Close ESD > ESS Migration Pathway

Overview

In the past weeks the community has taken a number of steps to help secure the governance process of the Emptyset DAO. Extending the voting period, increasing the quorum, & liquidating the treasury all help secure the governance of the proctol which in turn reduces risks for protocols utilising DSU within their protocol.

The migrator as it stands holds 37% of the total ESS supply, these ESS represent the outstanding ESD tokens within the V1 DAO, wallets and LPs. In order to continue to improve the security of the V2 protocol and remove potential governance risks, I think it’d be prudent to remove the ability for ESD to be converted to ESS at some point in the future.

Effect

This move would neutralise roughly 700 million ESS (at present) from suddenly becoming active in governance, via being bought cheap cheaply or through an inifinte mint bug in the dormant v1 DAO contracts.

Technical Implementation

I’m not sure about the specific actions required to neutralise the migrator, I’ll leave that up to the more technically minded :see_no_evil:.

Timeline

The current governor has a 7 day voting cycle, which would be too short to provide notice to token holders who haven’t yet migrated. So instead of putting this up to a vote immediately, we should use this post to signal the intention to do.

Within the next month or two, given a consensus in the community I will propose this as a proposal.

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Overall we support this proposal.

Benefits

As Lewi stated, the status quo represents a small, but non-trivial risk of a latent unknown bug increasing the effectiveness of a governance attack on the v2 DAO. Reducing the overall contract complexity of the protocol by fully severing V1 and the Migrator will greatly reduce the likelihood of such event, increasing the overall security of the protocol.

Risks

The main downside for this proposal is that a material amount of the supply is still yet un-migrated through the voluntary migration mechanism, even though this path has been open for over a year.

Analysis

We think that the security benefits out-weigh the risks at this point. Additionally, because ESS is an uncapped governance token, it is technologically possible to restart a migration path in a future proposal if there was enough support.

Note: we are not making any warranties on whether we’d approve or disapprove of such hypothetical proposal.

Implementation

We have created a preliminary implementation of this sunset action to verify that it is possible given the current state of the protocol. We intend to publish this code at time of proposal so that the code can be reviewed during the designated review period prior to the seven day voting period.

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The proposal is now live here.

The implementation can be view here.