Votable Supply Adjustment Proposal

[eugene]

Proposal Title: Votable Supply Adjustment

Proposal Type: Governance

TLDR

This proposal suggests a temporary delegation of 1.5m SCR from the Scroll DAO treasury to 46 active delegates to boost votable supply and reduce quorum risk. The delegation, managed via a Foundation multisig, would run until October 2025. Delegates who become inactive may have their tokens reallocated. The goal is to ensure proposals can pass even if top delegates are unavailable.

Summary

This proposal is meant to provide an initial idea for how Scroll DAO can help improve the votable supply. Following the governance calls on Apr 16, there was a clear desire to focus on increasing votable supply as opposed to decreasing the quorum.

This idea involves setting aside 1.5m SCR from the DAO treasury to a new multisig managed by the Foundation. The 1.5m SCR would be delegated across 46 delegates who have voted on at least 2/3 proposals through the April voting cycle AND attended at least one call or left at least one pertinent comment on the forum.

This would be a temporary delegation that would last from the approval of this proposal through the end of October, 2025 (just after the first unlock).

We are mainly seeking approval for the:

1. Qualification criteria
2. The formula
3. The total amount to be delegated

The data collection was done manually, so we will address any potential errors as they arise until the proposal is approved.

It is important to stress that this program alone is not meant to sustainably increase the votable supply. Rather, this program is meant to provide an initial kickstart, to which additional efforts shall be added. Those efforts are beyond this proposal and will be addressed at a future date.

Motivation

We need to raise the active votable supply.

• Votable supply = the proporation of the total supply that is currently able to vote (delegated)
• Active votable supply = the portion of the votable supply that votes a majority of the time and is active in at least one other way (calls or forum)

As the April voting cycle, the following data give a sense of the distribution of active voting power:

• Total voting power (vp) amongst those who have voted at least on 1/3 proposals (68 delegates): 2,676,700
• Total vp amongst those who have voted on at least 2/3 proposals (56 delegates): 2,419,471
• Total vp amongst those who have voted on 3/3 proposals (38 delegates): 2,165,731
• Quorum: 2,100,000
• The top two delegates have a voting power of 887,149 between the two of them.

We are in a position where if a few delegates, especially the top ones, end up having to miss a vote for any unforeseen circumstances, votes are likely to not hit quorum. This can act as an unnecessary bottleneck for the DAO and may result in increased apathy if not addressed.

With this in mind, we are proposing an increase to the votable supply of 1.5m SCR from the DAO Treasury and to distribute it to the most active voters (defined below).

The reason for requesting 1.5m and not less is to ensure that if the top few delegates are not able to vote, we can still pass quorum. If we use the same formula outlined below with 1m tokens, it would still not be possible to pass quorum without just the top 2 delegates.

• The 46 most active delegates (see Criteria below) a total vp of 1,933,199
• Upon distributing 1m SCR, the total-vp-1m would be 2,933,199
• The total-vp-1m without the top 2 delegates is 2,025,528
• If we distribute 1.5m instead, the total-vp-1.5m would be 3,433,199
• The total-vp-1.5m without the top 7 would be 2,115,471.85

There are no clear conflicts of interest for this proposal as we see it.

Execution

Operational

The operational process will be as follows:

• If approved, the governance team will set up a new multisig that will receive the 1.5m SCR
• The gov team will delegate that SCR via the multisig as outlined below to delegates

There will be some potential clawbacks of delegation before Oct, as follows:

• There will be reviews of the data at least quarterly, if not monthly, to ensure that those who have received delegation via this proposal are actively voting
  • For any delegate who received delegation from this proposal and misses more than 1 vote during the period will lose this delegation
  • The revoked delegation will then be re-distributed evenly to the set of delegates outlined below
• If there is a significant increase in votable supply beyond this program prior to October, the governance team may choose to undelegate some of the tokens
  • This would be done proportionately to the allocation and those funds would be sent back to the DAO treasury
• If the DAO puts forth a vote to terminate the program early and it gains majority support, then funds would be sent back to the DAO treasury

There are no new tools introduced here. We will track the work on either google drive or notion.

Personnel & Resources

The Foundation governance team will set up the multisig, transfer funds, and process the delegation. Eugene and Jamilya will own the project, with support from others as needed.

Anyone in the community will be welcome to provide feedback and hold the program accountable on the forum.

Financial

The overall budget for this proposal is 1.5m SCR to be used for delegation. These funds would be sent to a new, Foundation-managed wallet and funds would be sent back to the treasury by the end of October.

There is technically is no cost to run the program for the DAO, as no DAO funds will be needed to pay personnel or for tools. The Foundation will cover nominal costs that arise (e.g. setup of a new multisig, etc.).

Evaluation

We will include two sections here:

1. How to distribute the delegation
2. How to evaluate the program

How to Distribute the Delegation

First we set up criteria of who qualifies for receiving delegation as part of this program.

Criteria:

• Voted on 2 of 3 votes through the April voting cycle, and
• EITHER attended one call OR posted once of the forum

This resulted in a table of 46 delegates, including their name and voting power.

From there, we found a formula that would help us figure out who to start with a 10k distribution to the largest delegate, and then given each subsequent delegate an evenly increasing delegation.

This was then turned into a formula we could use in Google Sheets

=10000
‘+’ (ROW() - ROW(###))
‘*’ ( 2 * (1500000/46 - 10000)
/ (46 - 1) )
Where ### was the cell where you put the starting 10,000.
The + and * in the forumula need to be in ‘’ because of markdown.

This resulted in the following table:

Note on sources:

• We used a dune dashboard that featured the voting power and delegate name
• This is the spreadsheet you can use to reference this data. Feel free to make a copy and play around with it.

How to Evaluate the Program

• Do the votes in the June-Oct voting cycles pass with at least 1m more votes than quorum?
• Are proposals able to pass if one or two of the top few delegates are unable to vote in a given month?
• Does the overall votable supply change enough so that this program can pull back all delegation and votes still pass with at least a 750k margin?

Conclusion

This proposal outlines a temporary delegation to 46 existing delegates using 1.5m SCR from the DAO’s treasury through the end of October.

If you believe you qualify but weren’t included, please reach out to the gov team.

[jengajojo_daoplomats]

Thanks @eugene for this proposal. This proposal comes at the perfect time and strikes a good balance between performance and inclusivity. I believe that this is a first iteration of this program and it will evolve based on our collective learnings as a DAO.

Keeping the first iteration simple is the best way forward and it broadly distributes VP between several delegates. Hence, I am in favor of this proposal.

[slobo.eth]

This is an innovative approach to a common challenge. I appreciate that it’s designed as a temporary solution, with a clear expectation for evolution over time.

[danielo]

I’m happy to support this as a short-term solution, evaluate and evolve from there as needed.

I see some concerns about large delegates (those with large trust) losing power and said trust potentially going to less trusted parties. Not in the sense of security, but in the sense of decision quality.
That being said, I think this is an acceptable tradeoff to increase decentralisation enough to have some operational safety in the DAO. And although I have concerns about the delegate training program being enough to upskill delegates, it’s now a nice coupling of initiatives.

Ideally, each delegate would have strong strategy, organisation design, and technical skills. How to get there is something I believe we must figure out sooner rather than later but not a blocker for this proposal.

[EthereumTGU]

Not supporting the Votable Supply Adjustment Proposal, in the current form.

While we understand and appreciate the motivation behind this proposal (addressing quorum fragility and increasing votable supply), we will not be supporting this proposal for the following reasons:

The delegation curve disincentivizes active delegation.
By evenly boosting the voting power, the proposal flattens the distinction between delegates who have organically earned support and those who haven’t. This undermines the incentive for users to delegate to active contributors.

There is no distinction between delegates who have earned support and those who haven’t, and there is no distinction between being trusted by 500 users and 1 user. We propose to use a more dynamic approach to delegation, wherein the formula takes into account the number of delegated addresses.

---

Just a reminder, the proposal is a temporary fix, not a sustainable solution. This approach doesn’t solve the root issue of low delegation and participation. Delegating from the treasury might help in the short term, but it doesn’t build long-term resilience or encourage organic engagement from token holders. It feels more like a bandaid than a strategy.

We are happy to engage further, collaborate, and improve the proposal to be more sustainable and equitable.

Regards,
Ethereum TGU

[SEEDGov]

Hi!

First of all we support the idea of having a larger VP pool that will ensure quorum for the upcoming initiatives down the pipeline while incentivizing new delegates to join Scroll governance. Although the endgame is to have circulating supply becoming delegated supply and taking an active role in votings, this intermediate solutions help to smooth that transition in an organized yet decentralized way.

Nonetheless, we do have some suggestions regarding the allocation mechanism of the proposal. It’s worth to mention that despite being “young”, the Scroll DAO has had a fair amount of activity tractioned by the co-creation cycles, the core units leadership and delegates commitment. In that sense we believe those aspects should be leveraged not only for the purpouses of this proposal but for setting the bar for overall delegate activity in any future initiative.

We then propose to have a weighted approach to VP allocation that accounts for this activity alongside the current VP that delegates have and the spirit of the proposal regarding balancing VP. This is: leveraging activity on the distribution instead of only in the criteria.

An example - 40/60

We could have 40% allocated per participation requirements and 60% per voting power adjustement based on the initial formula.

• Participation - 40%

As mentioned in the criteria, voting, attending governance calls and commenting on the forum are part of the delegates core activities or -better said- are the outcomes or showcase of delegates work. A formula that should account for that 40% of Total Participation could include the following tasks and weights:

1. Voting in the past 90 days (Participation Rate - PR ) - 30%
2. Voting in the last month (Onchain Voting - OV) - 30%
3. Having posted in the forum (Forum Post - PF) - 25%
4. Having attended one governance call (Governance Call - CA) -15%

• Voting Power - 60%

Naturally, current VP is to be considered as an allocation factor, but reducing it’s weight within the formula should leave some room for having activity as a contributing but not determining factor. Following the example, a 60% of the initial formulas result would be incorporated into the final allocation.

---

To conclude, we ran a quick mock test in order to leverage this new formula. In case you want to experiment feel free to fork the doc, follow the instructions and play around if you want to but the core idea is to ignite a conversation regarding what activity/tasks we value as Scroll delegates and how we can factor those in this initiative which can surely be refined from the original one.

Feel free to reach out if any questions or comments!

[Curia]

Thank you for the proposal @eugene I like the idea of this proposal to addressing the quorum issue by distributing more 1.5m SCR in temporary voting power across 46 active delegates to increase long-term voting participation. In the case of the previous Euclid Upgrade proposal, if the top two voting power holders hadn’t participated it might not have passed.

Additionally Question:

• The first one is the formulation for voting power distribution. The current method of calculating how temporary voting power should be distributed among active delegates seems unfair. It caps large voting‐power holders too sharply and over-amplifies small ones. For example a delegate who already has 20,000 voting power only receives 30,000 from the program, bringing them to 50,000 total. While someone with just 2,000 voting power also gets 50,000, ending up at 52,000. Flattens ranking. By design, half of the delegates converge on nearly the same final voting power, so the extra tokens disproportionately favor the smallest delegates. Could you clarify the rationale behind this distribution logic?
• Regarding wallet delegation mechanism, how will the delegation of 46 wallets be managed? Is the delegation being done manually across 46 wallets and will the Scroll Foundation be managing this? Is there a more efficient tool or automated process available (eg. Partial delegation)

Suggestion:

• I think we should consider distributing the voting power equally among the 46 delegates, with each receiving 32,608 SRC. This approach would bring fairness by better matching the effort of consistency delegates while maintaining the current delegate ranking. Final voting power should mirror the original voting power ordering not compress it into a flat band.

Voting Power Comparison:

• New Voting Power without top 2 delegates (After Adjustment)
  New Total Voting Power: 2,480,833.24
  Previous Total: 2,525,045.80
  Difference: -44,212.56
• New Voting Power without top 5 delegates (After Adjustment)
  New Total Voting Power: 2,168,227.56
  Previous Total: 2,271,222.73
  Difference: -102,995.17

This method results only a small decrease on New Voting without top2 and top5, showing no significant change compared to your method.

Also we believed there should be some clear accountability measures for delegates receiving voting power through this initiative to ensure their consistent participation. For instance:

• Define minimum performance standards (e.g., require each delegate to publish their voting rationale in the designated forum thread and to maintain at least X % voting turnout.)
• Tie continued delegation to adherence: delegates who fail to meet these criteria risk removal of their temporary delegated voting power.
• I think having a monthly eligibility reviews to evaluate each delegate’s performance against these standards and adjust the roster accordingly, so new, high-performing delegates can join and inactive delegates are removed.

[DonOfDAOs]

I greatly respect and appreciate the Scroll team for putting this together and getting this discussion started. It is much needed.

That said, I’m not in favor of a model which in effect heavily punishes the largest delegates. It seems misaligned that delegates who have earned the least delegations on market, are rewarded with 5 times the voting power as those delegates who received the most delegations on market. In practice, the largest delegates would have benefitted far more by having not garnered any delegation to date, than to have even tried.

ex. a delegate with 6.09 SCR is earning 55,217 in delegated VP, while delegates with between 510,000 SCR and 70,000 SCR earn less than 15,000.

(Though, I would support a public access pool for quorum achievement if we do want an equal-access pathway. This would not alter the relative weightage of each delegate in any meaningful way and would still accomplish the goal of distributing VP.)

@SEEDGov

To conclude, we ran a quick mock test in order to leverage this new formula. In case you want to experiment feel free to fork the doc, follow the instructions and play around if you want to but the core idea is to ignite a conversation regarding what activity/tasks we value as Scroll delegates and how we can factor those in this initiative which can surely be refined from the original one.

I appreciate SEEDGov taking the time to construct a revised model, and would go as far as to say, the skew should be greater toward an 80/20 split (@SEEDGov your variables participation and VP weight may be inversed on the sheet, unless I’m misunderstanding the variable names.)

@Curia

I think we should consider distributing the voting power equally among the 46 delegates, with each receiving 32,608 SRC. This approach would bring fairness by better matching the effort of consistency delegates while maintaining the current delegate ranking. Final voting power should mirror the original voting power ordering not compress it into a flat band.

I am also open to @Curia 's proposed solution, though I would suggest the distribution be either:

• The largest delegation recipients: the top 46 delegates who have voted at least once.

Or

• The most dedicated voters: A tier model, where added vp is ascribed to 3-time voters; those who have continued participating since inception.

The present state of having voted twice seems like an arbitrary middle ground.

I would be open to expanding the total delegation amount if any of the above models don’t full fill the desired ‘x top delegates could be absent and a proposal would still pass’ requirement.

[kevinknielsen]

We think it would be helpful to summarize a couple of the big-picture viewpoints here. We understand why the Foundation proposed doing things the way that they did as outlined in the original post. The current formula increases the adjustment linearly by row number — so smaller delegates (lower current voting power) get more, and those closer to the top get less. If you have very little voting power (e.g. 2K–10K), you get the highest boost (up to ~55K). If you’re already at ~40K or more, you get ~20K or less. @SEEDGov is offering an alternative that is a bit more nuanced with weights, but at the end of the day, delegates with ~40K voting power are still receiving ~20K-30K and delegates with <1K are still receiving ~40K-49K. The big difference is @Curia‘s suggestion, saying ‘let’s just boost everyone equally.’ We tend to agree with that stance.

We are attempting to cast a wide net here by setting low qualification criteria. If 46 delegates meet those criteria, we think it makes more sense to offer a blanket X amount per delegate for meeting those requirements. If the end goal is to reduce reliance on the top-2 delgates by voting power, and a static increase in VP among these 46 delegates accomplishes that, why add the complexity of scaling or weights at all?

[connormcmk]

What about just giving everyone an extra ~30k delegated SCR? Seems like that achieves the goal while keeping it simple and still respecting the trust earned by the highly delegated accounts.

This would mean about delegating about 1.2m SCR from the treasury (assuming there are about 40 qualifying delegates)

[blockful]

@blockful supports the direction of this proposal as a necessary short-term fix for our quorum challenges.

We’d like to suggest a few refinements

Key Points:

• Equal Distribution: We strongly agree with @Curia and @connormcmk that distributing tokens equally between all the active delegates is less error-prone, fairer, and much simpler to execute. This approach raises the bar for everyone at the same “height” and avoids unnecessary complexity. We still appreciate @SEEDGov’s efforts on improving the formula and running simulations on the spreadsheet.

• Sybil Resistance: An attention point for both the current proposal and if it’s needed again in the future is sybil resistance, since anonymous delegates could actually be the same actor accumulating delegation across different profiles. This should be addressed in implementation.

• Alternative Approach: Since the proposal threshold is 50M SCR tokens (which only the top 6 token holders have) and all past proposals were submitted by the foundation because they have the governor’s manager role, a possible path that would be equally effective is decreasing quorum for now. This doesn’t increase security risks because 50M SCR is still needed to submit a proposal, which would likely win the votes anyway.

• Implementation Tool: The Franchiser contract could be an effective tool for managing the delegation distribution. We’re interested to hear how the Foundation plans to operationalize this and are happy to support the implementation as well.