Gas Rebate Program Refund Proposal

UMA Protocol Funding Proposals
1

Request for Gas Rebate Program Refund

Summary

This proposal seeks approval from the UMA DAO to refund the Risk Labs Foundation for the expenses incurred through the gas rebate program. Over the past years, Risk Labs has supported the UMA protocol by providing gas rebates to incentivize community participation in voting. As the costs have accumulated, we now request a refund to ensure the continuation of this rebate program and the sustainability of the UMA ecosystem.

Motivation

The gas rebate program has played a crucial role in increasing voter participation, encouraging community involvement, and maintaining the integrity of the UMA protocol. To date, Risk Labs has disbursed a total of 75,705.70 UMA tokens and 39.255 ETH in rebates. This cost was ~$576k USD at the time of the transaction. The costs associated with this program have risen significantly due to factors such as the rally in ETH, fluctuating gas prices, and increased community participation. To ensure this rebate program can continue, which aids in the adoption of the UMA protocol, we believe it is essential to seek reimbursement for these operational expenses.

Refund Calculation Methodology

The proposal employs the following method for the refund calculation: Gas rebates paid in UMA will be refunded in UMA tokens. Gas rebates paid in ETH will be converted into UMA tokens based on the historical USD price of ETH and UMA on the day of the transaction.

Based on the methodology mentioned above, for the period September 2020 to December 2023, the refund would be equivalent to 123,309.48 UMA tokens.

Detailed Breakdown: Gas Rebate Program Report | Sept 2020 - Dec 2023

Request for Refund

In light of the significant contributions Risk Labs has made to support the UMA protocol and the community’s well-being, we request that the UMA DAO consider refunding the operational expenses associated with the gas rebate program. This reimbursement will enable Risk Labs to continue its dedication to the UMA ecosystem, ensuring its efficiency and long-term sustainability.

Voting

If the community is receptive to this proposal, we will proceed to conduct a snapshot vote with the following options:

  • A YES vote signifies approval of the refund request, resulting in UMA refunding 123,309.48 UMA tokens calculated based on the prices on the respective transaction dates to Risk Labs for the gas rebate program expenses incurred from September 2020 to December 2023. Additionally, voting YES indicates an agreement to continue the rebate program and cover the previous period’s expenses on a semi-annual basis.
  • A NO vote indicates rejection of the proposal, and the gas rebate program will expire unless a follow-up proposal is submitted to renew it under different terms.
4 Likes
2

Thanks for putting this together @brlom! The gas rebate program has definitely helped with voter participation and the growth of UMA. I would want to see this continue for sure. It has been a sizable cost over the years and continues to rise, so it is fair that Risk Labs gets compensated for this.

2 Likes
3

As someone who had over 100 votes in 2023 I agree with this. The gas rebate is what keeps voting consistent, as certain days when gwei is crazy would normaly made me skip the vote.

2 Likes
4

I agree with this proposal. I also voted over 100 times in 2023, which amounted to a meaningful amount of gas. If I didn’t receive any rebate for the ETH I spent, it would be more difficult to participate. I imagine other voters are in a similar position, so I do think the rebate program is effective, and RL should therefore receive compensation.

2 Likes
5

I support this proposal. For the long run, I also hope that we research how to reduce gas costs without reducing the oracle’s security. Is this something that Risk Labs is working on? If not, should the DAO fund this research?

2 Likes
6

I’m also a 100+ voter and without the gas rebate program the number of people voting would go down and we want to be getting more people voting and decentralise further.

I agree with @pemulis that we should find ways to reduce gas cost. With zk tech, intents, L2s, data availability solutions you would think their would be a path forward to maintain the OO’s security as well as provide a cheaper way to vote.

7

Active Governance participation can become pretty expensive with increasing gas costs, so having a gas rebate program is a great way to remove an additional barrier to active participation.

However, the Protocol must work towards a long-term solution that ensures that a gas rebate program is financially sustainable from a cost perspective, or that there would be no need for a gas rebate program because the cost of participating is little to nothing.

This can be achieved with a number of solutions which can be built into UMA’s existing governance stack.

8

Fully supporting it.
Gas rebate is essential for shrimps participation in governance :slight_smile: