REP is always a double edged sword. We often give it out freely to bootstrap the system but then are stuck with less-than-active members with real voting power as soon as the DAO enters what I will call it’s “second” or “sophomore” phase.
At that point, proposals are being made for real work. People are often deciding that freely dropping REP on anyone with a pulse (or who did some minimal thing) is no longer the right strategy. Unfortunately, this “give REP freely up front and then flip out when it’s out there” seems to be a common pattern.
Many questions arise in this thread.
Question 1: What is the current REP dynamic? How stable is REP?
@corkus made a great statement – “Inactive REP will get more and more irrelevant as more REP is minted for work all the time. I do not see a necessity to remove inactive REP from the system right now.” While this is true, the dilution of REP is a function of two things:
- Total current REP
- The rate of REP inflation through
- rate of proposals (activity)
- REP per proposal (value per activity)
My question for the DAO is then – assume person X has 1% of the REP right now. What is the most likely point in the future, assuming they do absolutely nothing to get more REP, that their REP is only .5% of DAO total? How about .1% of DAO total? That is, what is the projected “natural dilution rate of REP?” If the answer is “pretty soon, because we are active and did not give out insane REP at first and are not being stingy handing out REP now for work done” then this becomes, as @corkus suggests, a non-issue soon enough. It ain’t broke. BUT BUT BUT (big but) if it will be 6 months or a year before significant dilution then you might have a problem.
You can solve this in a few ways:
- Slash REP for people who don’t “behave” where “behave” may mean:
- If they don’t participate in some way
- If they do things the group decides are not cool (perhaps selling/renting voting rights)
- Adjust the REP structure
- A proposal made before date X was worth 50 REP? Well, now that same action is worth 500 REP. Dilute the hell out of “old REP” so that current participants are largely rewarded.
Slashing REP is technically difficult (I believe) as you can currently only slash 1 account at a time with the tech. And don’t get me started on the gas fees and hence the cost to vote every zombie out…
Adjusting the REP distribution rate will definitely get people fired up as well. “zOMG… I just did some work last week and now that same work is worth more, no fair!” will be a common refrain.
Question 2: As a matter of our CULTURE (not technology) should REP be fungible (sellable/rentable/tradable)?
This is a great question and, truly, should be asked prior to launching a DAO . But most people don’t know to ask that question… so now, mid-stream, people want to change or at least define the rules (and since lots of people joined the DAO when these rules did not exist, there will be some who disagree with whatever is chosen – this would be much less the case if it were part of the original package).
I think the answer to this question lies in understanding what the DAO is meant to be for. How can REP fungibility be abused? Is the DAO able to even detect it in the first place if it is verboten? The case that brought this question to the fore is based on a blatant case – someone is stating they want to sell their account (which includes REP). If it is something that can get you REP slashed to oblivion, or kicked out of the DAO completely (in cases where DAO members can be identified) then you can expect more sneaky versions of this to happen if advantageous or valuable. Human nature is to optimize-ish.
In the end, it really matters what you are trying to do, how REP can be abused in your specific DAO, and how detectable such abuse is. Perhaps the best solution lies in the utopia condition where you have many many active, REP earning members doing all sorts of tasks and spreading the REP footprint such that nobody really has enough to do something on their own or with a small cabal, but they do have enough to make it worth voting semi-regularly on things they feel strongly about.
I believe the current concern is specifically a growing pain concern that many DAOs face/will face as REP is now distributed in an uneven manner AND the DAO is getting traction. The complication is that enforcing any REP rules other than the most basic (like not active = REP slash) may require an onerous human governance component as well as the inability to allow anonymity and pseudanonymity within the DAO – basically weakening two things that make DAOs appealing to many people.
There is the solution I suggested – make current REP radically less valuable by inflating rewards. Kill the half-dead whales and force the function “be here or be gone.”
P.S. In GenDAO, we passed a REP slash proposal for inactive members. You can see it here