👨🔬 Governance Lab #032
Lab Report #032 - GHO Borrow Rate, Hasu's Plan, STIP at Arbitrum, Vote for Nneoma for UAGP
Welcome back to the Governance Lab, your weekly source for all things StableLab, DeFi, and DAO Governance. In case you missed it, we launched a podcast last week. One of the biggest motivations for starting the podcast was the need to host more nuanced discussions with the builders, contributors, and projects actively servicing DAOs and their governance. There are many incredibly smart people trying to solve these complex human and technical problems, which are often the butt of jokes or overlooked in favor of the much more enticing PMF and protocol design discussions. So, thank you to those who have tuned in so far, and I look forward to providing a platform to hear from the many failures, but also the hope, that this little experiment we like to call DAO governance will evolve and improve.
At a Glance 👀
⬆️ Aave DAO vote to increase the GHO borrow rate (again)
✨ Hasu shares their vision for Lido DAO
💉 Voting on STIP at Arbitrum draws its conclusion
🗳️ Vote for Nneoma in the UNI-ARB Grant Program!
Let’s dive in 🏊
Every 30 Days, Raise it
Aave DAO votes to increase the GHO borrow rate (again)
Aave DAO is once again voting to raise the borrow rate for GHO in an attempt to restore its peg. Marc Zeller has proposed increasing the GHO borrow rate by 50bps from 2.5% to 3%. This adjustment is driven by a previous increase that helped bring GHO closer to its intended peg value while also generating additional revenue for the DAO.
GHO continues to suffer due to its cheapness relative to other stablecoins, especially sDAI. Some in the Aave community have suggested adopting an automated approach or gradually increasing the rate until GHO falls within an acceptable price range. Should the initial TEMP CHECK proposal be approved by governance, the ACI will be granted the power to use a direct-to-AIP process to raise the rate by 50 bps every 30 days, as long as the GHO peg is outside 0.995<>1.005 monthly average price range, up until it hits 5.5%.
Release the GOOSE
Hasu shares their vision for Lido DAO
Hasu, the outspoken strategic advisor at Lido, has shared their response to the GOOSE framework. The Guided Open Objective Setting Exercise (GOOSE) is Lido’s attempt to further align the community on a unified mission and vision for the expansion and decentralization of the DAO.
In their post, Hasu emphasizes that Lido’s main objective should be to “increase the DAO’s chances of fulfilling its purpose of keeping Ethereum decentralized, accessible to all, and resistant to censorship”. Hasu outlines three long-term goals: establishing effective decentralized governance, attracting the best validator set in the market, and making stETH the most widely used token in the Ethereum ecosystem.
Other notable points mentioned in the post include the need to prioritize evolving Lido's dual governance, implementing an iterative governance framework, and actively promoting and incentivizing participation in governance.
This GOOSE framework follows a recurring trend we see across decentralized organizations, aiming to unify efforts under a single message and vision to bring focus and inspire further contributions. Optimism, SafeDAO, and 1inch serve as great examples of this.
STIPmulus Plan
Arbitrum STIP voting nears conclusion
Voting for the Short-term Incentive Program (STIP) at Arbitrum is nearing its conclusion. Here are the latest figures:
⚡ 97 Total Snapshots Proposals
✅ 56 Projects Currently Passing (as of this writing)
Notable projects include GMX, JonesDAO, Dopex, Camelot, Pendle, Tally, MUX, Timeswap, Frax Finance, Lodestar, Vertex, Balancer, and more. For the full breakdown see this sheet here.
💰 73.6M ARB is the approved projects cumulative ARB ask amount, but only 50M will be distributed among the top proposals in order by total ‘For’ votes until depleted.
Following the official conclusion of Snapshot voting later today and the execution of the onchain proposal, a multisig will begin distributing funds to eligible projects. A separate Request for Proposals has been posted on the forums to find a service provider capable of tracking and monitoring funding data to ensure accountability and transparency. An expansion of the STIP program has also been published on the forums here.
❲ Links ❳
🚀 Launches & Deployments
Reserve Protocol is live on Base
SparkLend deploys on Gnosis
📑 Insights & Reports
Embracing Speculation as a Go-To-Market Approach in DeFi
Protocol and staking pool changes that could improve decentralization and reduce consensus overhead
Overview of On-Chain RWAs and the Forces Propelling Their Growth
A List of Open Problems in Crypto - Part II
🧗 Milestones & Updates
Aave Governance V3 Activation Begins Today (or Tomorrow)
Market Conditions and MakerDAO Competition Analysis October 2023
🔒 Security, Risk, & Hacks
USDR depegs by 50%
Gitcoin DAO Accidentally Burns ~500k GTC
🗞️ Miscellaneous
Introducing Parthenon: Olympus On Chain Governance
Magnitude and Direction of LIDO Attack Vectors
Staking Router Module Lido Proposal: Simple DVT
Lido Criticized for Arbitrum STIP Grant
The LSTfi Ecosystem
ARB STIP Dashboard
📺 Podcasts & Listens
Cliffton: DAO Relations Lead at Arbitrum DAO on DAO Talk Podcast
Shann (Gauntlet): The Unsung Hero of DeFi Risk Management on DAOversified
❲ Proposal Tracker ❳
Element Finance - Unwind GSC Treasury & Begin Unwinding of the Main Treasury
Summary: These are two separate onchain proposals that involve unwinding positions and treasury holdings at the Element DAO. EGP16-1 seeks to withdraw active LP positions from Balancer pools that are owned by the DAO. Once these assets are redeemed and transferred, they will be moved to the main treasury unwinding the GSC treasury in the process. EGP16-2 seeks to withdraw approximately $192k in USDC in assets wound up in Yearn positions from the main treasury. Future proposals to further unwind CRV assets are planned. The DAO will use these newfound treasury assets to fund operations.
Balancer - Deposit 160k BAL into Aave v3
Summary: This proposal aims to bolster the partnership between Aave and Balancer by depositing an additional 160k BAL into Aave V3. Currently, the DAO has already deposited a total of 188k BAL from its 350k BAL holdings into Aave. By lending these assets, the DAO treasury generates additional returns on otherwise idle BAL holdings.
Balancer - Delegate DAO Grant ARB to LM Multisig
Summary: This proposal seeks to further align Balancer with Arbitrum by actively participating in their governance process. The proposal requests the Balancer DAO Multisig and the Balancer LM Multisig delegate their ARB holdings to the LM Multisig so the Balancer Maxis can contribute to Arbitrum governance on the DAO’s behalf and interests.
Balancer - Delegate BalancerDAO AAVE/stkAAVE to karpatkey
Karpatkey, the current treasury manager service provider for Balancer DAO, is requesting delegation of the AAVE/stkAAVE holdings in the DAO treasury. With approximately 16.9k delegated voting power, Karpatkey aims to represent Balancer DAO’s interest at Aave. The proposal outlines a delegation strategy that focuses on voting incentives for Aave's pools on Balancer, establishes Balancer as the leading automated market maker (AMM) for GHO, and implements crucial updates to the Safety Module.
Aura Finance - [AIP-XX] Base Deployment
Summary: This proposal looks to continue Aura’s cross-chain strategy by deploying on Base Chain. The proposal will enable the bridging of AURA tokens from Mainnet to Base Chain. Aura is currently deployed on Mainnet, Arbitrum, Optimism, Polygon PoS, and Gnosis.
From the Lab
Vote for Nneoma! 🗳️
Grant Reviewer elections for the UNI-ARB Grant Program are currently underway at Uniswap. Nneoma is in the lead to secure one of the three open seats. Special thanks to the delegates who have shown their support thus far. If you’re a UNI tokenholder consider casting your vote here. Voting ends Oct. 14th.
❲ Our Proposals ❳
🎠 [1RC] 1inch Governance Participation & Delegation Incentive Program
Protocol: 1inch
Author: Kene & Jordan (1inch Core)
Summary: This proposal aims to establish an incentivization plan that actively encourages participation at 1inch governance. The plan entails a three-month trial phase during which users will be rewarded with 1inch incentives for voting on proposals or delegating voting power. To fund this experiment, the proposal suggests allocating a total of 75K USDC. A reward formula for how these rewards get calculated is shared within the post.
Status: 💬 Forum Discussion
❲ Our Voting ❳
📆 October 6th → October 12th | 🗳️ Total Votes: 119
See our full vote history and detailed rationale HERE.
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