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👨🔬 Governance Lab #024
Lab Report #024 - Yearn V3, GSM Update, Prisma Whitelisting, Dulguun CTO, and more
gm frens welcome back to the Governance Lab, your weekly source for all things StableLab, DeFi, and you guessed it, Governance. Each week I like to write something catchy that summarizes the week here. Usually it’s my unfiltered perspective on the week. I hope you’re enjoying them as much as I am. At SL HQ we’ve been heads down working hard on a lot of updates that I can’t wait to share very soon. However, this week I CAN announce that we have hired a CTO. Read about this and all the crazy stuff happening in DeFi and governance below. enjoy frens 🧪
At a Glance 👀
Yearn DAO discusses V3 launch
👻 Aave Companies shares GSM update
🌈 Prisma requests whitelisting at Curve
👨💻 Dulguun joins as CTO
Let’s dive in 🏊
Do you ever Yearn?
Yearn DAO looks to launch V3
The V3 Protocol Team at Yearn Finance has submitted a proposal to formally launch V3 — the next evolution of “yield-generating vaults and strategies”.
With V3, the core goal is to establish a fully decentralized protocol that provides a secure and trustworthy infrastructure for on-chain capital allocation. To achieve this, V3 introduces significant improvements, including enhanced composability, increased decentralization, greater customization options, improved capital efficiency, and an innovative profit-locking mechanism. Moreover, the upgrade empowers individuals to develop, deploy, and manage their own vaults and strategies, tailored to their risk profiles.
The proposal details a phased rollout strategy for V3, aimed at rigorously battle testing and building TVL. The rollout will begin on Polygon, followed by Arbitrum, AVAX, Optimism, and finally Ethereum.
Aave Companies share GSM development updates
Aave is making strides towards launching the GHO Stability Module, a custom peg stability mechanism inspired by MakerDAO’s PSM. The mechanism allows for the seamless exchange of two tokens at a predetermined ratio.
Aave Companies recently shared an update on the progress of the GSM. Currently, the codebase is undergoing security audits from multiple teams, and the "Capital Allocator" component is being replaced with GSM4626. Additionally, they have implemented new “fee strategies” to enhance the system.
The post also seeks community feedback and discussion regarding the configuration of the initial parameters. An upcoming ARFC is anticipated for deploying the GSM.
Risk Service Provider Chaos Labs has offered their initial recommendations, proposing to launch the GSM with USDC and USDT, with an exposure cap of 5M each.
Prisma DAO requests whitelisting at Curve Finance
Prisma Finance, creators of mkUSD, a stablecoin collateralized by LSTs, have submitted a proposal to get whitelisted on Curve. The move aims to foster greater engagement in governance and solidify their position in the Curve ecosystem.
In their proposal, Prisma outlines their intentions to leverage their newly acquired CRV position (via an OTC deal with Mich) to vote for their PRISMA/WETH and mkUSD/FRAXBP pools. Furthermore, they pledge to offer incentives to veCRV voters on both Votium and Votemarket. veCRV tokenholders who vote to approve this proposal will be rewarded with a PRISMA airdrop.
Prisma claims the proposal will “bring new users, liquidity, fees, bribing and incentives to the Curve ecosystem from a DAO that will max-lock its CRV position.”
❲ Links ❳
🚀 Launches & Deployments
📑 Insights & Reports
It’s Time to Talk About DeFi’s Risk Management Problems
Web3 Work / DAO Contributor Research Report
Counterpoint: A Bear’s Note on LDO
🧗 Milestones & Updates
Introducing Aave GHO Risk Analytics
Deploy Synthetix V3 on Base
Neutron and Duality Protocol Merger Proposal
Introduction of the R Savings Module
JPEG’d DAO: Curve Hack Disbursement Plan
Arbitrum Incentives Working Group Program
📺 Podcasts & Listens
David Phelps: Why Crypto Governance Sucks on Lightspeed
❲ Proposal Tracker ❳
Compound - v2 Deprecation Strategy
Summary: Here, Gauntlet outlines a strategy to further deprecate the v2 market in favor of v3. The proposal recommends the following changes: lowering the v3 utilization kink to 90%, adjusting the high parameters of v3's annual interest rate slope, redirecting v2 rewards to v3 Ethereum USDC suppliers, and increasing the reserve factors of v2 stablecoins. These recommendations aim to ensure an adequate supply of USDC exists for borrowing on v3 and to minimize any potential negative user experiences on v2.
1inch - Deploy 1inch Network on Base
Summary: This proposal aims to deploy the full suite of 1inch Protocols - which include 1inch Aggregation, 1inch Limit Order, and 1inch Fusion - on Base Mainnet. With the recent launch of Base Mainnet, this fast-track proposal strives to provide cheaper transaction costs and better UX for 1inch users on a new ecosystem.
Summary: This proposal aims to renew the engagement between the Aave DAO and BGD Labs. In light of Aave's evolution, the development service provider seeks to update and align the engagement to reduce their role and promote decentralization. The proposal suggests reducing the scope's duration from 15 months to 6 months, streamlining the scope itself, and proportionally adjusting the total budget to $1.9M in stablecoins and 6K AAVE.
Yearn - YFI Wintermute Loan & CRV Plans
Summary: Here, Wintermute is requesting a loan of 350 YFI ($2.18M) from Yearn DAO for a duration of 12 months with an interest rate of 0.10%. In the proposal, Wintermute reveals plans to utilize their existing CRV holdings (3M) to acquire yCRV, deploy diverse assets into the yCRV-CRV Curve pool on Yearn, and potentially exchange lp-yCRV for vl-CRV to actively participate in the Curve Wars.
Aave - LUSD Collateral Activation
Summary: This AIP seeks to onboard the LUSD stablecoin as a collateral asset on the Aave V3 ETH pool. By doing so, the proposal intends to provide users with a wider range of strategies and potentially create synergistic benefits for the GHO stablecoin. Risk parameters for the deployment include an LTV of 77%, an LT of 80%, a Liquidation Penalty of 4.5%, and a Liquidation Protocol Fee of 10%.
Rocket Pool - RPL Staking Rework
Summary: This proposal aims to enhance the staking rewards for RPL, thereby providing stronger incentives for Node Operators to bolster the supply of rETH. The proposal suggests adjusting the rewards scale by promoting the creation of additional minipools and offering greater rewards to BEL8s compared to EB16s.
From the Lab
Welcome to the team Dulguun
Let's give a big warm welcome to Dulguun - our newest member at StableLab! 🎉 Dulguun joins us as CTO and our very first technical hire. With years of development and smart contract experience, he's been a rockstar at both Samsung and Stader Labs. We're beyond thrilled to have him on board. 😊
Now Delegate at Rari DAO
We are thrilled to announce that we have become a delegate at RARI DAO, the decentralized community dedicated to decentralizing the Rarible Protocol. Special thanks to the Rari Foundation for their contributions. We look forward to collaborating closely with the Foundation in fostering the growth of the decentralized NFT community. See our full delegate thread here.
Arbitrum DAO Grants Domain Allocator
On Wednesday, we nominated ourselves to become domain allocators for the newly introduced Arbitrum Grants Program. Our aim is to secure the domain of ‘New Protocol Ideas’, which focuses on funding diverse experiments and initiatives that foster protocol growth. We are already looking forward to the upcoming elections, which are scheduled to commence on August 23rd. ⚡
❲ Our Proposals ❳
🆕 New Proposals
Summary: This proposal seeks to further decentralize the Aave Grants DAO by implementing open community elections for its various roles. Additionally, it strives to foster transparency and fairness in the grant funding process by introducing a grant orchestration tool like Questbook. Through these measures, we aim to optimize operational efficiency and empower the community's engagement in the decision-making process.
Status: 💬 Forum Post → Gathering community feedback
🗳️ Active Proposals
Status: ⚡️ LIVE on Snapshot
Current Results: 65% ‘No’ Quorum: 12M / 10M
Voting Ends: August 19th
❲ Our Voting ❳
📆 August 11th → August 17th | 🗳️ Total Votes: 24
See our full vote history and rationale here.
I’d love to hear from you! Drop me a DM on Twitter with your thoughts, feedback, or any comments you may have about the newsletter. I write for you, the reader :)
That’s it for this week. As always thanks for reading and subscribing to the Governance Lab