This proposal was revised and re-uploaded on February 7th, following the request from Celo Governance Approvers to receive more time to evaluate the implications and functioning of the on-chain element of this CGP.
The revised CGP pull request is created here and the updated PR with Payload and tests can be found here.
Explanation of what happened to the proposal
CGP 115 reached the required quorum and YES votes (98.9% YES) on February 2nd; however, the Celo Governance Approvers, the Celo governance stakeholders involved in ensuring Celo Governance Proposals are safe to execute, requested more time to review the proposal properly.
After I, as the proposer, agreed with the additional review time, additional considerations started to emerge related to the ~81M CELO this proposal initially aimed to send from the Mento Reserve to the Celo Community Treasury. Various stakeholders shared their concerns with the Mento Reserve parameters post-transfer, the time-sensitive steps required to finalize the transfer and rebalance the reserve, and the effect the transfer could have on CELO utilization. As a result, the transfer of CELO from the Mento Reserve to the Community Treasury has been removed from this CGP and will be voted on in a separate, future proposal.
We intend to submit the revised CGP to Celo Governance on February 8, 2024.
To support the review of this proposal, we produced a FAQ with answers to the most frequently asked questions and two visuals to simplify understanding this proposal.
This proposal directly results from the Governance Development Sprint ahead of CEL2, which started in October 2023, and considers the information from the Existing Governance Tools and L2 Governance Framework and Celo Community Proposals and Treasury Allocation from Apr 2020 - Nov 2023. The initial direction was shared in the Forum in November and presented in Kuneco in December. The draft has been up on the forum for community input for about two weeks. Now, all changes have been merged, and the proposal is ready to move towards a vote.
Description of the proposal
The proposal sets a new standard for Celo Governance operations and Public Goods funding.
There are three sections of this proposal that together aim to accelerate Celo’s vision of creating a regenerative digital economy that creates conditions of prosperity for all.
Establish the Celo Governance Guidelines v0.1
This section describes the Celo Governance Guidelines V0.1. The Governance Guidelines separate the Celo Governance Proposals into different categories and standardize the process for the voting, execution, and resubmission of proposals. It also transforms the role of Celo Governance Proposal Editors to a more active role that ensures proposers correctly follow the Celo Governance Guidelines, referred to as the Governance Guardians, and elects the first batch of Guardians. Finally, it raises the deposit for submitting a proposal from 100 to 10,000 CELO.
Read the detailed Celo Governance Guidelines document here.
Mento reserve: Return a combination of cUSD and CELO
The section describes the process for utilizing a share of the 95M CELO to be returned to the Community Treasury to mint cUSD to the Celo Community Treasury and return the remaining CELO. The Mento Reserve will mint 10,000,000 cUSD in exchange for the equivalent value of CELO using the 30-day moving average price on January 22nd, 2024, using CoinGecko’s price feeds. The remaining 81,633,000 CELO will be sent to the Celo Community Treasury at a later stage through a separate proposal (revised from the initial proposal to reduce complexity and risks). This minting of cUSD will grant the Celo Community Treasury a significant amount of stablecoins for operations, increase the distribution of cUSD, and increase the stability of CELO, which the Mento reserve also benefits from.
Read the detailed revised Return a combination of cUSD and CELO document here.
Fund the Celo Public Goods Budget H1 2024
The section describes the process of earmarking a budget of up to 1,600,000 cUSD and 700,000 CELO to fund Celo Public Goods in the first half of 2024 (H1) to streamline funding distribution to key Celo Public Goods, such as Celo Regional DAOs, Celo Project Incubation, and Celo Grants, run Celo-native Quadratic Funding (QF) and Retrospective Public Goods Funding (RPGF). The decision on which specific groups are funded from the budget will be made by Celo voters through a to-be-established Celo Public Goods Snapshot Space. A newly elected group of Celo Public Goods Stewards will administer and facilitate the distribution of resources in line with the decision made by Celo voters.
Read the detailed Fund the Celo Public Goods Budget H1 2024 document here.
See the Flow chart and Sankey diagram below for a visual representation of this process.
PR with Payload
The PR with Payload for this proposal has been written and tested in collaboration with Mento Labs. Please find the JSON with descriptions and a test here.
Minting an additional 10,000,000 cUSD will decrease the overall Reserve Ratio to
approximately 3.51. This means each cStable would still be backed by over triple the value. As long as the share of Stablecoin collateral equals or is larger than the outstanding amount of cStables, which is currently the case, the new Reserve Ratio should not lead to significant
additional risks for cStable users.
Budget Deficit Risk: By adding a spending cap on certain categories, Celo might potentially miss out on funding valuable initiatives that weren’t proposed in time or exceed the available budget. This risk is reduced by weeks of conversations with the groups who were previously funded by the Celo Community Treasury to have reasonable indications of budget requirements.
Centralization Risk: By establishing the Celo Public Goods Multisig, some centralization risk is created as a smaller group of individuals have temporary custody over some Celo Community Treasury resources. These risks are reduced by having a diverse set of individuals with major skin in the game involved, providing monthly reports backed by on-chain data, allowing the Celo Community Treasury through Celo Governance to redeem its assets at any point, and committing to return any left-over resources by July 31st latest.
Governance Development Sprint
Existing Governance Tools and L2 Governance Framework
Celo Community Proposals and Treasury Allocation from Apr 2020 - Nov 2023
Potential Celo Governance improvements
Celo Governance Guidelines
Return a combination of cUSD and CELO
Fund the Celo Public Goods Budget H1 2024
CGP 102: Mento Reserve Returning CELO
Simulation - Mento Reserve Returning cUSD and CELO
Celo Reserve Website