Uses component: CP4, CP63
Author(s): @sirj
Contributor(s): @ctcunning
Technical/non-technical proposal: non-technical
Impacts/modifies: CP5
Date proposed: 20223-09-06
Short Summary
Proposal for a new version for the Pool Onboarding Process (version 3). The current POP V2 can be found here.
High Level Objective
After testing, we’ve found that the current pool onboarding process is overly detailed, too slow, and a bit unclear. Further, with the DAO discussing different types and use cases for pools, we are rethinking what pool types the POP should apply to and how to make it fit the use case.
This proposal seeks to simplify by making the POP more similar to other Centrifuge Governance processes, which use the formula of Request for Comment (RFC) followed by discussion (during this discussion period the Centrifuge Credit Group can choose to put forward an assessment) and then a vote.
Background
The POP was originally conceived to give DAO members, and specifically CFG token holders, better control over how the protocol grew, which types of counterparties used the protocol, and which types of credit would be financed.
The POP should focus specifically on Open Pools not Closed or Portfolio Pool Types. The reason here is that Open Pools by design are open to investors, prioritized in the application, and will go through a Credit Group review. Private Pools as well as Portfolio Pools shouldn’t require a governance process and their onboarding will be discussed in a separate CP.
Additionally, the update to the POP (POP V3) is dependent on the passing of the CP63: Definitions of Pool Types & Categories proposal.
Why the POP exists
The POP is the Centrifuge governance process for onboarding RWAs into DeFi through the Centrifuge protocol as assets in Open Pools.
Curating quality RWAs financed through Centrifuge should be done in an transparent, open way that enables participation from the community as well as from experts.
Onboarding Pools to the Centrifuge Protocol is the responsibility of token holders and we need a process that balances diligence and risk assessment of pools with something that is efficient and approachable for issuers.
The RFC stage enables deep discussion and assessment of prospective Issuers and their pools, and the onchain vote enables CFG holders to decide which pools launch.
Detailed Description of Proposal
Pools should spend more time preparing for POPs, be more thorough and detailed, and have adequately reviewed and qualified their offering before bringing a POP to governance. To date, many POPs have been early stage, stuck in the “ideation phase”, and not ready for launch…the new updated POP is designed to onboard credit in a tighter, faster, and cleaner process.
It is essential that a prospective issuer markets and engages the Centrifuge community on their proposed pool.
We propose to shorten the POP to become 2 Steps:
- Propose a pool (RFC using the POP template) - minimum 7 day discussion
- During this period the Credit Group may choose work with the issuer to publish an assessment of the pool
- The prospective issuer should engage the community and utilize Governance Calls, 1:1 relationships and the Forum, in order to gather support for their POP
- Onchain governance vote to onboard Pool - minimum 7 day voting period :
After 7 days of discussion and engagement of Step 1 (the RFC) the issuer can propose the pool launch by submitting the democracy proposal. To speed up the process the issuer can petition the council to fasttrack the proposal.
This would allow any issuer, sponsor, originator, or fund to have a live, open Pool on Centrifuge in a minimum of 14 days.
The paragraph describing the POP in CP5 should be changed to reflect the proposal above.
Alignment to the Mission of the Centrifuge DAO
As the Centrifuge DAO works towards achieving greater decentralization, we must further seek to apply decentralization principles to the onboarding of RWAs through the POP process. At the heart of this endeavor is a dedication to encouraging decision-making through thoughtful governance and active involvement from the Centrifuge Community. Simultaneously, the aim is to improve the overall efficiency, transparency, and pace of the process, resulting in a smoother and faster experience for potential qualified issuers.
UPDATE 20/09/2023
The proposal has been submitted to GitHub as CP68 and is now final: https://github.com/centrifuge/cps/blob/main/cps/CP68.md
The OpenSquare snapshot has been set to start the 21st September 14.00 CET and will be open for exactly 7 days (ending 28th September 14.00 CET).
Good day, Community!
Vote here: 