👨🔬 Governance Lab #035
Lab Report #035 - GHO Stability, CGP2.0 Renewal, ARB Staking Mechanism, and more
Frens, welcome back to the Governance Lab, your weekly source for all things StableLab, DeFi, and DAO Governance. This week, we released a podcast featuring Phoenix Labs, core contributors at Spark Protocol. Maker is doing this thing where it incubates ecosystem actors, also known as service providers. Personally, I’m excited to see how this experiment plays out in helping bootstrap teams and projects that not only benefit Maker, as Rune has clearly articulated, but also in creating this ripple effect throughout the industry. In addition to Phoenix Labs, we have Chronicle, BA Labs, and dozens of other highly talented teams involved. We’ll just have to wait and see. Enjoy!
At a Glance 👀
🥊 Aave DAO fights for GHO stability
🎁 Compound votes to renew CGP2.0
🥩 Arbitrum DAO votes on staking mechanism
🎙️ New StablePod episode w/ Nadia Alvarez & Sam MacPherson (Phoenix Labs)
Let’s dive in 🏊
Fight for Stability
Aave DAO fights for GHO stability
Aave DAO continues to take decisive actions to restore GHO to its peg. Despite recent interest rate hikes, the price of GHO has been on a downward trend. In response, a new proposal has been introduced to raise the GHO borrow rate from 3.0% to 4.72%. This increase aims to align the GHO borrow rate with the current sDAI rate, thereby reducing the attractiveness of minting GHO compared to other stablecoins. Aave's existing strategy to increase the borrow rate by 50 basis points every 30 days until GHO is pegged will remain unchanged.
Risk Service Provider Gauntlet has shared a community action plan designed to ensure the stability and peg of GHO. In their proposal, Gauntlet sheds light on the market dynamics surrounding GHO, suggests methods to foster its demand, and provides recommendations for scheduled updates. The proposal highlights the importance of stimulating organic GHO demand and identifies issues with the existing repeg approach. To address this, Gauntlet proposes exploring new use cases for GHO within the Aave lending platform itself, such as staking GHO to reduce borrow rates for WETH, USDC, USDTC, and other assets, or staking GHO to earn GHO Savings Rate. Furthermore, Gauntlet’s schedule recommendation includes bringing GHO to peg via ongoing community discussions, activating the GSM, and closely monitoring GHO liquidity and demand.
In related GHO news, TokenBrice from the GHO Liquidity Committee announced this week that they were elected by the Aave DAO working group to spearhead liquidity strategy efforts for repegging GHO. To achieve this, they have outlined a plan to leverage the Maverick Protocol to create static pools for GHO within a desired price range. The first of these has been deployed and is called “GHO Peg Support Pool I.”
Vote for Renewal
Compound votes to renew and update CGP2.0
After months of community feedback and discussions, the on-chain proposal to renew the Compound Grants Program is now live. CGP 2.0 successfully launched in early 2023, distributing approximately $400K in grants to projects and teams building within the Compound ecosystem. With a few revisions and enhancements, the CGP aims to continue this same mandate. The proposal requests 970K, in COMP, to fund two quarters, supporting initiatives across three domains: Dapps and New Protocol Ideas, Multi-Chain/Cross Chain Strategy & Dev Tooling, and Security Tooling.
❲ Links ❳
🚀 Launches & Deployments
Unveiling the Prisma DAO
Celestia mainnet is live
Radiant Capital is live on Ethereum Mainnnet
Aave Delivery Infrastructure is live
Announcing Butter Finance
📑 Insights & Reports
Building on Safe: a Security Veto for oSnap DAOs
Arbitrum STIP or: how i learned to stop worrying about governance and might bridge to Arbitrum
Wintermute DeFi Governance Digest
🧗 Milestones & Updates
Aave Grants DAO News Update August 2023
Lido LEGO Report Q3 2023
Optimism Governance Update #8
Maker RWA Asset Report Sep 2023
Maker Risk Report October 2023
🔒 Security, Risk, & Hacks
Arbitrum Security Council Elected
🗞️ Miscellaneous
Adjust SparkLend Parameters
Uniswap Governance Simulation Module
Aragon DAO demands update on $160m treasury as frustration mounts
Announcing the Early Community Member Program
SushiSwap Governance Overhaul
AGP-1 Aevo New Governance
Velodrome Liquidity Program Extension
Head Chef memo to the Sushi community, a year in review
📺 Podcasts & Listens
Julian from Karpatkey: The Art of DAO Growth and Capital Preservation on DAOversified
Rune Christensen: The Future of subDAOs on Flywheel
Variant's Geoff Hamilton: The Next Thing in Stablecoins
Presentations on Governance, On-Chain Voting, and Proxy Delegation by a16z Research
❲ Proposal Tracker ❳
Arbitrum - Activate ARB Staking
Summary: This proposal aims to introduce an ARB staking mechanism to enhance the utility of Arbitrum's native token by rewarding users who lock their tokens. To further align incentives and create a supply sink for the ARB token, a 12-month trial for this staking mechanism is suggested. The proposal presents four options to voters regarding the total ARB supply allocated for staking: 1.75% (175M ARB), 1.5% (150M ARB), 1.25% (125M ARB), or 1% (100M ARB). Additionally, the proposal suggests leveraging the Arbitrum Coalition to monitor the staking mechanism's impact, submit reports, and provide recommendations. If approved, several additional steps, including implementation and contract development, audits and community review, and disbursement of reimbursements, will be required.
Redacted Cartel - Build Marionette
Summary: This proposal seeks community approval to develop Marionnette, a voting optimizer designed for bribe markets. Marionnette is the newest addition to Redacted's "bribe marketplace trifecta" alongside Hidden Hand and Pirex, which aims to assist users in maximizing their rewards by efficiently managing the voting power of veTOKENs and voting optimally on gauges for maximum rewards. At launch, the protocol will support VELO and AERO. The protocol will tax 10% of all voting power delegated to it and allocate these funds to the Redacted Strategic Asset Committee to incentivize BTRFLY, pxETH, DINERO, and other Redacted-aligned pools.
Stargate - Stargate <> f(x) Protocol Partnership
Summary: This proposal aims to establish a strategic partnership between f(x) Protocol and Stargate. f(x) Protocol, developed by Aladdin DAO, tackles the stablecoin trilemma by introducing fETH, a decentralized and highly scalable token with low volatility. This approach ensures the stability of fETH through the use of a second token, xETH, which has higher volatility. According to the proposal, Stargate will serve as the primary cross-chain bridging protocol for f(x), while also committing to minting 250K fETH or more, which will be held for at least one year. By depositing these assets, Stargate can earn an approximate 5% APY in f(x)'s Rebalance Pool.
ENS - Service Provider Streams
Summary: This proposal seeks to establish a dedicated funding stream of $10K per day ($3.6M/year) for multiple service providers of the ENS DAO. Interested service providers can submit proposals and budgets to be reviewed and approved by the DAO. Initiatives that service providers can undertake include developing alternative open-source front ends, creating developer tooling, and developing tools that contribute to the decentralization of ENS and beyond.
From the Lab
Meet us at Breakpoint ☀️
Doo and Nneoma are currently in Amsterdam attending Breakpoint, the annual Solana ecosystem conference. If you happen to be in attendance, feel free to DM us to meet or to say hi! We love connecting with you!
StablePod - Sparking MakerDAO’s Next Evolution 🎙️
On the latest episode of StablePod, we chat with Nadia Alvarez and Sam MacPherson of Phoenix Labs. In our conversation, we discuss the rapid growth of Spark, How Phoenix Labs was formed, Maker SubDAO governance, and much more.
SGP Wave 1: Govern Grantee 🏛️
We’re honored to be selected as Grantees for Wave 1 of the Safe Grants Program.
Nneoma will focus on streamlining SafeDAO's governance process, boosting engagement, and fostering community contribution by introducing targeted solutions for Governance Facilitation, Community Education, Engagement, and Activation. Stay tuned!
❲ Our Proposals ❳
🦄 Delegation of UNI to Active but Underrepresented Delegates
Protocol: Uniswap
Author: Doo
Status: ⚡ LIVE on Snapshot
❲ Our Voting ❳
📆 October 27th → November 2nd | 🗳️ Total Votes: 17
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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