About multisig groups such as FLOT, FSRT and RSOT

The Plaza
#1

The multisig groups we have formed so far, FSRT (First Strategic Reserve Team) and FLOT (First Liquidity Operations Team), were novel experiments that were not very successful. With efforts to create another multisig group underway in the form of RSOT (Reputed Signers Operation Team), it is important we analyze the previous failures and change what we are doing to create convincing reasons the next effort will be more successful.

FSRT tended to be very slow to respond, which created some anxiety about the safety of funds. Other than this significant problem, it did work. The main takeaway from that experience is that anonymous signers (different from psuedononymous signers) are poor choices, because they tend to be unmotivated and unaccountable.

In the case of FLOT, shareholders lost control of all created shareholder NSR and all BTC reserves used to support NuBits. The failure was quite severe, being the primary cause of a loss of nearly 3 million USD between NuShares, NuBits and BlockShares. Before we create another multisig group, we need reason to be confident this type of failure won’t happen again. It has been catastrophic, and is arguably the primary reason the NuShare price has dropped more than 85%. If the multisig funds had been used according to shareholder directives, the peg almost certainly would have been maintained with good liquidity at exactly $1.00 at all times. It is difficult to overstate the importance of this failure.

Similarly, if RSOT is not properly formed and is given all B&C Exchange funds, it could nearly destroy any chance of success the project has. We need to proceed very carefully and cautiously as a result. The situation with the handling of B&C Exchange funds is an important area that needs improvement, but we don’t need to proceed like it is a crisis. Developers are still getting paid, and funds are flowing just as they have been for the past year.

There appears to be two avenues that hold sufficient promise to be considered seriously. One to is pass a motion directing that B&C development funds be transferred to me. While I’m sure this is quite safe in terms of the funds staying under control of shareholders, I have to admit there are still loss scenarios that could occur, such as in the event of my death. Those scenarios are not particularly likely in the near term. Another option is to have a small multisig group consisting of myself, jooize and Sabreiib. I am hesitant to do so, due to concern that we still don’t understand how to make multisig groups perform reliably.

So, my question to the community is: how can we ensure these multisig groups perform reliably given our recent severe failures?

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[Passed] B&C Exchange should trade all US-NBT for NSR
#2

Ovation beyond comprehension

#3

The shareholders don’t know whether the developers are still paid. All the thing are in the blackbox. In fact I dislike holding those fund because it costs time to do such a work.

According to your opinion, the failure of FLOT is due to lack of quick response, betraying the Nu law. The RSOT doesn’t have to quickly move because they pay the fund to developers per week or per month.

It would be good to provide developing status (roadmap).

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#4

Another related issue that ought to be discussed is the optimal relationship between multisig groups manually transferring funds (such as the proposed RSOT) and the reputed signers determined by protocol. I think the two groups should be separated completely. In other words, campaigning to become reputed signer for B&C should not be understood to incur any obligation to participate in any manual transactions. This will make our reputed signers more reliable by removing room for discretion. They just run some software and back up wallets. Nothing more. RSOT and other multisig groups should be organized separately. They may use reputed signers, just as I have mentioned the possibility of forming a 2 of 3 group with jooize, Sabreiib and myself. Coincidentally, we are the top three reputed signers at the moment. There will be a lot overlap in the two groups, and that is fine. The attributes that make good reputed signers also make excellent manual multisig group signers.

1 Like
#5

FLOT was clearly a success. It operated swiftly and efficiently with keen consensus on matters that were well spelled out by motion beforehand. The only place the multisig group began to fail at wa’s attaining consensus outside the rules of motion, which is actually to be expected because this is an area where shareholders themselves have failed to attain consensus. I can list some of the actual flaws in the system that caused the peg break, though they are numerous. They start with a white paper that fails to mention supply reduction, followed by an ill-fated attempt to keep shareholder funds on exchange, then a rushed depletion of operation funds for no good reason, obstructionism against a motion that would have spelled out precisely what happens in the event of peg failure, and a personal attack against FLOT by a highly reputed member of the organization causing an incredibly hostile workplace. Every one of these listed causes was perpetrated by none other than the lead architect.

All in all FLOT was an outstanding success. No funds were ever stolen, signage was swift, txn proposal was mostly decentralized, and even strange and new situations were handled with grace. Multisig groups are clearly a prime candidate for making a board of directors in future DAOs. I’m sure members of this community will readily agree that a multisig board is an excellent way to proceed with the DAOs that are sure to spring up now that Nu and B&C have summarily failed.

6 Likes
Comparison of the performance of XSPEC and NBT
#6

From B&C shareholder’s point of view, B&C is definately in crisis:

  1. Architect Leader has disappeared.
    2)Dev fund in NBT with peg failure, and fund holder is either disappeared or behind the scenes(Angela)
  2. Disagreement between developers (Sigmike Eleven)
    4)Each Developer dosen’t know whether other developer is working. Shareholders don’t know how many developers are working.

Shareholders should prepare 2nd crowdfund otherwise B&C project will be dead.

In real world, when an engineering project is going on, weekly or monthly reports are required including

The work in past week/month, the progress rate. The explaination of why if targets not achieved.
the next week/month work plan.
the difficuties/issues and other related situations.

#7

Who are getting paid now? @sigmike? @Eleven? Or other developers? How do you know about it?

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Cryptog's BCExchange data feeds - BETA
#8

A few lessons learned were

  • FLOT works effectively given reaction time they promised (~1 week). The quickest signing cycle is ~6 hrs
  • Shareholders tend to be apathetic in getting involved and making decisions so the FLOT ends up acting with more discretion than the members had asked for.
  • Don’t trust a single lead with overwhelming power in a DAO.
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