Feedback on The Perpetual Endowment Network (PEN)

General
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Introduction

First of all, I’m opening this thread because I wasn’t entirely sure what the best channel is for sharing feedback on PEN (cc. @Loring-Brainbot), and it felt more valuable to make these reflections visible rather than keep them private. I’m approaching this as an open contribution rather than a definitive take, and I’d love for this to evolve into a shared discussion. Curious to hear how others are interpreting the model, where it resonates, and where it might still be incomplete.

I want to say that the PEN model is one of the clearest and most coherent designs I’ve seen recently around long-term capital coordination. It feels intentionally minimal, and that’s a strength.

Sharing this as a personal reflection in the spirit of “the discussion is open” commen, and in the context of Octant + Shutter Champions: Melee 1, where many of us are actively exploring how capital allocation and real execution connect in practice.

Recap: What PEN Unlocks

At its core, PEN introduces a few strong primitives:

  • Permanent capital (principal preserved, yield allocated) → enables infinite runway institutions

  • Non-speculative participation (soulbound seats) → aligns around conviction, not price

  • Periodic slate voting → reduces governance noise and forces holistic decisions

  • Anti-fragile membership dynamics → stabilizes participation over time

  • Operational minimalism → avoids entrenched structures and keeps the system lightweight

Taken together, this positions PEN as a very clean capital allocation layer for funding ecosystems over long time horizons.

The Open Question

While reading the model, one question kept coming up:

Is PEN intentionally designed to only be a capital allocation layer… or is it meant to also integrate value creation?

Right now, the model seems to assume that:

  • autonomous teams will emerge externally

  • slates will coordinate funding toward them

  • execution will “happen” around the system

Which is a valid design choice.

But it also means that:

The system defines how capital moves, but not how value is reliably created.

And that distinction feels important.

What Feels Implicit (and Possibly Missing)

In the current flow:

Yield Vault → Beneficiaries

“Beneficiaries” seem to carry two roles at once:

  • those who receive funding

  • those who execute and produce outcomes

In practice, those are not always the same.

And more importantly, the model does not explicitly address:

  • how contributors are selected

  • how execution quality is assessed

  • how the system learns from past allocations

This might be intentional.

But if so, it raises a useful framing:

Is PEN comfortable outsourcing value creation entirely… or does it eventually need to interface with it more explicitly?

A Minimal Lens: Introducing “Contributors” as a Distinct Layer

Without adding much complexity, one way to look at this is simply to make one role more explicit:

  • Members → allocate capital

  • Contributors → execute work

  • Beneficiaries → receive the outcomes

Which would shift the mental model from:

Yield → Beneficiaries

to:

Yield → Contributors → Beneficiaries

This is not necessarily a structural change, but a clarification:

  • separating execution from impact

  • making accountability more legible

Why This Matters for Governance Design

If contributors are made explicit, it opens a design space that avoids pushing operational decisions onto members.

Instead of:

  • members voting on operational details

  • or electing contributors through governance cycles

You can move toward:

1. Contextual authority for contributors Contributors operate within defined domains, with autonomy to execute. → faster, more adaptive decisions

2. Selection and filtering mechanisms (not elections) Contributors are selected based on:

  • track record

  • fit for the mandate

  • prior execution

-> reduces governance overhead for members

3. Members stay focused on allocation, not operations Members decide:

  • what gets funded

  • at what level

But not:

  • how execution happens day-to-day

-> preserves the simplicity and intent of PEN

Why Members ≠ Contributors

This distinction becomes clearer when looking at incentives:

Members (capital / philanthropic layer)

  • optimize for long-term allocation quality

  • are not dependent on the system for income

  • operate at a strategic level

Contributors (workers / builders)

  • optimize for execution and delivery

  • depend on the system for economic sustenance

  • operate at an operational level

These are different roles, with different time horizons and pressures.

Keeping them distinct allows each to do its job well, without overloading governance.

What This Potentially Unlocks

Making this layer explicit (even just conceptually) could:

  • improve the quality of funding decisions (more grounded in execution reality)

  • reduce governance burden on members (no need for operational votes or elections)

  • enable faster and more strategic execution (through contextual authority)

  • create space for reputation and learning loops around contributors

All without significantly increasing complexity in the core model.

Closing Thought

PEN already makes a strong bet:

that capital can be coordinated cleanly, without speculation or depletion.

The open question is whether it also wants to make a second bet:

that value creation can remain external and loosely coupled… or whether it benefits from being lightly integrated into the system’s logic.

Curious how others see this. Is this separation a feature, or a gap worth addressing over time?

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Great thoughts! Posting a link to the PEN blog post in case others would to look back at it.

Introducing the Perpetual Endowment Network (PEN)

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This is a really interesting model.

Having participated in Moloch DAOs, I find the core idea compelling because it tries to solve for one of the biggest structural weaknesses in a lot of DAO models: finite runway and treasury depletion over time. Preserving principal and only governing yield feels like a strong direction for ecosystems that care about long-term stewardship.

I also like the effort to reduce governance churn. One slate vote per quarter is a meaningful contrast to the constant proposal flow that often creates fatigue in other DAOs.

A few things I would be curious to see pressure-tested further are the seat design, how inactive seat reclamation would work in practice, and whether slate voting compresses too many tradeoffs into a single decision. I also think a lot will depend on the durability and risk profile of the yield strategy underneath the model.

Overall, I think this kind of governance experimentation is worth exploring. That said, if parts of the model do not work in practice, the system should be flexible enough to respond quickly and adapt.

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Hi there - thanks for setting this thread up, it’s refreshing to see something new on the table!

Some early thoughts on the PEN: the design choices very well reflect the objective which is optimizing for permanence. In that sense, each of the constrains aim to tackle the causes any given protocol can face when thinking of it’s long-term horizon.

  • Draining treasury → Immutable Principal Vault
  • Voter fatigue → Quarterly voting
  • Speculative participation → Soulbound tokens

On treasury

Despite yield being the only source of funds allocation, some sort of governance rail should probably set towards the Principal Vault. Although this might effectively change the nature of PEN, operating upon the yield-generating strategies or performing emergency actions is something that needs to be managed within the Principal Vault and inherently affects the Yield Vault and therefore the PEN.

Again, this can be thought of as exceptional situations that shouldn’t require as much dedication as the quarterly votings but that definitely come into play when thinking of ownership and governance surface areas.

This of course requires rethinking some of the mechanisms that currently exist and have allowed some of the situations that the PEN tries to avoid such as forks, rage-quits or centralized vetos, but that at some point made engaging with the protocol appealing in the first place.

On participation

I think the caveat here is thinking of participation solely as quarterly votings, which is the least burdensome part of the process although the cadence is indeed reasonable. As it was mentioned, the overhead of running the program while also having to make an informed choice is what ends up eroding participation and at some point they become two separate roles. Perhaps incorporating some Deep Funding mechanisms could be insightful as an experimental approach.

The other question naturally comes on whether reputation itself is enough incentive for active and meaningful participation. Reputation itself is still one of governance’s outstanding debts and any step is more than welcomed, with TheDAO badgeholders being a recent example that can be leveraged as well as many others.

Nonetheless, and as already stated, it is up to the PEN to determine how/if those contributions are rewarded.

On seats

Echoing @Rika_AxiaNetwork, the seat design is what will ultimately put the PEN into play. We could set up a PEN simulator to tinker around with the Health Indicators if thats useful!

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Thanks for your feedback and comments, @alexsotodigital !

A few thoughts:

  • PENs are designed for capital formation and allocation - not for implementation.

  • Different PENs will opt for different approaches on what to fund, how to measure impact, and if/how to create flywheels.

  • It looks like we are using the term “beneficiaries” differently. (I use it to mean “the persons / orgs receiving funds”. You use it to mean “the people who ultimately benefit from the impact”.) But I agree that (in most cases) the persons / orgs receiving funds are different from the people who ultimately benefit from the impact.

  • I am a bit confused by your vision for “contributors”. The PEN model intentionally seeks to minimize permanent organizational structures, entrenched managers and rent-seeking actors. Rather, it envisions that operational work (such as maintaining interfaces, coordinating rounds, or facilitating governance) can be performed permissionlessly by anyone and funded retroactively through funding slates. No one should “depend on the system for economic sustenance”.

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Thanks for your feedback and comments, @Rika_AxiaNetwork !

A few thoughts:

  • Seat Design

PENs will have the ability to call a smart contract which will check each seat’s onchain last activity and reclaim all inactive seats. I expect that this call will occur every quarter, bundled with the onchain transaction(s) to distribute funds.

  • Slate Voting

Could you please explain more - or give an example?

  • Yield Strategy

100% agree. PEN seat holders will be able to vote on deploying / funding / withdrawing from yield strategies via onchain governance. Hopefully, these decisions will not be needed very often. But flexibility is required here.

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Thanks for your feedback and comments, @SEEDGov !

A few thoughts:

  • On Treasury

Several other people (inc @vpabundance and @Rika_AxiaNetwork ) have voiced similar concerns. And perhaps this is an area where the PEN models needs work.

In our open source blueprint (to be published soon), the PEN seat holders have direct control over all onchain actions, including deploying / funding / withdrawing from yield strategies. The blueprint uses the example parameters:

  • 100 seat quorum (recommended increasing the quorum as the PEN grows)
  • 70% + 1 votes needed to pass a proposal

These parameters ensure onchain actions can only be taken with a supermajority of support.

@zeugh and @alextnetto.eth at Anticapture may have ideas on how to allow for flexible decision making yet reduce attack surfaces.

  • Health Indicators

I would be very interested to see a dashboard or other UI for Health Indicators for one or more live PENs.

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Sure! I meant that slate voting trades off efficiency for granularity.

Slate voting is efficient because it is simpler, faster, and can reduce fragmented outcomes. However, it can hide disagreement about individual members, compensation, mandate, risk tolerance, or priorities.

Slate voting tends to bundle multiple options, so voters lose the ability to express more nuanced preferences.

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Agree with this, and I think it gets at one of the more important incentive questions here.

The PEN blog post says:

PENs reshape incentives around governance participation — attracting people and organizations motivated by values and the desire to accrue social capital, not financial gain.

I broadly agree with the direction, but I’d flag that social capital and financial gain do not need to be mutually exclusive. In a healthy governance system, especially one operating in a capitalist environment, both are usually part of the incentive stack. Reputation matters. Values matter. But durable participation also usually requires some pathway for contributors to justify the time, attention, and opportunity cost involved.

To me, the more important nuance is not whether governance participants should be rewarded, but what kind of work is being rewarded.

Across the governance space, we are slowly moving away from rewarding participation for its own sake and toward rewarding measurable outcomes. That shift feels especially important in a PEN model, where the goal is to minimize governance overhead. If governance is meant to be thinner, more targeted, and less performative, then the remaining governance work should probably be held to an even higher standard of impact.

One potential gap I see in the current PEN framing is that it seems to account for health indicators of the PEN system itself, almost as if the PEN system is the end goal. But I would view PEN more as an operating mechanism that should ultimately drive ROI toward Shutter’s broader ecosystem goals.

So in addition to tracking whether the PEN is healthy internally, I’d want to see mechanisms that track whether it is actually moving the needle externally. Is it improving execution? Is it helping allocate resources better? Is it growing the ecosystem? Is it producing outcomes that would not have happened otherwise?

And if the answer is yes, then governance participants should be rewarded for helping create those outcomes, not just for showing up, building reputation, or participating in process.

Curious how others think about that distinction: should PEN rewards be primarily tied to the health and legitimacy of the governance system itself, or should they be more explicitly tied to ecosystem-level outcomes?

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