Safe that holds the Treasury funds. | ||
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SafeSnap has been integrated into the 1inch Snapshot space. 1IPs that call for payment(s) from the treasury must have the "Transactions" container filled out by the individual proposing the Phase 4 Snapshot vote. Required fields include transaction type, Asset, recipient address, and amount. | ||
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Once the Snapshot vote closes, and the vote has met the minimum quorum (more in [Phase 4: Snapshot Vote](https://docs.1inch.io/docs/governance/proposal-lifecycle#phase-4-snapshot-vote)), anyone can use the Snapshot UI to "Request execution" in the "SafeSnap Execution" window -- this is an on-chain transaction that initializes the reality.eth Oracle. | ||
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After the reality.eth Oracle has been initialized, anyone can set the outcome by putting up a bond of 0.1 ETH to be used in the escalation-game-based Oracle. This bond is returned if their answer correctly identifies the passing result of the Snapshot proposal as specified in the 1inch Network DAO Acceptance Criteria. | ||
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The bonded escalation game concludes once a 72-hour period has elapsed without challenge. Challenging the outcome requires a bond that is at least double the size of the current one, and it restarts the 72-hour period. | ||
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Once the reality.eth bonded oracle resolves in favor of the proposal, there is an additional 72 hour period of time between the SafeSnap resolution and the ability for the underlying transaction to be executed -- this is known as the Timelock. During the Timelock period, the 1inch Network DAO Treasury multisig owners will have the ability to veto malicious transactions in a 7-of-12 fashion. | ||
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After all steps have successfully completed, the proposal will be executable by anyone who calls the function. The reality.eth participants may then retrieve their bond. | ||
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### Kleros Arbitration | ||
The Kleros DAO Governance Arbitrator is set as the default Anyone can request Kleros arbitration for the reality.eth bonded escalation game at any point after the first answer is submitted. This can be done in the [reality.eth app](https://realityeth.github.io/) or by [interacting directly with the smart contract](https://reality.eth.limo/app/docs/html/contracts.html). Once arbitration is called, the bonded escalation is paused and no further answers are accepted. | ||
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Kleros Oracle combines Kleros's dispute resolution court system with reality.eth's cryptoeconomic bonded escalation game for verifying off-chain events on-chain. The [Kleros DAO Governance Arbitrator](https://github.com/kleros/realitio-arbitrator-with-appeals) acts as a proxy between reality.eth and Kleros Court contract. It creates a corresponding dispute in Kleros Courts and submits the final ruling as an answer in the proper reality.eth format. There are 5 votes in the DAO Governance Arbitrator subcourt, each vote has a juror fee of 0.072 ETH, so the total cost of arbitration is 0.36 ETH (fee numbers are from the [October 2021 Kleros Pramater Update vote](https://snapshot.org/#/kleros.eth/proposal/QmbM6KjjCbib9eD23WYhKeC2GhRCHjKoY59GZL6eqbZisp) and are subject to change). | ||
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If the result of the Kleros arbitration is to affirm the answer given by the final answerer, that person receives the question reward. If the result of arbitration is to change the final answer, the individual who paid for arbitration receives the question reward. | ||
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## 1inch DAO Treasury Addresses | ||
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| **Network** | **Address** | **Notes** | | ||
|--------------|---------------------------------------------------------------------------------------------------------------------------|---| | ||
| Ethereum | [eth:0x7951c7ef839e26F63DA87a42C9a87986507f1c07](https://app.safe.global/balances?safe=eth:0x7951c7ef839e26F63DA87a42C9a87986507f1c07) | Primary DAO treasury. SafeSnap allows for trustless execution of spending proposals. | ||
| Ethereum | [eth:0x45e84e10e8E85c583C002A40007D10629EF80fAF](https://app.safe.global/balances?safe=eth:0x45e84e10e8E85c583C002A40007D10629EF80fAF) | 1inch DAO operations fund. This is a 3-of-4 multisig. | ||
| Arbitrum | [arb1:0x71890aC6209Fae61E9D66691c47B168B8300a7c5](https://app.safe.global/balances?safe=arb1:0x71890aC6209Fae61E9D66691c47B168B8300a7c5) | | ||
| Gnosis Chain | [gno:0x422B530b30210A1A4C77Bf1aDCd3352b0DfbCDc0](https://app.safe.global/balances?safe=gno:0x422B530b30210A1A4C77Bf1aDCd3352b0DfbCDc0) | | ||
| Polygon | [matic:0x0A777DCD3F7924AD769aB2026b2Bb377bD08F4CA](https://app.safe.global/balances?safe=matic:0x0A777DCD3F7924AD769aB2026b2Bb377bD08F4CA) | | ||
| Aurora | [aurora:0x32865f542bE59b39dEAD7FAda7555734c3305786](https://app.safe.global/balances?safe=aurora:0x32865f542bE59b39dEAD7FAda7555734c3305786) | | ||
| Avalanche | [avax:0x5ef96E97e25dB95B906d56A0A517a6c407FD4083](https://app.safe.global/balances?safe=avax:0x5ef96E97e25dB95B906d56A0A517a6c407FD4083) | | ||
| Optimism | [oeth:0xdCBc42C20B7296BfEA6E47b8D88AdD4f69a6DCCB](https://app.safe.global/balances?safe=oeth:0xdCBc42C20B7296BfEA6E47b8D88AdD4f69a6DCCB) | | ||
| BNB Chain | [bnb:0xb946a9FD3935F3A6364F822e814a15E14b841e67](https://app.safe.global/balances?safe=bnb:0xb946a9FD3935F3A6364F822e814a15E14b841e67) | | ||
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_**Note:** Unless otherwise noted, all 1inch DAO treasuries have the same 12 signers, and 7-of-12 threshold, as the primary treasury on Ethereum mainnet._ | ||
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## Revenue stream | ||
The 1inch Pathfinder algorithm always provides users the most current and best possible prices on a swap. However, the swap price sometimes moves between the time of the quote and the time that the transaction is mined — resulting in a Swap Surplus. In the past, this Swap Surplus was sent to the 1inch DAO Treasury and served as the DAO's revenue stream. | ||
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As of June 2023, with the ratification of [[1IP-28] Discontinue Swap Surplus Collection](https://snapshot.org/#/1inch.eth/proposal/0x62888ad3983a8bdb29e73596b4971a120e6d58ca56929b4a64147a723f6bccc5), Swap Surplus is no longer directed to the 1inch DAO treasury. | ||
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### External References | ||
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* **1inch DAO reality.eth module** -- [0xa62D2a75eb39C12e908e9F6BF50f189641692F2E](https://etherscan.io/address/0xa62D2a75eb39C12e908e9F6BF50f189641692F2E) | ||
* **1inch DAO Acceptance Criteria** -- [IPFS deployment](https://ipfs.io/ipfs/QmQHLJ6utJJNr82bthtw6pNjKpZsfnvZDENeHMAxtQidXz) | ||
* **reality.eth:** | ||
* [App](https://realityeth.github.io/) | ||
* [Whitepaper](https://reality.eth.link/app/docs/html/whitepaper.html) | ||
* [Reality Module Governance Oracle Question Resolution Policy](https://ipfs.io/ipfs/QmXyo9M4Z2XY6Nw9UfuuUNzKXXNhvt24q6pejuN9RYWPMr/Reality_Module_Governance_Oracle-Question_Resolution_Policy.pdf) | ||
* **Kleros:** | ||
* [Documentation site](https://kleros.gitbook.io/docs/products/oracle) | ||
* [DAO Governance Arbitrator Github](https://github.com/kleros/realitio-arbitrator-with-appeals) | ||
* [Kleros DAO Governance Arbitrator Proxy -- 0xf72CfD1B34a91A64f9A98537fe63FBaB7530AdcA](https://etherscan.io/address/0xf72cfd1b34a91a64f9a98537fe63fbab7530adca) | ||
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# 1inch Improvement Proposal (1IP) Template | ||
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## Title | ||
Title should reflect the content of the 1IP. | ||
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For the forum post, prefix “[1RC]” to the title and set the tag on the post to `phase-2`. Proposals will be assigned an 1IP-# at the time of Phase 4 Snapshot creation. | ||
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## Simple Summary | ||
A brief, high-level summary of what changes are being suggested. Summary should be a single sentence, or a bulleted list. | ||
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## Abstract | ||
Abstract is a multi-sentence (short paragraph) technical summary. This should be a very terse and human-readable version of the motivation and specification sections. Someone should be able to read only the abstract to get the gist of what this specification does. | ||
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## Motivation | ||
The motivation section should describe the "why" of this 1IP. What problem does it solve? Why should someone want to implement this standard? What benefit does it provide to the 1inch Network or protocols? What use cases does this 1IP address? | ||
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## Specification | ||
The specification section should describe the syntax and semantics of any new feature, or change, at a technical level. The specification should be detailed enough to allow for implementation by a development team. | ||
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## Rationale | ||
The rationale fleshes out the specification by describing what motivated the design and why particular design decisions were made. It should describe alternate designs that were considered, and explain why the proposed specification provides the most amount of net benefit. | ||
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## Considerations | ||
All 1IPs must contain a section that discusses the security and governance implications/considerations of the proposal. | ||
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Security specific implications/considerations include security-relevant design decisions, concerns, implementation-specific guidance and pitfalls, drawbacks, an outline of threats and risks and how they are being addressed, etc. | ||
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Governance specific implications/considerations include impact on revenue stream, cost to treasury, voting process, staking, tokenomics, etc. | ||
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If the proposal requires payment to a third party team, this section must contain the qualifications of said team. | ||
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# Instant Governance | ||
Instant Governance is a feature that allows the community to vote for specific protocol settings. The Aggregation Protocol and Liquidity Protocol each have their own Instant Governance module. | ||
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## Aggregation Protocol Instant Governance | ||
The [Aggregation Protocol Instant Governance](https://app.1inch.io/#/1/dao/governance/aggregation?action=stake) module allows community members to vote on how the Swap Surplus revenue stream is split between the Treasury and the referrers. | ||
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## Liquidity Protocol Instant Governance | ||
The [Liquidity Protocol Instant Governance](https://app.1inch.io/#/1/dao/governance) module allows the community to vote directly on major Liquidity Protocol parameters: the price impact fee, the swap fee, the Treasury accrual rate, the referral reward, and the decay period. | ||
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There are two levels of Liquidity Protocol Instance Governance: | ||
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* **Pool governance** only allows for the configuration of parameters specific to each pool. These parameters include the swap fee, the price impact fee, and the decay period. Liquidity providers may participate in pool governance by using that pool's LP tokens -- the weight of each user’s vote is proportional to the amount of LP tokens they have. The Liquidity Protocol uses a weighted average of all votes and applies it linearly over 24 hours. | ||
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* **Factory governance** is responsible for parameters shared by all pools. These include the default swap fee, the default price impact fee, the default decay period, the referral reward and the Treasury accrual rate. | ||
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### Decay period | ||
The decay period is a unique feature that protects traders from front-running attacks and prevents arbitrage traders from easily extracting value from pools. Longer decay periods lead to a wider price spread in the pool after trades. 1INCH stakers can set a decay period between 15 seconds and 1 hour. | ||
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### Referral reward | ||
This reward is a part of the swap fee and the price impact fee which will be dedicated to referrers (dApps and wallets that attract users and trading volume). Referrers can subsequently claim their share of 1INCH tokens from all pools in one gas-efficient claim transaction. | ||
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### Treasury accrual rate | ||
All protocol revenue not sent to the referrers is instead sent to the Treasury. | ||
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# Overview | ||
1inch Network DAO is a decentralized autonomous organization that governs the 1inch Network. DAO governance decisions can range from allocating Treasury funds for a particular proposal, to deploying a new protocol on the 1inch Network, and everything in between. | ||
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The creation of the 1inch Network DAO marked the move towards full-fledged DAO functionality, providing the community direct control over extended governance mechanisms. All participants in the DAO are working towards a common goal: 1inch Network protocols and the 1INCH token to be completely decentralized, owned and governed by the DAO. | ||
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1INCH token is the governance token of the 1inch Network DAO. Anyone may participate in the DAO’s discussions, however only users with 1inch governance tokens may vote on proposals. To ensure that all participants in the governance process have a vested interest in the success of the project, holders of 1INCH must first deposit it in the staking contract (see [Voting Process](./voting-process.mdx)). | ||
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<img data-theme-mode="light" src='/img/governance/table_gov_process-light.png'/> | ||
<img data-theme-mode="dark" src='/img/governance/table_gov_process-dark.png'/> |
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