👨🔬 Governance Lab #031
Lab Report #031 - Optimism Collective Reflects, Aave Governance v3 Activation Plan, rETH Offboarding, Introducing StablePod, and more
gm frens welcome back to the Governance Lab, your weekly source for all things StableLab, DeFi, and DAO Governance. This week we had drama (we almost always do). Lido and stETH are still a punching bag. MakerDAO proposed changes that added fuel to this fire. Lybra Finance is trying to force a token migration and has proposed a plan. RWA narrative is debated on daily. All this and more below!
At a Glance 👀
🔴 Optimism Collective reflects and preps
🤖 BGD Labs shares Aave Governance v3 Activation Plan
🤽♂️ MakerDAO looks to offboard rETH
🎙️ Introducing StablePod
Let’s dive in 🏊
Reflections
Optimism Collective reflects on S4 and preps for S5
Following the recent conclusion of Season 4 at the Optimism Collective, the Foundation, in collaboration with the community, has begun publishing recaps, insights, and proposed enhancements for Season 5. Below is a non-exhaustive list of these changes to bring you up to speed.
Chain Delegation Program: Temporarily delegates a portion of OP from the Governance Fund to value-aligned OP Chains. Provides a transparent mechanism with clear criteria and requirements for OP Chains to participate in Optimism’s governance.
Delegate Retro Rewards: OP retroactive rewards will be given to the top delegates for their past governance contributions and involvement in Season 4. Around 60 individuals, teams, and projects have currently met the requirements and are eligible for up to 10k OP.
Collective Intents Season 5: Intents aka value-aligned focused community goals will continue in Season 5. Intent #3 will once again be decided by the community. The rest of the Intents will remain the same and are as follows: Intent #1 Progress Towards Technical Decentralization, Intent #2 Grow the Superchain, and Intent #4 Improve Governance Accessibility.
Grants Council Election & Budget: The Grants Council will once again be renewed in Season 5. All grant reviewers will be elected by the Token House in an upcoming election. Applications to be a reviewer are now open. The council will undergo several changes, including the discontinuation of its RFP program and taking on the responsibility of processing Delegation Mission Applications.
Intro to Optimism’s Security Council: Optimism aims to establish a Security Council that will oversee the enhancement of L1 protocol contracts on all OP Chains and the modification of key roles within the system, including sequencers. To introduce this council, a series of three governance votes will be conducted to implement the gradual rollout of these improvements.
Aactivation Plan
BGD Labs shares proposed timeline for Aave Governance v3 rollout
Aave DAO is undergoing a significant upgrade with the activation of Aave Governance V3. Last week, BGD Labs provided an update on the technical enhancements planned, along with the rollout and migration strategy for implementing these changes. To facilitate the upgrade, two future governance proposals will disable v2 and enable v3. The entire process will take approximately 21 days.
As a reminder, v3 will introduce notable improvements to Aave’s onchain governance system. Changes include the incorporation of Polygon PoS and Avalanche C-Chain as cost-effective voting networks, the introduction of a new and improved voting user interface, and the migration of all cross-chain communication to the a.DI (Aave Delivery Infrastructure). Additionally, the automation layer, known as Aave Robot, will streamline interactions and actions between the smart contracts. Furthermore, Aave DAO will leverage Gelato to introduce a gas tank, enabling voting to be gas-free on Polygon and Avalance, with the costs covered by the DAO. Overall, v3 aims to enhance Aave DAO's governance capabilities, improve efficiency, and empower the community to actively participate in shaping the future of Aave.
For a full breakdown of the migration timeline, see here.
Spells and Tokens
MakerDAO looks to offboard rETH as collateral and move to Spark
MakerDAO is discussing the removal of the rETH vault type from Maker Core. The move comes as a result of the vault's failure to meet the minimum DAI debt requirements as outlined in the Stability Scope, despite generating approximately 1.4 million in annualized revenue. The move has been described by Rune and the Maker community as a mere transfer of risk to Spark, Maker's SubDAO.
However, concerns have been raised from the broader ecosystem regarding the offboarding of an LST competitor to the already dominant stETH. Critics also argue that using collateral overhead as an excuse is unjustifiable.
Related to the above, there is an ongoing proposal to increase the supply cap of rETH on Spark Lend to facilitate this transfer of risk. Coverage of that proposal down below.
❲ Links ❳
🚀 Launches & Deployments
pxETH is live on Testnet
Introducing Perennial V2
📑 Insights & Reports
Why Bringing Real-World Assets Onchain Is Important
Real-World Asset Summit 2023: A Reflection
Can An Orderbook Be a Public Good?
Key Elements of an Effective DeFi Framework
🧗 Milestones & Updates
Chaos Labs <> Aave Monthly Update September 2023
MakerDAO Protocol Economics Report 2024
Yield Protocol Winds Down
StarkWare Delays First Token Unlock
🔒 Security, Risk, & Hacks
BA Labs Proposed Changes Recap for MakerDAO September 2023
🗞️ Miscellaneous
Hasu’s GOOSE Submission - Proposed Goals for Lido DAO to Consider
What Aave Governance v3 Brings to the Table
The Initial State of the dYdX Chain, A Critical Moment for the dYdX Community
Convert Entire STRD Supply to ATOM
Unified Liquidity at MakerDAO
Synthetix v3 Research Report
yETH Governance Epoch 1 Summary
Lido DAO Votes to Sunset Solana Deployment
Arbitrum Grants Program via Questbook is now live
Drama at Lybra Finance - Proposal to Force Token Migration
📺 Podcasts & Listens
Winners and Losers of Arbitrum’s Short-Term Incentive Program on Leviathan News Podcast
The Future of Onchain Stablecoins w/ Frax, Liquity, Curve, Aave, Ethena, Synthetix, and MakerDAO on Twitter Spaces
❲ Proposal Tracker ❳
🗳️⚡ LIVE | [Temp Check]: Complete initial funding of the UF
99% ‘YAE’ Vote Ends: Oct 10th 14:47 UTC
MakerDAO - Onboard USDC and USDT to SparkLend Ethereum
Summary: Here, Phoenix Labs proposes introducing borrow-only markets for USDC and USDT, implementing a USD e-mode for sDAI, USDC, and USDT, and increasing the rETH supply cap from 20k to 60k. The proposal aims to offer users the opportunity to lend their USDC and USDT at a rate slightly lower than the DSR, creating a market for those seeking minimal exposure to DAI. Given the likelihood that the rETH vault will be offboarded from Maker Core, Block Analitca has submitted its recommendation and support for the proposed changes. This proposal has subsequently been divided into three separate governance polls and is currently live.
Compound - v2 Deprecation Strategy Phase 2
Summary: Here, Gauntlet presents the second phase of the Deprecation Strategy for Compound v2. According to their proposal, Gauntlet recommends decreasing the Collateral Factor for lowly supplied v2 collateral assets while increasing the v2 USDC Reserve Factor to incentivize v2 USDC suppliers to migrate to v3. Additionally, they provide analysis on risk-off liquidations and relevant users with low health factors.
Aura - Sunsetting the Aura Maxi - Entering the Yogis
Summary: This proposal aims to establish the Yogis as a new Service Provider, replacing the current Aura Maxi SP within the Aura Protocol. The proposal asserts this change is necessary due to ongoing challenges faced by the Maxis, including limited community engagement, a lack of technically inclined leadership, and operational difficulties. The Yogis will prioritize community building, technical support, and organic decentralization. They will consist of community contributors from the Maxis as well as introduce new members. Members include JoJo, James, Jeffery, Daniel, ChromC, and Jerame. The proposal requests an allocation of $12,500 in AURA and 0.33 ETH per month, totaling $37,500 worth of AURA and 1 ETH, to cover costs in Q4 2023.
Balancer - Fund Balancer Grants Q4 2023
Summary: This proposal aims to renew and fund the Grants Service Provider at Balancer DAO for Q4 2023. Given the recent slowdown and drop in BAL price, the proposal requests a streamlined budget. The program will shift its focus towards accountability and improving the grant process. Key objectives of the program include mentoring and supporting the existing 12 grantees, funding new high-impact projects, establishing acceptance criteria and conducting performance reviews of past grantees, aligning grants more closely with Balancer's roadmap, and planning ahead for 2024, which includes organizing hackathons and other in-person events. To sustain the funding for grants and cover operational costs, the proposal requests the transfer of 11,570 BAL and 21K USDC. Current committee members include Burns, John Grant, Steve0xp, Zen Dragon, and MikeB.
From the Lab
Introducing StablePod 🧪🎙️
We launched a podcast! 🥳
StablePod is your gateway into the fascinating world of decentralized systems, governance, and beyond. Each episode, Juan and Gustav sit down to hear from the various stakeholders shaping and maintaining the decentralized systems of tomorrow. You’ll hear from Founders, Contributors, Service Providers, Foundation Members, and of course Delegates. We have a stacked lineup so make sure to tune in. 🔥
Subscribe below 👇
SafeDAO Monthly Digests 🔐🗞️
Check out the September recap for Safe DAO, published by our analyst, Nneoma! 📝
In this digest, we bring you the latest updates on the just concluded Wave 1 of the Safe Grants Program, as well as the most recent developments in Safe community initiatives and proposal updates within SafeDAO.
You can read the full September recap here.
❲ Our Voting ❳
📆 September 29th → October 5th | 🗳️ Total Votes: 23
See our full vote history and detailed rationale HERE.
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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 :)
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