👨🔬 Governance Lab #017
Lab Report #017- Lido DAO, Maker Smart Burn Engine, SafeDAO Council Elections, and more
gm, welcome back to the Governance Lab, your source for all things StableLab, DeFi, and the wonderful world of governance. We’re closing the quarter with a bang. Governance is spinning with elections and funding requests. Lido DAO has a purpose, Maker votes for a new burn engine, TUSD depegs, Uniswap DAO proposes a new working group, and lots more. Let’s go!
P.S. Happy 4th to those stateside, ill be up in the PNW popping fireworks 🎆
At a Glance 👀
💫 Lido DAO aligns on a common purpose
🚂 MakerDAO votes to implement a new Burn Engine
🙋♂️ SafeDAO kicks off Council Elections
🤔 Delegate Musings at Starknet, Lido, Safe, & Element
Let’s dive in 🏊
❲ The Rundown ❳
Vibes Only
Lido DAO votes to align on a common purpose
After months of deliberation, Lido DAO has voted to formally introduce a Purpose, Mission, & Vision to help guide the staking community.
Motivations for the vote include developing a constitution-like document before designing governance frameworks and establishing a strong brand and product around a unified vision.
The following messaging was agreed upon by the community:
Purpose: “Keep Ethereum decentralized, accessible to all, and resistant to censorship.”
Vision: “A world in which Ethereum is the coordination and value layer of the internet.”
Mission: “Make staking simple, secure, and decentralized.”
Check the Engine
MakerDAO votes to implement a new Smart Burn Engine design
MakerDAO is currently voting to introduce a new smart contract system known as the ‘Smart Burn Engine’, a mechanism to allocate excess DAI from the Surplus buffer as reserves in case of protocol bad debt.
The proposed Engine improves the previous burn design at Maker by introducing the accumulation of MKR in the form of Univ2 LP tokens. Additionally, a custom contract called ‘Dss Flappers’ is introduced as the surplus auction mechanism.
The proposal specifies the following initial parameters:
Surplus Buffer Upper Limit: 50M DAI
Annual Rate of MKR Accumulation: 100M DAI per annum (Effective Rate: 200M DAI per annum)
Election Season
SafeDAO nears launch of its Grants Program with Council Elections
SafeDAO is in the midst of elections to formalize its grants council, a 5-person committee tasked with reviewing and approving grants
A total of 22 community members have self-nominated and are now vying for the 3 (of 5) available reviewer positions.
Seats up for grabs include a Wilcard, Product/Business, and Technical
Voting ends July 5th
❲ Links ❳
🚀 Launches & Deployments
Oasis App Rebrands to Summer.fi
Announcing Superstate: Compliant Blockchain-based Financial Products
Introducing the ZK Stack & Hyperchains
Launching Risk Assessment on Safe, DeFireWall for Transactions
Introducing Haptic Finance a Permissionless Options Protocol
Introducing StarkExpress
Gauntlet Announces Risk Services Offerings on Base
Wallfacer Labs Launches daodeals, Tool for Tracking Token Sales and Loans Made by DAOs
Introducing Maple Direct: Overcollateralized Loans for web3
📑 Insights & Reports
LidoDAO Votes to Align on it’s Purpose, Mission, Values
The Importance of Prioritization Frameworks in DAOs
Aave May 2023 Financial Report by Llama
A New Hope for DEX Design: Uniswap V4 and Ambient Finance
How ParaSwap Becomes the Decentralized Payment Pipeline
The L2 Wars, a Thread
Everything You Need to Know about Dinero
Analyzing Layer 2 Usage
Deep Dive into dYdX V4 Governance
🧗 Milestones & Updates
DAI reliance on USDC drops below 10%
Raft Protocol Integrates rETH
Optimism Cycle #13 Proposal Voting Roundup
💸 Raises
Hook Protocol Raises $3M
🗞️ Miscellaneous
Maverick Ecosystem Incentive Program
Leveraging Camelot Protocol to Grow the Arbitrum Ecosystem
Alchemix <> Balancer Migration Tool
DeFi Protocols are Converging to Liquidity as a Service
Aave V3 Deployment on Linea Testnet
Overview of Curve’s Algorithm LLAMMA & crvUSD Stablecoin
📺 Podcasts & Listens
Dan Robinson: A Deep Dive into Uniswap V4 on DeFi Research Hour
Kain Warwick: Fixing Ethereum’s Biggest Misstep on Flywheel DeFi Podcast
Kain Warwick: Surviving a Bear Market on On the Other Side Podcast
Doug Colkitt: Building the On-chain Venue for Price Discovery (Ambient Finance) on 0xResearch Podcast
❲ Proposal Watchlist ❳
Aave - [ARFC] Freeze TUSD on V2
Summary: Here, Marc Zeller proposes freezing TUSD on Aave V2 Ethereum “out of an abundance of caution.” Gauntlet also previously recommended the asset freeze due to TUSD momentarily depegging following speculation the stablecoin had exposure to Prime Trust, a crypto custodian who was unable to fulfill withdrawals.
Nouns DAO - Treasury Diversification: Swap 500 wstETH → rETH
Summary: This proposal seeks to diversify the NounsDAO treasury by swapping $1M in wstETH for rETH using a custom tool known as TWAMM by Cron Protocol. The tool is built on Balancer V2 and works by splitting large swaps across multiple blocks to ensure minimal slippage and MEV resistance. This is considered a “trial trade” with a planned follow-up proposal to swap $14M.
Compound - Migration Proposal Phase 4
Summary: This onchain proposal seeks ratification to complete Phase 4 of the Compound v2 → v3 migration plan by Gauntlet. Should the proposal pass, it would decrease the existing USDC & DAI COMP rewards on v2 and increase v2 USDC Reserve Factor.
Yearn - Activate veYFI with oYFI Gauges
Summary: This proposal looks to introduce oYFI tokens as a reward when using veYFI gauges. According to the proposal, with the recent passing of YIP65 to introduce veYFI, oYFI would be used as token rewards for those staking their tokens. oYFI allows holders to buy back YFI at a discount rate. Gauge votes set the amount of oYFI distributed in each epoch.
Redacted Cartel - Use of Treasury and Pulse Emissions to Support Growth of pxETH
Summary: This proposal seeks community approval to direct use of DAO treasury assets and 5% of BTRFLY supply from pulse emissions to launch and grow pxETH, Redacted’s liquid staking token. A Strategic Asset Committee will manage and utilize these assets to grow Dinero adoption, increase TVL, and produce long-term fee generation.
1inch - ARB Market-Making Proposal
Summary: Here, DAOplomats suggest deploying 500k ARB on Arrakis PALM, an automated LP strategy, to conduct market-making for the ARB token in Uni V3 which would generate yield for the 1inch DAO.
❲ From the Lab ❳
Growth AVC Share End of Quarter Reports
With the quarter coming to a close, AVCs at MakerDAO have begun publishing their end-of-quarter status reports to reflect and improve existing processes. On Tuesday, Doo, alongside Raphael from Flipside, published two key documents: Advisory Council Selection Process and Criteria and Growth AVC Strategy for MakerDAO.
Additionally, Doo has formally announced his departure from the Growth AVC at end of quarter to work on Asia Growth as part of Endgame and SubDAOs. More info on that soon.
Gustav on DAO Talk
A few weeks back, our frens at Tally graciously invited us on their podcast DAO Talk. You can now listen back to the episode recording with our co-founder Gustav as he chats about a range of topics including professional delegation, incentives, and scuba diving!
Watch it on YouTube here :)
Bonjour ETH CC
We’re gearing up for another edition of ETH CC. Doo and Gustav have been announced as speakers. See the info below. We have more announcements on the way ;)
If you’re planning to be in Paris for ETH CC, DM us to meet up!
UNI-ARB Working Group
On Wednesday, a Uniswap proposal was introduced to establish a new community working group. In the proposal, 2.2M ARB would be distributed to form a UNI-ARB working group aimed at enhancing and strengthening the relationship between Uniswap and Arbitrum. Within an 8-week sprint, this working group would be responsible for the formation of two sub-groups: Protocol Delegates & Ecosystem Fund. The protocol delegate group is a 5-person committee that would serve as representatives of Uniswap within Arbitrum governance. The Ecosystem Fund would look to fund initiatives that strengthen ecosystem partnerships, seek investment opportunities, and assist funded projects with various processes.
Our COO Doo is one of the four members of the working group tasked with establishing its formation and development. Next, the proposal looks to be discussed and approved by Uniswap governance.
❲ This Week’s Proposals ❳
🆕 New Proposals
🐇 [RFC] Reducing Recognized Delegate Voting Weight Requirement
Protocol: Hop Protocol
Summary: This proposal aims to reduce the HOP voting weight requirement for delegate compensation eligibility at Hop DAO. Currently, delegates who meet or exceed the 90K HOP requirement are compensated for their governance contributions. The proposal includes a forum poll to reach a consensus on a new requirement - 30K, 40K, or 50k.
Author: Kene
Status: 💬 Forum Post → Gathering community feedback
❲ This Week’s Voting ❳
📆 June 23 → June 29 | 🗳️ Total Votes: 28
See our full vote history and rationale here.
Lab Reports 📓
In our latest, Nneoma shares her experiences as a delegate in multiple DAO communities. She explores the significant tradeoffs that DAOs commonly encounter while striving to establish fully decentralized systems. These tradeoffs encompass decentralization versus operational efficiency, short-term versus long-term growth, and upgradeability versus immutability.
READ our full report
❲ Meme ❳
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