This topic is dedicated to sourcing potential ideas for how we can increase delegation of SCR tokens. There have been multiple conversations or messages exchanged relating to the low % of delegation (~3.5% of votable supply; ~0.68% of total supply) and so we want to create a public thread to think about what we can do about this.
Please respond as a comment to this topic with any ideas you might have relating to the below ideas or if you have any questions for now.
The goal is to source ideas in the coming weeks and then to have a discussion about what we want to do by the end of the year or at the start of 2025.
Ideas
We are keen to hear ideas that delegates or community members might have in terms of:
Increasing the amount delegates as a % of voteable supply (aka what kind of activities or campaigns could we trial to get current SCR holders to choose to delegate)
Fair structures for increasing the amount delegated from existing treasuries (i.e. have the Foundation delegate, delegate part of the DAO treasury to an Event Horizon public pool, etc.)
Calls to action the founders and core team can share with those in their network they know who are holding SCR
Delegate campaigns - host one or a series of conversations highlighting existing delegates to help those choose who to delegate to
The Event Horizon team is willing to create a community pool for Scroll which the treasury and/or community can delegate to. EH would also provide the infrastructure for voter passes to be minted by retail voters to participate. This would largely parallel the Arbitrum community pool. Along with this, EH can run delegate incubator programs such as its current program with U Penn / Franklin DAO which is onboarding ~15 student delegates.
We would be open to hosting a community call to share more if there is interest.
Thanks for bringing this up! The suggestions are already good, I guess a delegate campaign or call to actions to founders / core team are a low-hanging fruit. Probably (institutional) investors are also an obvious target to bring in more tokens.
Regarding the number of total delegations and also the quality of contributions, maybe the Training for Delegates Proposal draft could be a good starting point.
Also, could you share how the votable supply is defined?
Thanks @bitblondy. I do agree that those might be low hanging fruit. And I do also hope that the Delegate Training proposal can lead to positive outcomes in terms of bringing in more delegates and getting more holders excited to delegate.
To answer your question:
Total supply = total tokens issued
Votable supply = total supply - locked/unvested tokens
Delegated supply = the portion of votable supply that is actually delegated
Hi, I’m not sure if it would work for delegates and voters. But an idea would be to make the experience of “working” at Scroll easier and more satisfying. I would suggest a forever question: “What would make your life easier within Scroll’s ecosystem?” Targeting this question to delegates and voters…actively completing subsequent proposals…all the while improving the voter experience could have a flywheel effect. Here’s a paper i’m working on. Notion – The all-in-one workspace for your notes, tasks, wikis, and databases.
Thanks for the explanation @eugene. So in the end, the votable supply is what we should be looking at, I guess, since the locked/vested tokens are not available for delegation?
An easy idea could be to create resources (e.g. blog articles) around delegation on Scroll. Maybe the governance docs could be linked in the general/technical docs. They’re not that easy to find at the moment, though, they’re a very good resource.
@maets23 that’s something we’re generally thinking about in other contexts, but not as it related to improving % delegated. That question seems more relevant to questions like why people choose to build on Scroll, or be a delegate at Scroll DAO, or work at Scroll in any capacity. We will continue to explore from the appropriate lens and welcome suggestions there
Yes. It gets a bit semantic when normalizing across the space as, like with everything web3, few things are standardized.
Good call on the docs! Just pinged some folks to see how we can get that approved
I was thinking about a yearly/semesterly event where people can join live calls where delegates pitch (get a poap) and then those that delegate (or update delegating, even if changing back and forth to the same delegate) get some reward in newly minted scroll tokens.
So basically this inflates the supply a bit and penalises (lightly!) those that don’t at least review who they’ve delegated to.
The reward can be tied to the amount one holds. So the incentive is a bit bigger for larger holders (basically you don’t get diluted whatever your % if you re-delegate)
Picture this: SCR holders stake their tokens, then delegate those staked SCR to delegates. The yield is the result of the % of participation of that delegate. If the delegate you staked to doesn’t participate your yield is sent to the DAO. Yield could be shared with the Delegate. Therefore, there are incentives to (1) hold SCR, (2) delegate it, and (3) stay active in the governance.
Apply simple gamification.
SCR delegators that have delegated for X months enter a raffle. Again, active participation could be incentivized by for example, giving a multiplier of raffle tickets based on the activity of your delegate…
Governance + Community + Growth alignment.
What if for each grant a builder or community gets, a % (10%?) needs to be delegated and kept that way to continue participating in grants or ecosystem opportunities. OR what if the Level Up graduates get a challenge that is delegating some SCR, so that they also become part of shaping the present and future of Scroll
thanks for the question @eugene! It was fun brainstorming, hopefully some native dApps or community efforts can come out as inspiration from these type of reflection challenges
Internet Computer has a clever mechanism for incentivizing delegation:
you get % yield for every vote you participate in
you can delegate to someone else to vote on your behalf (so you still get yield)
I think this has resulted in about 50% of their tokens being delegated
There are more nuances to their mechanism, one key idea is that in order to vote you have to stake your tokens for a certain amount of time. The longer they’re scheduled to be locked up, and the longer they remain locked the more influence each of your votes gets — and the more influence the larger the rewards.
Anyway, it’s an interesting system, comes with its own issues due to the fact that it’s highly inflationary, I haven’t read that post yet but they claim to have ways of achieving monetary soundness
@eugene Thanks for the clarification. I know there are some DAOs, where Tokens have to be locked or staked in order to participate in governance, hence the question.
Delegate pitch events sound like a cool idea @danielo, not sure if there should be rewards that inflate the supply, though. Maybe it’s worth a thought to have this on a rolling basis (small reward for checking in about the delegation). After all, there’s DAO with Delegates, that became inactive and still have large portions delegated to them…
Thanks @HumbertoBesso for sharing these interesting ideas. I do support some sort of delegate/delegation incentives, but wouldn’t make it too complicated for the beginning. @connormcmk “staked” voting is something we could discuss. I think Arbitrum is starting this with Tally, I would be curious how this goes.
We do have a “Training for Delegates” kind of working group, where we’re thinking about a program for delegates (and maybe a delegation reward upon successful completion), if anybody wants to join the discussion there.
The idea of inflating supply + distributing the inflation is that overall everyone who’s active ends up in the same place with a few extra tokens (slightly higher %). And those who’re disengaged get their % reduced a little bit. So is a system that rewards governance work and those who don’t do the work (free riders) then have to pay a bit for it.
Which is why the ICP system sounds interesting. Also as making it inflationary doesn’t reduce the DAO’s reserves.
I feel as though a few things are coming up so just want to recap some q’s to keep in mind:
how do we get SCR token holders to delegate (thanks for bringing up the ICP ex. @connormcmk, will look into it)
how do we get better visibility for current and active delegates to encourage SCR holders to delegate to them (back to 1.)
delegate incentivization (the Foundation commissioned a small report on this, should have some prelim findings by the end of Jan, 2025 - will be posted on the forum)
how do the various capital allocation strategies help/hurt delegation (not sure this is well understood yet; it relates to grants+treasury diversification and how we issue funds)
The Foundation gov team is going to be reviewing and planning ahead so we’re excited to dive into some of these ideas more.
Please feel free to add more if you have other ideas of how to increase the % delegated as portion of votable supply
Thanks for the summary @eugene, look forward to the findings around delegate incentivization.
@danielo Thanks for clarifying. I do understand where you’re coming from, and I agree that it’s an interesting system. Just keeping in mind, that the DAO serves the token holders, I would prefer not to inflate the tokens. I guess, also from a technical and operational perspective, it would be easier to implement such a program with some DAO funds, but that’s debatable of course.
Thanks @mexi. In terms of 1, leadership at the Foundation is working on this as far as I’m aware. We do want to do more of it.
We are currently thinking through what 5 could look like. There is going to be another airdrop later this year, so we definitely want to pair that with something like 2.
In terms of 4, that’s what we’re thinking the delegate day in Denver could serve. Let me know if you had something different in mind.
In terms of 3, how is that different than the profiles on Agora / the delegate threads on the forum? I’d be hesitant to have a new tool/place where such info would be displayed (unless it’s about improving the state of the forum threads or on Agora). Let me know what you’re thinking there
There are numerous programs that can be implemented and that require in-depth discussions about SCR tokenomics and its utility. I would be delighted to participate in these debates if they are currently taking place.
For now, considering that Scroll Season 2 is active as a potential future airdrop, I believe it would be a good idea to make it clear that holding SCR and delegating it contributes marks toward that future airdrop.
One approach to improving the percentage of tokens delegated is to enhance the incentives for token holders by providing more utility to the governance tokens themselves. Often, users are reluctant to hold tokens that don’t offer any additional value, which can result in lower participation in delegation and voting.
A concrete solution I’ve proposed to other DAOs is to allow governance tokens to be utilized within the broader DeFi ecosystem without sacrificing their delegation or voting power. This means that token holders could engage in DeFi activities—such as yield farming, staking, or lending—while still retaining the benefits of delegation. By integrating this dual functionality, you effectively create an environment where holding tokens is more attractive and beneficial.
