The battle for Rome's treasury, part 3

With an impending attack on the Houses of Rome treasury by raiders (see part 1 and part 2 of this series for a summary), a new proposal to overhaul the project's governance is on the way. This is a make it or break moment for Rome, and a long time coming. But before we dive deep into it, let's make two points very clear:

1) Dissolving the treasury through a DAO vote without remodeling governance first would lead to an illegitimate decision; a decision that would, at the same time, work against the best interests of the development team (Sempronia) and the community of stakeholders/investors (constituted by members of the sub-DAOs Chaos, Kings, Moonsama, Grapes, Spoons, Kek, and Consul, as well as token holders unaffiliated with any of the houses);

2) The argument that RFV must be defended is baseless. Raiders are knowingly making a speculative play, preying on a project with good fundamentals but poor management and precarious governance rules. The project, however, has a strong community, which supports a long term vision for Rome, and raiders are clearly outnumbered, despite having deep pockets. There is still opportunity to rework governance, and this reworking is grounded on precedent (the shift to Houses of Rome without a DAO vote), and the fact that RIP-001, which was supposed to formalize governance, was never put to vote. An actual RIP-001 was submitted today, April 24th, containing checks and balances against opportunistic or eccentric proposals, and imposing greater accountability on the project and team as a whole.

Treasuryphobia

The treasury should not be treated like a liability or a hot potato. Sempronia is correct to feel uncomfortable with proposals that mistake Houses of Rome for a hedge fund: ever since the shift from RomeDAO to Houses of Rome, the treasury is no longer a fund, but budget for game development and related expenses. Nonetheless, pretending that 4 million out of 20 million USD is enough is weird, and giving away the budget for an ambitious game development project to a band of raiders is a wildly misguided decision (I'm being euphemistic here). It is understandable that the developers feel the weight of the responsibility brought forth by their ambitions, but running away from them is something that is in stark opposition to the way they have presented themselves so far.

It is also concerning that the spreadsheet that supposedly accounts for the runway the team is comfortable with is based on static expenses over a long period of game development, coming off as both amateurish and unrealistic. Much more so when there's been a lot of big talk of publishing an in-browser, high quality, 3D experience, with story, animations, and multiple campaigns.

There are some folks in House Sempronia who are opposed to this vision and cognizant of how reckless the initial response was, and some members have since signaled they have changed their minds. Let's hope that they realize how misguided that post was, and listen to the community's proposals for reforming governance, putting an end to hostile takeover attempts, and making Houses of Rome more accountable to its houses and investors.

(Re)forming governance

A sum of balances posted by House of Chaos member Villius LXXXIV reveals a predictably lopsided distribution of tokens. By Villius' estimates, the wallets of treasury raiders amount to approximately 160k sROME as of June 23rd, requiring a considerable effort from the broader community to outvote a liquidation proposal.

It is unfair to cave in to a governance attack, when there is opportunity to rework, or better yet, work out for the first time, how the DAO is supposed to govern itself. The image on this blog post's header is a screenshot of the discussion page for RIP-001 in the Rome forum, taken on April 24th. RIP-001, defining governance, was never put to vote or even discussed. The community has, so far, been working with makeshift ad hoc rules, and Snapshot voting was entirely bypassed when the project pivoted from OHM fork with a dash of GameFi to GameFi with a dash of OHM fork, a change as fundamental as liquidating the treasury.

It is time to actually figure out what RIP-001 is, and have clear, strong governance rules that preserve the project from capture. A proposal drafted by members of House of Chaos and House of Kek, improving upon a document written by House of Consul, was submitted for discussion on April 24th. Here's a summary:

Structural changes in RFC and RIP evolution path, from creation to Snapshot.

Implementation of In-House as sub-DAO governance.

Changes in the Senate and Senator role in governance.

Establishment of the Bank of Rome sub-DAO as an entity responsible for treasury management.

Changes in Forum posting accessibility.

Changes in sub-DAOs creation process.

Taking houses seriously

Houses were a fundamental selling point of the initial RomeDAO design, and are still an important part of the Houses of Rome project, as the name itself makes clear. Houses were always supposed to have considerable roles, with the Senate — composed of senators from each of the houses — involved in both governance and gameplay. The foundation of houses required stake in the game, and House of Kings, House of Moonsama, and House of Spoons were formed after the initial launch, before campaign one was supposed to begin, due to efforts from their respective constituents in pooling the tokens required for house creation. Houses must be involved in the governance process, and Senators need to assume a larger role in how policymaking is conducted. This would also be an opportunity to welcome latecomer Animus Development, which has received grants for developing minigames for the Rome ecosystem, as a formal house.

RIP-001 seeks to integrate houses in Rome's governance and policymaking process, with clear rules, checks and balances, and multiple instances for open, organized discussion and deliberation. Before a proposal is submitted to Snapshot for voting, it would have to be initiated within one of the sub-DAOs, go through deliberation and discussion there, sent to an all citizens discussion forum, and approved by a Senate vote. This would guarantee that proposals would not be fast tracked without proper deliberation and time for arguments to be adequately presented. It would also make the role of senator, as a representative of the people, more than a cosmetic Discord role. SPQR.

Snapshot votes would require a 15% quorum and a 3/4 majority for approval. If a proposal involves budget allocation, it would need to be submitted to the newly created Bank of Rome sub-DAO, with specific internal rules for procedure, ensuring accountability for the entire Houses of Rome project.

The RFC for RIP-026, tackling the issue of expenditure of treasury assets, was also updated after community discussion.

The myth of RFV

Treasury raiders make a big noise about RFV (risk-free value), a relic of OHM fork times, and frame the conversation around liquidation as if there is no alternative other than dissolving the treasury if funds are inactive and the token is valued under RFV. This would make perfect sense if: a) Rome was still an OHM fork and pledged to defend RFV; and b) RFV meant anything to begin with.

Olympus' approach has always been "it's a ponzi until it isn't": a fake it till you make it attempt to have its OHM token be the "reserve currency of DeFi" by using complicated rhetoric and an alphabet soup of metrics, such as RFV, BCV and POL, in a system that is obtuse and deliberately ambiguous, in hopes that adoption eventually legitimizes. One of these ambiguities directly relates to the project's risk-free value metric, and the need to defend or not defend that value as a floor for the token. While Olympus itself is straightforward in saying it has no obligation to defend its token above the value of 1 DAI, it has benefited enormously from the confusion, since many believe they have a risk-free stake in the project, represented by a portion of its treasury.

Many OHM forks have used the same approach to launch during OHM fork fever, and raiders use the same discourse to propose the dismantling of treasuries, with little concern to the communities that have, in a few cases, remained with the forks after their tokens plummeted. Raiders exploit dysfunctional governance systems as if there were no social norms binding these communities beyond the cut and paste gitbooks that they have from their Olympus clone days, but the exact opposite is true of projects such as Rome.

Olympus was an attempt to will something into existence by sheer illusionism or magical thinking. And as in magic (and magick), things can and do work as long as the illusion is maintained. Once it's gone, everything crumbles like a house of cards. Why insist in Olympus' financial technobabble, when the development team itself recognized that the model was doomed to fail and pivoted to Houses of Rome, a purely GameFi project that just happened to use Olympus style bonds and emissions to capitalize itself and distribute tokens, effectively retconning its OHM fork origins into an ICO? Why carry out a DAO vote to dissolve the treasury, if the team itself moved on with said pivot without a vote?

Olympus' actual product is not its token, which will never be the "reserve currency of DeFi", but its community. That's the only reason why Olympus still exists: its main product and strengths are not a currency or protocol-owned liquidity services, but the people who have stuck around with it, and the social links and partnerships that it established.

Interestingly enough, community and trust are exactly what House of Rome would lose if the treasury is dissolved. What would remain is a 20 or so person team of anon devs, with a severely reduced budget, prone to accusations of mismanagement and fraud, and what amounts to, so far, vaporware.

We can do better.

[read part 4 of this series here]