PIP-2: Governance Framework for Removing Incentive Gauges
Summary
The PIP-2 proposal introduces a governance framework upgrade that aids in the assessment and removal of underperforming or obsolete incentive gauges. The success of the upgrade will ensure emissions remain aligned with protocol goals, supporting only value-accretive integrations and minimizing wasteful allocation. In cases where a gauge poses a significant risk to voters (e.g., malicious behavior or is defunct), the Puffer team reserves the right to immediately remove it in the interest of protocol security and stability.
Key Points:
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Community-led process for proposing and voting on gauge removals.
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Formal evaluation stages with clear timelines for discussion, review, and voting.
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Emergency authority for the Puffer team to act unilaterally when necessary.
Background
The Puffer DAO Gauge voting system was introduced in Season 2 and enables vePUFFER holders to direct protocol emissions toward integrations they believe most benefit the Puffer ecosystem. Unfortunately, not all approved gauges will remain effective, with integrations becoming inactive, failing to deliver expected TVL or user growth, or potentially posing security or reputational risks.
To ensure emissions are used responsibly, it is essential that the DAO introduces a methodical, transparent process to propose and execute gauge removals. This also discourages strategic stagnation and promotes more efficient capital deployment across the Puffer ecosystem.
Proposal Details
1. Community-Initiated Gauge Removal
Requirement: Any vePUFFER holder or community member may propose the removal of an existing gauge through a formal proposal.
Proposal Process:
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Submission: Post a proposal to the Governance Forum using the [Puffer Gauge Removal Proposal] format.
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Contents of Proposal:
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Name of the gauge to be removed.
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Summary of the integration (protocol name, asset, chain).
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Justification for removal:
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Underperformance (e.g., low TVL, volume, or reward efficiency).
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Inactivity or lack of user adoption.
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Security concerns or governance abandonment.
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Data or metrics supporting the claim.
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Proposed removal timeline.
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Timeline:
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Discussion Phase: 5 calendar days for community feedback.
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Governance Committee Review: 2 calendar days for formal evaluation.
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Voting Phase: Aligned with the next DAO voting epoch.
Outcome: If passed by a majority vote, the gauge will be removed by the core team within one week of the vote’s conclusion.
2. Team-Initiated Immediate Removals
Condition: If the Puffer team identifies a gauge that is either:
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Functionally defunct (e.g., broken contracts, unresponsive teams), or
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Actively dangerous (e.g., posing technical or financial risk to users or the protocol),
Then the team may immediately remove the gauge without DAO approval.
Process:
The team will publish a short post-mortem on the forum explaining the rationale for immediate removal. The community will be able to provide feedback or request reconsideration, but the removal is binding unless reversed by DAO vote.
Rationale: Ensures known threats can and will be mitigated quickly, whilst still maintaining community transparency and accountability.
Implementation Plan
The governance framework update would come into immediate effect following the DAO’s approval. The monitoring of gauge performance will be a dual-pronged approach, with both the community and the Puffer team supporting this effort.
A dedicated forum tag will be created for gauge removal proposals.
Benefits
With this update, the DAO can improve incentives efficiency, redirecting emissions away from ineffective integrations to gauges with greater impact. This strengthens security, enabling swift disassociation from high-risk and/or abandoned protocols/ecosystems.
By reinforcing the vePUFFER holder’s roles in allocating incentives, the proposal should improve community alignment and engagement, which was the main purpose of introducing community-led incentives in Season 2.
Finally, additional transparency and a formalized removal process help replace arbitrary decision-making with data-driven governance.
Risks
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Short-Term Volatility, where Gauge removals disrupt TVL or user activity.
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Political Friction with some protocol integrations potentially contesting their Gauge’s removal.
Alternative Considerations
There is potential for a threshold-based auto-review mechanism, which would automatically trigger the review of proposals for gauges that fall below a defined TVL or usage threshold for two or more consecutive epochs. Either of the following conditions could prompt this review:
(1) Emergency or Potential Attack Risk – Indicators of abnormal activity or vulnerabilities that may threaten protocol safety.
(2) Declining Performance Over Two Epochs – Sustained underperformance in terms of TVL or usage metrics.
In addition, the DAO could implement a sunset notice policy, granting affected protocols a fixed grace period to improve their metrics. If performance does not recover within this period, a formal removal vote may then proceed.
Conclusion
Introducing a structured gauge removal process improves Puffer DAO’s emissions efficiency, safeguards against any exposure to defunct gauges, and enforces the DAO to maintain high standards for future protocol integrations. The community will drive the majority of removals, with the Puffer team retaining discretion for emergency actions to safeguard the protocol and its users.
Voting Options
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For: Approve the establishment of the gauge removal governance framework as outlined above.
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Against: Reject the proposal and retain the status quo, with no formal gauge removal process.
Please cast your vote during the upcoming governance voting epoch.
[Snapshot link: https://vote.puffer.fi/community/0xd5f33bc8e6f31b29e5305064a79756a3ced117df54e47626fe4c63c38bf90475]