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👨‍🔬 Governance Lab #026

Lab Report #026 - GHO Freeze, Aave Treasury, Liquidity Observation Lab, Redacted x Mantle Partnership, and more

Aug 31, 2023

gm frens welcome back to the Governance Lab, your weekly source for all things StableLab, DeFi, and governance. RWAs are seeping into DeFi, it almost seems inevitable at this point. People are debating service provider agreements, peak Bear Market things. Strategic partnerships continue on pace as protocols abandon and form new alliances in order to bootstrap liquidity and adoption, and a pretty interesting liquidity incentive program is set to begin soon at Uniswap.
All this and more below, enjoy. 🤖

At a Glance 👀
🥶 Aave freezes GHO while debating treasury moves
💧 Steakhouse proposes the Liquidity Observation Lab at Lido
♻️ Gauntlet seeks renewal at Compound
🦋 Redacted poses partnerships with L2 Mantle

Let’s dive in 🏊

Let it GHO

GHO minting gets frozen while Aave DAO debates treasury changes

On August 24th, Aave Companies announced a temporary pause on GHO minting due to an integration issue. Shortly after, an AIP was posted by BGD Labs to unpause and freeze borrowings for the stablecoin as they work on a proper fix. On Wednesday, a new proposal to address the underlying technical issue and reduce the borrowing limit of GHO to 35M passed a vote. Separately, there is an ongoing proposal on Snapshot to increase the GHO borrow rate. See details below.
Aave DAO is keeping itself busy as it works through a handful of treasury management proposals to strengthen the platform. Below is a quick outline:
- Acquire 443K AURA from OlympusDAO to leverage vlAURA allowing further support of GHO pools
- Swap B-80BAL-20wETH into 475K USDC to replenish stablecoin holdings
- Onboard Centrifuge Prime to invest in RWA allocation
- Redeem and deposit funds on Avalance v2 to v3

Views from the Observation Lab

Steakhouse proposes reWARDS Committee revamp at Lido

Steakhouse has presented a proposal to replace and streamline the existing reWARDS Committee at Lido DAO, aiming to better support the development and longevity of stETH applications.
According to the proposal, the Liquidity Observation Lab (LOL) would replace the old committee and focus on three things: 1) boost liquidity in stETH applications, 2) help applications that can enrich the stETH ecosystem, and 3) promote liquidity measures across different applications.
The proposal looks to improve on the current committee’s mandate of tracking and deploying incentives for Lido assets by increasing focus on analytics and impact analysis, driving more incentives to fewer higher impact projects, better tracking of incentive activities for accountability, and the removal of LDO as token incentives.

Gauntlet’s Plan

Gauntlet submits renewal proposal at Compound

Gauntlet has submitted a proposal to renew their existing risk service provider engagement at Compound for an additional 12 months. The risk service manager has contributed to Compound since 2021 helping the protocol maximize its capital efficiency while mitigating risk.
Gauntlet's proposal seeks to expand their engagement by extending their existing coverage to include not only current and upcoming markets in Compound III and Compound II, but also Arbitrum, Polygon, and Base.
The proposal outlines the outcomes and expectations of the engagement, including improving value at risk, liquidations at risk, and borrowing power, and providing risk parameter change steps, dynamic risk dashboard, and market downturn risk reviews.
The proposed service fee for this new engagement is $2M ($1.8M last year) to be paid entirely in COMP.

Stake With Me

Redacted seeks partnership with Mantle

Redacted Cartel, the DAO building the Redacted ecosystem, has submitted a proposal to form a strategic partnership with the Mantle Network.
To foster the expansion of their new LST pxETH, as well as their upcoming DINERO stablecoin protocol, Redacted’s proposal entails staking 50K ETH into pxETH (Pirex's LST), establishing pxETH pairings with Mantle's LST, and choosing to send batch transactions through Redacted's private mempool.
The proposal claims to optimize utility for Mantle blockspace, address the lack of liquidity and flexibility in staking Ether, and offer unprecedented utility for staked Ethereum.

❲ Links ❳

🚀 Launches & Deployments

1inch live on Base
Introducing Hats: The Onchain Roles Protocol
SuperRare’s NFT Curation Staking Protocol Goes Live

📑 Insights & Reports

Radiant Capital Deep Dive
RWA Report: The Deep Dive into 2023 Market

🧗 Milestones & Updates

MakerDAO Governance Changes
Proposed Spark Pre-farming Airdrop Formula
Welcoming Base to Optimism Governance
Balancer DAO H1 2023 Treasury Review
Index Coop Q2 2023 Update
PoolTogether Upgrades to Governor Bravo

❲ Proposal Tracker ❳

Notable Developments

🟩 PASSED | [TEMP CHECK] Deploy Uniswap V2 on all chains with V3
- 98.36% ‘Yes Deploy V2’
🟩 PASSED | YIP-75: Launch V3
- 83%' ‘For’
🗳️ LIVE | V4 Adoption & DYDX Token Migration to dYdX Chain
- 100% ‘Yes’ Voting Ends on Sep 1st at 23:47 UTC
🗳️ LIVE | [ARFC] Increase GHO Borrow Rate
- 100% ‘YAE’ Voting Ends on Sep 2nd at 18:43 UTC

Proposals

Rocket Pool - GMC Treasury Diversification

Summary: This proposal seeks to diversify the Grants Management Committee treasury by converting incoming monthly payments of RPL to USDC. The GMC currently receives 3,275 RPL per month for grant distribution. According to the proposal, 20% of these funds would be swapped to USDC in order to attract more applicants through the use of stablecoins.

Aave - RFP Framework for Service Provider Engagements

Summary: This proposal seeks to establish a well-defined framework and selection process for service providers at Aave DAO. The objective is to implement a competitive bidding system that ensures the DAO obtains the most favorable rates and services available in the market. Under the proposed framework, Vendor-specific Engagements (VSE) would be introduced for engagements with a specific focus and treasury request ranging from $100K to $250K. Core Protocol Contributor (CPC) encompasses proposal requests over $250K and involves selecting from a pool of vendors in a competitive market.

Stargate DAO - Stargate Foundation 12-month Budget Proposal

Summary: This proposal aims to approve a 12-month budget for the Stargate Foundation. The proposal requests a total of $1.8M, split evenly between USDC and STG tokens. The allocated budget will be utilized for dedicated support, technical assistance, legal services, marketing initiatives, and other essential operational expenses.

Aave - sDAI Onboarding

Summary: This proposal suggests onboarding sDAI as a collateral-only asset into the Aave V3 Ethereum pool. By integrating the liquid DSR deposit token into Aave V3, Aave users will benefit by earning DSR yield while simultaneously leveraging their assets as collateral. The proposal outlines the specific parameters that need to be adjusted in order to integrate the asset.

Uniswap - Fund Combined Liquidity Incentivization Program

Summary: Here, Gauntlet and Gamma Strategies have submitted a joint proposal to fund, analyze, and execute an ARB liquidity incentive program at Uniswap. The proposal outlines a collaborative effort among various entities and protocols including Gauntlet, Angle, Arrakis, Open Block Labs, and 0xPlasma, to deploy LP rewards in an efficient and effective manner. In total, the proposal requests 2M ARB, with 1.835M ARB allocated to a multisig for the distribution of rewards, 150K paid to Gauntlet, and 15K allocated to OpenBlock Labs for their analysis work.

From the Lab

📜 Kene Web3 Lagos

This week, Kene is heading to Lagos, Nigeria for the annual Web3 Lagos Conference. On Friday he will be delivering a presentation on the value of governance smart contracts. If you happen to be in the area, don't miss the chance to drop by and say hello! 🤝

💯 1500 Governance Votes

We’ve officially crossed the 1500 governance vote mark!!

It’s been a red-hot summer for governance proposal activity. Hope you’ve been keeping up 🫡

❲ Our Proposals ❳

✅ Proposals Passed

🎠 [1IP-40] StableLab Grant Request for developing a 1inch DAO Constitution
- Protocol: 1inch
- Status: Passed
- Result: 87% ‘YES’

❲ Our Voting ❳

📆 August 25th → August 31st | 🗳️ Total Votes: 25

See our full vote history and rationale here.

Meme

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