1. Executive Summary
This proposal introduces Delegate Rewards V2, a redesigned incentive framework for Lazy Summer DAO’s recognized delegate program. Recognizing that the current framework (SIP5.6) has demonstrated a structural misalignment between treasury spend and governance workload, this proposal replaces it with a Dual-Pool system anchored to a fixed maximum quarterly budget of $4,200 USD ($1,400 USD monthly). To protect quorum stability and elevate contribution quality, the monthly budget features an 85% baseline allocation ($1,200) strictly rewarding delegates who maintain at least an 80% on-chain voting participation rate, alongside a 15% allocation ($200) reserved exclusively for the top 3 delegates driving high-value forum discussions as measured by the Peer Recognition Score (PRS). Finally, to align delegate incentives with the long-term economic health of the protocol, mitigate sell pressure, and reduce administrative strain, all funds will be managed by a dedicated Delegate Rewards Multisig and distributed as 30-day Superfluid streams following a monthly performance audit.
2. Motivation
The delegate compensation system formalized in SIP5.6 served Lazy Summer DAO well during its early governance phase. As the protocol’s complexity has grown—with DAO-managed vaults, expanded risk frameworks, and increasing governance throughput—the structural weaknesses of a static retainer model have become measurable and well-documented.
2.1 The Data Case for Reform
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Inverted Pay-to-Workload Ratio: In June 2025, the DAO processed 1 proposal and paid out approximately 152,000 SUMR—the second-highest monthly total of the year. In May 2025, the DAO processed 14 proposals and paid only ~126,500 SUMR. Treasury spend had a negative correlation with governance workload.
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Rising Fixed Cost Baseline: As the delegate set grew from 14 members (March) to 23 (December), the treasury baseline crept from ~118k to ~165k SUMR per month, driven by headcount rather than governance output.
2.2 Treasury Constraint
The design of this framework was ultimately dictated by our current financial constraints. As of March 5, 2026, the Lazy Summer treasury holds a total balance of ~$298k USD. However, it is heavily weighted in SUMR (93.4%), with light stablecoin (2.8%) and ETH (3.8%) balances.
While forum discussions initially suggested a $1,500/month payout for high-value contributors, the DAO agreed this must serve as a long-term “north star.” Implementing that model today would require ~$25,000/month, which creates an unsustainable sell-side pressure given our lean stablecoin runway. Consequently, all V2 framework decisions have been heavily optimized to fit within our current fiscal constraints.
3. Goals and Objectives
To directly address the issues outlined above, Delegate Rewards V2 was designed with three primary objectives:
| Goal | How this framework addresses it |
|---|---|
| Quorum Stability | Pool A heavily weighted to make voting participation financially attractive |
| Contribution Quality | Pool B rewards top PRS scorers; pre-vote forum engagement > post-vote |
| Treasury Sustainability | Fixed quarterly budget cap; streaming reduces sell cliffs; quarterly reporting |
4. Proposed Framework Specifications
To execute the goals outlined above, the V2 Delegate Reward Framework will operate under the following parameters:
4.1 The Quarterly Budget Cap All delegate rewards will be drawn from a fixed quarterly SUMR budget, denominated in USD to provide predictability and recalculated at the start of each month.
The budget for this framework is capped at $4,200 USD equivalent per quarter (distributed as $1,400 USD per month).
4.2 The Pricing Mechanism & Buffer
To protect both delegates and the treasury from SUMR price volatility, the SUMR payout amount is calculated at the start of each month using a 7-Day Time-Weighted Average Price (TWAP).
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The Conditional 10% Buffer: If the DAO opts to stream payouts continuously over 30 days (e.g., via Superfluid), delegates face exposure to mid-month price drops. To mitigate this, a 10% buffer is added to the calculated base amount. Importantly, this buffer falls outside the $1,400 reward budget and is funded from the multi-sig operations costs. If the token price holds steady, delegates receive a small bonus; if the token drops up to 10% mid-month, their baseline USD compensation remains perfectly protected. (Note: If the DAO ultimately chooses to execute payouts retroactively via standard Tally lump-sum transfers instead of streaming, this buffer becomes unnecessary and will be removed to save treasury funds).
- Example calculation (Streaming scenario): If the 7-day TWAP at the start of the month is $0.20, the base $1,400 USD budget equals 7,000 SUMR. Adding the 10% buffer (700 SUMR) brings the total streamed amount to 7,700 SUMR.
4.3 The Dual-Pool Split
The $1,400 monthly budget is divided into two distinct pools. This 85/15 split deliberately prioritizes quorum stability under a lean budget, while ensuring the contribution pool remains concentrated enough to be financially meaningful.
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Pool A — Voting Baseline (85% / ~$1,200/month): Rewards consistent onchain participation. Making this pool highly attractive ensures quorum remains stable even as the delegate set grows.
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Pool B — Contributions (15% / ~$200/month): Rewards high-value forum contributions that shape outcomes before the voting phase (forum analysis, proposal feedback, and thoughtful contributions) via the PRS leaderboard.
4.4 Baseline Eligibility (Pool A) To unlock Pool A rewards, a delegate must achieve a minimum 80% voting participation rate across all onchain proposals within the calendar month. This is a strict, binary outcome with no partial credit:
| Tier | Participation Rate | Outcome |
|---|---|---|
| Standard | 80–100% | Qualifies for the full Pool A reward. |
| Ineligible | < 80% | No reward. Half-effort does not qualify. |
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Rationale: The 80% floor secures quorum while providing a realistic buffer for missed proposals, balancing the protocol’s need for stability with the explicit part-time nature of the delegate role.
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Open Question for the DAO: Should a perfect 100% voting record unlock an additional bonus from Pool B?
Voting Power Threshold To ensure the program attracts high-value contributors rather than becoming a low-effort yield source, the minimum delegated voting power required to qualify as a recognized delegate is being raised.
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Proposed Minimum Threshold: Exploring an increase from the current 10,000 SUMR to 60k, 500k, or 1M SUMR.
- Rationale: The V2 framework increases the delegate reward value by approximately 6x, so the entry threshold must rise proportionally. Given our lean budget, the DIWG is seriously considering the higher 1M SUMR minimum to ensure absolute conviction.
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Supporting Small Delegates (Future Initiative): Raising the threshold creates a real risk of excluding highly active contributors who lack initial support from their delegators. To solve this, the DIWG might propose a separate DAO delegation program in the future. This program would identify top-performing delegates and formally grant them treasury voting power so they can qualify.
4.5 PRS Utilization (Pool B Payouts)
The $200 Contribution Pool is highly concentrated to incentivize deep protocol work (e.g., forum analysis, proposal feedbacks, thoughtful forum contributions). It will be split exclusively among the top 3 highest-scoring delegates on the monthly Peer Recognition Score (PRS) leaderboard. Capping payouts to the top 3 performers ensures the reward is financially impactful and creates healthy competition for high-value forum work.
The Peer Recognition Score (PRS)
Contribution quality will be measured through the Peer Recognition Score (PRS) which is an objective way to measure forum contribution using likes. To distinguish high-value insights from standard noise, the system weighs validation through likes based on reputation, meaning an endorsement from a delegate carries significantly more weight than a random like. For full details on PRS, please check this link: [Insert Link Here].
4.6 Technical Execution & Streaming Logic
The optimal technical execution for payouts is currently under review to ensure cost-efficiency. Delegate rewards will be disbursed either via continuous Superfluid streams managed through a dedicated Delegate Rewards Multisig, or via direct onchain execution through standard Tally proposals.
The payout process runs on a strict monthly rolling cycle:
- Monthly Qualification Audit: At the end of each month, eligibility is assessed. Jensei will track and confirm onchain voting participation rates (at no additional cost to the DAO, as this is supported by Labs), while Curia will finalize and report the offchain PRS leaderboard
4.7 Success Metrics & Reporting (KPIs)
Curia will publish a quarterly report
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Governance Stability: Quorum consistency, actual increase in active voting power, increase in voting power
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Forum contribution: Amount of comments, amount of proposals month by month
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Decentralization Growth: Increase in active delegates, Nakamoto coefficient
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Protocol Impact: TVL growth, New yield sources added.
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Monthly Top Contributors
5. Open Questions for Community Discussion
The following parameters remain unresolved and require broader delegate input before this proposal moves to a formal SIP:
| Open Question | Current Options / Notes |
|---|---|
| Voting power threshold | 60k SUMR (proportional increase) vs. 500k–1M SUMR (high-conviction threshold). |
| 100% voting bonus | Should delegates achieving perfect participation receive a bonus from Pool B? |
| Pool split | DIWG landed on 85/15. Is this the right balance? A 70/30 or 60/40 split would elevate contribution quality incentives but reduces quorum protection. |
| Core Team Eligibility | Should core Labs team members be eligible for Pool B contribution rewards, or strictly reserved for independent delegates to encourage decentralization? |
| Technical Execution & Buffer | Should we prioritize Superfluid streaming (which requires the 10% volatility buffer) or use standard Tally retroactive lump-sums (which saves the treasury the 10% premium but lacks continuous streaming)? |
6. Governance & Implementation Timeline
| Phase | Dates | Milestone / Action |
|---|---|---|
| Week 0 | Feb 5 | Forum thread discussions initiated; delegates provided data exposing current model flaws, which were explored further in community calls. |
| Week 1 | Feb 9–13 | Core Delegate Incentive Working Group (DIWG) formed; hosted Workshop Part 1 to explore tensions and options. |
| Week 2 | Feb 16–20 | Hosted Workshop Part 2; secured foundational consensus on the budget cap, baseline voting, and Dual-Pool structure. |
| Week 3 | Feb 23–27 | Published the Transparency Hub and updated the Miro board to track framework designs. |
| Week 4 | Mar 2–6 | Drafted the V1 SIP skeleton; currently undergoing DIWG review before posting to the forum as an open RFC. |
| Week 5 | Mar 9–13 | Gather and integrate delegate feedback from the RFC |
| Week 6 | Mar 16–20 | Buffer week for final adjustments before voting. |
| Week 7 | Mar 23–27 | Active voting week. |
| Launch | April 1 | Implementation for Q2 launch. |
7. Costs
7.1 Program Manager Compensation Curia will serve as the dedicated Program Manager for the V2 framework. Responsibilities include maintaining the PRS data pipeline, dashboard, and publishing the quarterly report. For managing this operational and technical overhead, Curia will receive a lean retainer of $420 USD per quarter (representing exactly 10% of the total quarterly delegate payout budget, ensuring administrative costs remain strictly capped).
7.2 Technical Execution & Distribution Costs
The operational budget for distributing rewards remains contingent on the DAO’s preferred technical route (Superfluid streams vs. Tally onchain execution). If the community selects the Multisig/Superfluid model, a lean budget for gas and signer stipends will be introduced prior to the formal Tally vote. If direct Tally execution is selected, these monthly distribution costs will effectively be zero.
7.3 Retroactive Working Group Compensation This current proposal solely covers the forward-looking budget for the V2 Delegate Rewards program. Should this resulting framework be successfully adopted by the DAO, a separate, subsequent proposal may be submitted to retroactively reward the core DI-WG (Delegate Incentive Working Group) contributors for their time, research, and strategic design work.
8. Call to Action
This is a Request for Comment. No parameters are final until the community has engaged. Delegates and community members are invited to:
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Comment below with feedback on any section of this proposal
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Share your view on the open questions in Section 6
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Attend the next community call to engage in live discussion
Tagging @Recognized_Delegates and @jensei