The DAO Delegation Handbook V1
  • Introduction
  • Part 1: Structuring and Growing DAO Delegates
    • Summary
    • Understanding Delegation
    • The Strategic Value of Professional Delegates
    • Case Studies & Industry Benchmarks
      • 1inch
      • Uniswap
      • Push DAO
      • Optimism
      • Sky
      • Lido DAO
      • Gnosis DAO
      • Arbitrum
      • Aave
      • Rari DAO
      • Paraswap DAO
      • Polygon
      • Key Takeaways from Delegate Programs
    • Reframing Compensation
    • Effective Delegate Program Design
      • Delegation Infrastructure
      • Community Engagement & Visibility
      • Accountability & Performance Standards
      • Transparency & Reporting
      • Diversity & Governance Balance
    • Sustaining & Evolving Delegate Programs
    • Ready, Set, Delegate!
    • Appendices
      • Legal Considerations
      • FAQs
      • Glossary
      • Resources
      • Templates
      • Tutorials
  • Part 2: The Delegate´s Roadmap
    • Summary
    • Becoming a DAO Delegate
    • Getting Started: Laying the Foundation
    • Establishing Your Delegate Profile
    • Core Responsibilities of a Delegate
    • Essential Tools for DAO Delegates
    • Exemplary Delegate Practices and Case Studies
    • Scaling Your Impact as a Delegate
    • The Future of DAO Delegation
    • Appendices
      • Legal Considerations
      • FAQs
      • Glossary
      • Resources
      • Templates
      • Tutorials
  • About StableLab
Powered by GitBook
On this page
  • Overview
  • Compensation Structure & Eligibility
  • Implementation Plan & Timeline
  • Key Takeaways
  1. Part 1: Structuring and Growing DAO Delegates
  2. Case Studies & Industry Benchmarks

Sky

Overview

Sky (fka MakerDAO) was one of the first DAOs to implement a structured delegate program, setting a standard for governance compensation and accountability. The Recognized Delegate Program ensures that top delegates are incentivized based on their governance participation and delegated MKR.

Sky’s governance system includes strict requirements for participation, transparency, and ethical conduct, establishing a benchmark for DAOs implementing delegate compensation.

Compensation Structure & Eligibility

Compensation:

  • Originally up to 144,000 DAI per year, later reduced to 48,000 DAI per year, with a period in between where delegates made north of 1,000,000$ worth of DAI and MKR per year

  • Only the top six delegates by MKR delegation receive compensation.

Eligibility Criteria:

  • Delegation-based: Compensation is proportional to the amount of MKR delegated.

  • Participation-based: Delegates must maintain active governance engagement.

  • Code of Conduct: Delegates must adhere to ethical standards and are penalized for violations.

Governance & Oversight

Sky has a multi-layered governance structure ensuring delegate accountability and efficiency:

  • Governance Facilitators: Oversee governance processes and enforce participation standards.

  • Governance Advisory Council: Provides expert oversight and alignment with Sky’s long-term strategy.

  • Performance-Based Rewards: Delegates receive compensation based on governance impact metrics, ensuring quality contributions over passive participation.

  • Recognition & Accountability Mechanisms: Delegates must maintain high voting participation, provide rationale for decisions, and adhere to Sky’s Code of Conduct.

Implementation Plan & Timeline

  • Q1 2018 – Q4 2022 – Introduction of structured Recognized Delegate Compensation (MIP61). Launch of Atlas and Governance Scope as key pillars of MakerDAO / Sky (MIP101). Governance Scope detailing specifics of the delegate program (MIP113).

  • Q1 2024 – Adjustment to $48K/year per top-six delegate, with performance-based criteria.

  • Ongoing – Regular evaluations and adjustments based on delegate impact and governance needs. Strict anonymity requirements enforced, with a bounty for doxxing delegates leading to their offboarding.

Key Takeaways

  • Sky (fka MakerDAO) pioneered structured delegate compensation, setting the foundation for other DAOs.

  • Delegation-based and performance-based rewards ensure active governance participation.

  • Strict eligibility criteria maintain a high standard of delegate accountability.

  • Governance oversight and ethical requirements prevent misalignment and conflicts of interest.

PreviousOptimismNextLido DAO

Last updated 11 days ago

Page cover image