👨‍🔬 Governance Lab #003

Report #003 - Starknet Delegation, Hop Governance Documentation, Helping Senate, Euler Exploit, and more

Mar 16

gm 🫡

Welcome to another edition of the Governance Lab, your source for all things StableLab and Governance. What a week. Are we back? 🎢

This week, the SL team:
→ Receieves Starknet delegation
→ Publishes Hop DAO Governance Flow
→ Builds with Senate
→ Votes on 49 Proposals
→ & much more

Let’s go 🧪

Lab Activity 🔬

✨🐺 Starknet Foundation Distributes Voting Power

Ahead of the first governance proposal on Starknet, the Starknet Foundation announced that it had delegated 33% of its voting power, divided between the Builders Council and over 100 community members. We were fortunate to receive 7M in vote power, the maximum amount, thanks to our “very-high involvement” and “proven track-record”. We’re excited to see Starknet governance grow and can’t wait to get involved.

First official vote occurs next week!

🧹 Hop DAO Gets Organized

As part of our delegate efforts at Hop DAO, Kene and Bobby published a comprehensive governance document that outlines the current governance roles, rules and values, governance processes, working groups, funding, and more. It is crucial for protocols to consistently create and update governance documentation like this to ensure transparency and efficiency as they evolve. In the past, we have published similar documentation for Aave and Paladin.

🏗️ Building with Senate

This week, Bobby lent a hand to our friends over at Senate, the DAO governance tooling platform. We’ve added the Snapshot spaces for Starknet and Lido DAO. In addition, we helped clean up their documentation to make it easier for anyone to add new DAOs to the platform. We proudly work closely with tooling projects to improve the experience for ourselves and the broader ecosystem.

❲ This Week’s Proposals ❳

🆕 New Proposals

👻 ARC: Aave Governance Process Improvements
- Protocol: Aave
- Summary: This proposal aims to improve the current Aave governance process by renaming Aave Request for Comments (ARCs) to TEMP CHECKS. The motivation for this proposal stems from the massive increase in governance activity at Aave and the need to clarify governance guidelines. Mature proposals such as those from Risk Service Providers will have their lifecycles shortened to help streamline operations.
- Author: Kene & Marc Zeller
- Status: 💬 Forum Post → Gathering community feedback

🗳️ Live Proposals

🎠 1IP-20 1INCH Fast Track Proposal
- Protocol: 1inch
- Summary: Here, we introduce a Fast-Track Proposal Process at 1inch DAO to provide a flexible governance mechanism capable of handling time-sensitive emergencies. Our proposal outlines the domains or situations in which this proposal style is to be introduced. In practice, a governance thread would last 24hrs, followed by a Snapshot vote for 48hrs, thereafter the proposed changes are ratified.
- Author: Bobby & Kene
- Status: ⚡ Live → Snapshot Voting Underway
🏦 MIP92c5-SP1 Vault Setting Amendment Subproposal
- Protocol: MakerDAO
- Summary: Following the successful vote to onboard PSM USDC into
  Yearn last month to generate additional yield for Maker, we proposed three investment strategies and an initial allocation amount.
  -Strategy A: Supply $1M USDC to Aave
  -Strategy B: Supply $1M USDC into an Arrakis Vault
  -Strategy C: Supply & Borrow $1M USDC on Compound
- Author: Doo
- Status: ⛓ Live → Poll Voting Underway

❲ This Week’s Voting ❳

📆 Mar 10 → Mar 16 | 🗳️ 49 Total Votes 🔥🔥

External Files 🗂️

❲ News ❳

Euler Protocol Exploited for $197M

Early Monday morning, Euler Finance fell victim to an exploit resulting in a loss of ~$200M in ETH, WBTC, USDC, and DAI. The attack vector was later identified as an overlooked smart contract function added to the protocol more than a year ago. Following the incident, Euler’s TVL plummeted by 96%. A post-mortem analysis was published by one of the six auditing firms Euler has previously engaged to ensure the protocol’s security. The Euler Foundation is now offering a $1M reward for information leading to the arrest of the attacker.

As active delegates, community members, and, more recently the Governance Facilitator at Euler DAO, we are shocked and saddened by these events. We stand in solidarity with the team and remain optimistic that better days lie ahead for everyone involved. 🙏

MakerDAO Reduces USDC Exposure

Over the weekend, as we watched USDC break its peg due to a number of bank failures, MakerDAO mobilized to ensure the protocol limited its exposure to the stablecoin. With USDC making up 40% of DAI collateral, Maker's Risk Core Unit member MonetSupply submitted two emergency proposals to mitigate potential risks. Using the emergency response proposal process, Maker successfully ratified both of these proposals. Included in the proposals were changes to the current global debt ceiling of various collateral types and the addition of a “Debt Ceiling Breaker” which provides MKR tokenholders the ability to set the Debt Ceiling parameter to 0.

Arbitrum Announces Token Airdrop and DAO

Layer 2 project Arbitrum has announced its highly anticipated token airdrop, marking the beginning of its decentralization efforts through a DAO. Starting next week, ARB tokenholders along with a “Security Council” will comprise the initial makeup of the DAO. Tokenholders will be able to propose and ratify upgrades to the Arbitrum protocol, while the Security Council, a 9 of 12 multisig consisting of trusted community members, will function as a safety net, with the authority to make upgrades in case of emergencies. In the forums, AIP-1 has been shared, which details the initial operational structure of the Arbitrum DAO along with a forum post requesting delegate applications.