👨🔬 Governance Lab #045
Lab Report #045 - Uniswap DAO Delegate Rewards, Aave DAO Merit Program, Gauntlet leaves Aave DAO, Karpatkey requests GnosisDAO spin-off, and more
gm frens 👋
Welcome back to the Governance Lab, your weekly source for all things StableLab, DeFi, and DAO Governance. Lending protocols stole some spotlight this week. Lots of innovation happening here with the launch of Fluid, Euler v2, and Spark & Morpho hot on the heels of Aave. Will be interesting to see how risk management and governance of these protocols evolve. Speaking of risk, the leading service provider has ended its long-standing relationship with Aave (wow). Meanwhile, in the land of L2s, Starknet had a shaky airdrop, Optimism was busy sorting through mission requests, and Arbitrum LTIPP was fully approved. Arbitrum protocols may now apply for incentives. Busy week. All this and more below, enjoy :)
At a Glance 👀
🏅 Uniswap DAO discusses delegate rewards
🦸♂️ Aave DAO votes on incentives, Gauntlet leaves
🦉 GnosisDAO receives spin-off request from Karpatkey
Let’s dive in 🏊
Incentives
Uniswap DAO discusses delegate incentives
Uniswap DAO has received two proposals this week regarding delegate rewards. The first proposal, put forth by our team, aims to introduce delegate incentives by establishing specific eligibility criteria focusing on voting participation, communication, and badge ownership. The proposal highlights the recent success seen from delegating to underrepresented delegates, citing their impressive 100% voting participation rate in the past three months since implementation. Currently, the proposal is seeking $100k in UNI tokens to kickstart a 6-month program. Details of the program are expected to be further refined and changed based on community feedback.
In the second proposal, Bobby from UMA Protocol has suggested the initiation of a gas rebate program. The proposal sheds light on the substantial costs incurred by Uniswap governance, averaging $4K per proposal in gas fees and accumulating to a total of $150K all time in onchain voting. To address these high costs and governance barriers, Bobby's proposal recommends the launch of a $50K gas refund initiative for eligible voters by leveraging UMA’s Optimistic Oracle and custom scripts. Recent discussions on the forum hint at the possibility of merging these two related proposals to streamline the process.
Merits & Breakups
Aave DAO votes on controversial ‘Merit’ program; Gauntlet abruptly leaves
The Aave community is currently voting on the ARFC stage of a proposed Merit Reward System Program. Merit aims to enhance Aave's attractiveness to users through artificial incentives amidst numerous competitive forks and optimizers built on the lending protocol. The proposal has stirred controversy due to the suggested introduction of "Diluters" to the reward system. Specifically, the proposal recommended substantially diluting rewards for users of "Non-aligned Protocols." Following approval of its Temp Check phase in early February, Marc Zeller, the author, has presented new changes and improvements to the contentious proposal. In the latest version, Zeller clarified the eligible actions and simplified the Merit Booster & Diluter criteria. The proposal plans to allocate 5M GHO over 90 days to actively reward eligible users.
In another development at Aave, Gauntlet, a long-standing service provider for the DeFi protocol, has unexpectedly terminated its agreement with the DAO. The service provider cited challenges in navigating the inconsistent guidelines and unspecified objectives of the major stakeholders. In December, the Aave DAO had voted to extend Gauntlet's $1.6M contract for an additional year. This termination marks the conclusion of a four-year partnership between the leading risk management provider and the leading lending protocol.
Spin-Offs
Gnosis DAO discusses Karpatkey spin-off
Karpatkey, the DAO Treasury Management team, has submitted a proposal at GnosisDAO to officially transition into an independent DAO. Born from the Gnosis community, the proposal aims to establish Karpatkey as a distinct entity with its governance token, treasury, and operations. The proposal details the intended utility and supply for KPK, its native token. As a GnosisDAO initiative, the proposal seeks community endorsement and pledges future token distribution. The move follows a similar pattern of Gnosis-born projects eventually spinning off such as CowDAO and SafeDAO. Karpatkey serves as an asset manager for various DAOs, including Balancer, Lido, Aave, ENS, CoW DAO, and of course GnosisDAO.
❲ Links ❳
🚀 Launches & Deployments
📑 Insights & Reports
Euler v2: The New, Modular, Age of DeFI
Paternalism Versus The Invisible Hand in the Risk Management of Lending Protocols
Karpatkey DAO: Strategic Significance
Liquid Restaking Report: The Ultimate LRT Q1 2024 Market Overview
Wintermute DeFi Governance Digest: Feb 22 2023
Introducing the next evolution of CDPs
🧗 Milestones & Updates
Starknet Foundation Introduces: The Start of DeFi Spring
Safe Grants Program: Wave 1 Roundup
Uniswap Foundation- How Our Grant-Making Process Works
Uniswap Monthly Financial Report & Analysis - Jan. 2024
MakerDAO RWA Report Jan 2024
🔒 Security, Risk, & Policy
USDM Mountain Protocol Review
DeFi Policy Principles: A First Principles Approach
🗞️ Miscellaneous
TreasureDAO: Ecosystem Selection for the Treasure Chain
Yearn: Launch yPools
Aura Finance: Hyperlock Funding Request
Frax Finance: FPIS to veFXS Merger
The Collective DAO Catalog
❲ Proposal Tracker ❳
✅ COMPLETED | Instadapp - Accept Fluid Configs and Launch Protocol
Summary: This proposal enables the function and launch of Fluid along with its initial parameters, markets, and rewards. The Fluid Protocol comprises a series of contracts, including a Lending Protocol, Vault Protocol, and Liquidity Layer. Some of the initial configurations described in the proposal include launching lending markets for USDC, USDT, & ETH, and deploying 5 vaults - ETH/USDC, ETH/USDT, wstETH/USDC, wstETH/USDT, wstETH/ETH. The proposal also outlines early liquidity incentives for USDC and USDT markets.
⛓️ LIVE | dYdX - Add STRK-USD perpetual market
Proposal: This on-chain proposal suggests adding the STRK-USD perps market to the dYdX Chain. Risk Service Provider Chaos Labs suggests listing the market under Liquidity Tier 2 risk parameters. dYdX employs a standardized liquidity tier framework for all new market listings to establish the initial risk parameters for the proposed market.
⛓️ LIVE | Lido DAO - Simple DVT Release
Summary: This proposal aims to ratify and deploy Simple DVT on Mainnet. Simple DVT is Lido’s latest experiment in early-stage distributed validator technology leveraging the Obol Network and SSV network to further diversify and onboard Lido Node Operator sets. To prevent operational inefficiencies, the proposal will introduce the Simple DVT Module Committee, a multi-sig in charge of setting parameters for the Easy Track factories. Following months of tests and audits, this onchain vote will ratify all technical aspects related to the release.
💬 DISCUSSION | Gitcoin - Aave Grants DAO Partnership Proposal
Summary: This proposal aims to allocate $25,000 from Gitcoin’s matching pool for a collaborative effort between Gitcoin DAO and Aave Grants DAO. Aave Grants DAO will match this amount, totaling $50K aimed at bolstering the Aave ecosystem through a Quadratic Funding Round. The focus of this round will be on supporting impactful projects, with an emphasis on retroactive grants and assisting previous AGD grantees.
From the Lab
Meet us at ETH Denver
Find Nneoma and Matt at ETH Denver next week! They’ll be running around the main event along with dozens of side events and parties. DM us if you want to meet and don’t hesitate to say hi! 👋
Rari Chain Sequencer Revenue Split
Our proposal to split the sequencer fees generated by the Rari Chain has been posted on Tally. With the Rari Chain live and operational, this proposal aims to split the sequencer fees fairly and productively, fostering sustainability and growth for both entities.
See the full proposal HERE.
❲ Our Voting ❳
📆 January 16th → January 22nd | 🗳️ Total Votes: 25
See our full vote history and detailed rationale HERE.
Meme
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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