👨🔬 Governance Lab #048
Lab Report #048 - Maker DSR Hike & Endgame Update, Aave Merit Program addendum, Gnosis 3.0, StablePod w/ Marcelo (Karpatkey), and more.
gm frens 👋
Welcome back to another weekly edition of the Governance Lab, your source for all things StableLab, DeFi, and DAO Governance. StablePod is back! After a short hiatus, our podcast makes its return with a new episode featuring Marcelo from Karpatkey. Check out the episode below. 🎧
On the docket this week: DeFi rates shift the market, Gnosis evolves, Lido governance picks up steam, oh and Dencun upgrade brings us blobs making L2s much cheaper. This is and much more below, enjoy 😄
At a Glance 👀
🏦 MakerDAO increases DSR while Rune gives an update on Endgame
👻 Aave DAO adjusts to rate hikes with Merit Program changes
🦉 Gnosis DAO is introduced to the Gnosis 3.0 vision
🎙️ StablePod returns! New episode w/ Marcelo (Karpatkey)
Let’s dive in 🏊
Emergency Hikes
MakerDAO pushes an emergency proposal adjusting DSR to 15% while Rune gives an update on Endgame
Last Friday, MakerDAO mobilized to ensure its PSM reserves were sufficient as DAI demand spiked due to bullish market sentiment across the ecosystem. BA Labs, the authors of the proposal, submitted a temporary adjustment to the DAI Savings Rate (DSR), increasing it from 4% to 15%. With a decreasing DAI supply and depleting USDC reserves, the rate hike rippled through DeFi, as the DSR is unofficially treated as the de facto benchmark rate. The proposal also significantly increased stability fees across a multitude of Maker’s vaults, ensuring the financial stability of the DSR increase. Some pushback was seen in the forums and across Twitter, which focused on the large rate jump and the potential adverse secondary effects it may have.
On Tuesday, Rune posted an updated timeline and additional details for the upcoming Endgame plan. In his post, Rune dives into Phase 1, the nearest-term phase scheduled for Summer 2024. During this phase, a new brand will be revealed, two new tokens will be launched, and the Lockstake Engine will go live. Additionally, NewBridge will launch, and Spark DAO will debut, including its governance and added protocol features such as support for Real World Assets and perpetual swap yields. The remainder of the post breaks down the subsequent Endgame phases, including Phase 2 - Scaling Up, Phase 3 - NewChain, and Phase 4 - Endgame. In the coming months, Rune plans to submit significant governance changes that will pave the way for Phase 1 and the subsequent stages of the Endgame plan.
Addendums & Increases
Aave DAO passes addendum to Merit Program, passes Funding proposal, and discusses Borrow Rate increase
On Monday, the Aave community approved changes to the Merit Program to help ensure long-term rewards in AAVE for stkGHO holders. A new "Hold StkGHO" action was added to address concerns about rewarding non-enforceable actions due to the GHO borrow cap being reached. The proposal also delays GHO distribution as rewards, helping ensure the native stablecoin maintains its peg.
A related "Funding Update" proposal was also ratified onchain this week. It consolidated DAO assets in preparation for Merit's launch and other upcoming expenses. Actions included consolidating smaller holdings into GHO, swapping larger stablecoins for GHO, replenishing stablecoin reserves in v3, migrating funds from v2 to v3, and bridging funds from Polygon to Mainnet.
Due to rising stablecoin rates across DeFi, the Financial Service Providers at Aave DAO have put forth a proposal to raise the GHO Borrow Rate to further strengthen GHO’s peg. The proposal aims to double the non-discounted borrow rate from 7.49% to 15%, aligning it with the DSR. Additionally, the proposal seeks to provide the GHO Stewards with greater flexibility in their capacity to adjust the GHO Borrow Rate and Cap moving forward.
Three Point Oh
Gnosis DAO discusses Gnosis 3.0
Late last week, Friederike Ernst, Co-founder of Gnosis, shared the vision and roadmap for Gnosis 3.0. In this new chapter, Gnosis aims to evolve from being solely focused on Ethereum infrastructure to becoming a "collective of aligned projects connected by the GNO token." Gnosis shifts its focus towards making decentralized financial tools accessible to everyone, with an emphasis on payments and financial rails. The post outlines the structure of Gnosis 3.0 and how the various components are interconnected. This structure includes Gnosis Chain, Gnosis DAO, Gnosis Venture Capital, Gnosis Venture Studio, and the various projects and teams building within it, such as Gnosis Pay, Gnosis Labs, Gnosis Wallet, Safe, CoW, Karpatkey, and others. More details about this evolution are expected in the coming weeks.
❲ Links ❳
🚀 Launches & Deployments
Introducing the Hyperdrive Protocol
📑 Insights & Reports
MakerDAO Financial Report 2023 by Steakhouse Financial
Corporate—>DAO Finance
Benchmarks and performance attribution for DAO treasuries
Assessing the Permissionless Lending Landscape
Wintermute DeFi Governance Digest: March 2024 | Week 2
🧗 Milestones & Updates
MakerDAO Financial Report 2023
🔒 Security, Risk, & Hacks
Oracle Risk and Security Standards: An Introduction
The DUNA: An Oasis for DAOs
🗞️ Miscellaneous
Frax Finance: [FIP - 338] Re-activate fee switch
Lido: stETH on L2
ReGov Recap: Governance Survey
Dissolving the Forefront DAO
📺 Podcasts & Listens
Debating the MakerDAO Endgame on 0xResearch
❲ Proposal Tracker ❳
💬 DISCUSSION | Lido - Simple On-chain Delegation
Summary: Here, the Lido DAO Ops Workstream has submitted a proposal to implement a Simple On-chain Delegation mechanism. Due to ongoing issues reaching quorum, the proposal aims to help activate more voting power by allowing LDO holders to delegate their voting power to designated addresses. The target is to increase active voting power onchain by 20-30 million LDO per quarter. The proposal is undergoing security audits, with a snapshot vote scheduled for March and an on-chain vote event planned for April.
💬 DISCUSSION | Arbitrum - Catalyze Gaming Ecosystem Growth on Arbitrum
Summary: This proposal aims to introduce the Gaming Catalyst Program (GCP), an initiative focused on supporting and strategically allocating resources to make Arbitrum the home of web3 gaming. The proposal notes Arbitrum's success as a DeFi-first chain and points out the large number of gaming projects already building on the network. The proposal describes itself as a growth catalyst and foundation for a longer-term and more comprehensive program. To enable the GCP, a 5-person council will be responsible for approving and whitelisting promising teams. Part of the funding will be used to co-invest in these projects through a new venture team overseen by the council. In total, the proposal requests 200M ARB over two years to boost the gaming ecosystem. The GCP will allocate 160M ARB towards onboarding and growing builders, and 40M ARB toward infrastructure bounties. An offchain vote is planned in the coming days.
💬 DISCUSSION | Balancer - Deploy Balancer on Monad
Summary: This proposal from the BD Lead at Monad Labs aims to bring Balancer to Monad, an upcoming high-performance EVM-compatible alt L1. According to the proposal, approving the deployment gives Balancer an early foothold in the growing DeFi ecosystem on Monad. If passed, Monad Labs will work with Balancer to establish an appropriate timeline for testnet and mainnet launch, currently planned for Q4 2024.
From the Lab
New StablePod! Karpkatkey: The Bank for DeFi
After a short break, StablePod returns better than ever. In our latest episode, we’re joined by Marcelo, Co-founder of Karpatkey, the premier asset management team for DAOs. We discuss Karpatkey’s founding story, their recent fundraising efforts, GIP-92, DeFi financial services, and lots more.
Join the StableLab team!
We’re looking for a new team member to join us in our mission. We’re actively seeking a Junior Governance Analyst to help support our governance team. If you’re interested in DAOs, Governance, and DeFi, we want to hear from you!
❲ Our Voting ❳
📆 March 8th → March 14th | 🗳️ Total Votes: 36
See our full vote history and detailed rationale HERE.
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