👨‍🔬 Governance Lab #096

Lab Report #096 - Sky's MKR to SKY Upgrade, Rari DAO Treasury Committee Formation, ZKsync ETH Recovery Conversion, and more

May 02, 2025

gm frens 👋

Welcome back to the Governance Lab, your weekly source for all things StableLab, DeFi, and DAO Governance. As always, we've filtered through the noise to bring you the governance signals (and drama) that matter.

At a Glance 👀
🌌 Sky proposes finalizing MKR to SKY upgrade with staking rewards and delayed upgrade penalties
💰 Rari DAO considers forming a Treasury Committee to address liquidity and diversification issues
🔄 ZKsync Security Council seeks authorization to convert recovered ETH back to ZK tokens

Let’s dive in 🏊

Sky Ecosystem

Atlas Axis proposes finalizing the upgrade from MKR to SKY

Atlas Axis has proposed finalizing the MKR to SKY token upgrade with SKY Staking as the centerpiece feature. The plan introduces permanent USDS rewards for stakers based on protocol income, with the Atlas ensuring these rewards cannot be disabled.
Key changes include: transferring governance to SKY voting (May 15-19), disabling SKY to MKR downgrades to boost exchange adoption, activating staking with 50% Splitter rate, and implementing a graduated Delayed Upgrade Penalty starting September 18 (1% penalty increasing quarterly).

Rari Governance

cr1st0f proposes formation of Rari DAO Treasury Committee

Rari DAO member cr1st0f has proposed a Treasury Committee to address critical financial management issues, citing poor treasury oversight, inadequate $RARI liquidity (16% slippage on $10K trades), and lack of diversification. The 12-month initiative would cost $120,000 in $RARI tokens.
The committee would focus on four priorities: deploying on-chain liquidity through Uniswap V3 RARI-ETH pools, generating yield on non-RARI assets, pursuing grants on deployed chains, and implementing quarterly reporting with a monitoring dashboard. Additional plans include potentially using $ARB tokens for a Balancer V3 boosted pool on Arbitrum. TokenLogic and cr1st0f would each receive $5,000 monthly in $RARI, with StableLab providing unpaid multisig services. The proposal requests 130,000 $RARI tokens to account for price fluctuations, with unused funds returning to treasury after completion.

ZKsync Governance

ZKsync Security Council proposes authorization to convert recovered ETH to ZK

The ZKsync Security Council has proposed converting recovered ETH back to ZK tokens following April's exploit. After successful negotiations with the hacker, approximately 90% of funds were returned after a compromised admin key was used to mint ~111.8M ZK tokens from expired airdrop contracts.
Currently, the Security Council holds 44.7M ZK tokens and 1,021 ETH on ZKsync Era, plus 776 ETH on Ethereum L1. To prevent market manipulation, conversion methods and timing won't be disclosed publicly, though a comprehensive report will follow completion. If approved, the Council would manage the conversion process with all resulting ZK tokens transferred to the Token Governor Timelock. Council members must confirm no personal benefit from the trades, with authorization strictly limited to ETH recovered from the April exploit, aiming to restore the unminted airdrop supply.

Proposal Tracker™️

⚡ LIVE | Uniswap DAO - Four Chains for Analytics Hub for Uniswap's Revitalization and Growth Program

Summary: This proposal seeks community feedback on selecting four chains for analysis, contingent on the passage of the main "Analytics Hub" proposal. The proposal aims to extend Forse's analytics capabilities (built by StableLab) to four additional chains, with results displayed in the existing Uniswap Incentives terminal. Analysis will be delivered by end of Q2 2025 with a budget of $60,000 in UNI tokens, payable only upon successful delivery.

💬 DISCUSSION | Summer DAO - Set Up Governance Staking Rewards

Summary: This proposal allocates 1.44M SUMR tokens to establish governance staking rewards over a 90-day period, incentivizing active participation in the Summer Protocol's governance. The initiative aims to strengthen decentralization by rewarding engaged delegates and token holders who secure the protocol's decision-making processes. Upon approval, the proposal will authorize the Rewards Manager contract to distribute the allocated tokens according to specified parameters.

💬 DISCUSSION | Polygon DAO - Validator-Elected Block Producer

Summary: This proposal introduces a Validator-Elected Block Producer (VEBloP) architecture for Polygon PoS, aiming to boost network throughput from 714 TPS to 10,000+ TPS. The design designates a single validator as block producer per span with backup producers on standby. Key innovations include time-based spans, stateless validation using witness proofs, and anti-censorship mechanisms.

From the Lab

Blog: A Futarchy Deep Dive with Noturhandle

In our latest blog post, we introduce the Interview Series—a collection of sessions with industry leaders sharing one big idea with our team. The series captures our conversations and interviews with these thought leaders. For Session 001, we share insights from our discussion with Noturhandle, co-founder of Butter, who explores how Futarchy and Conditional Funding Markets are transforming DAO governance.

▶︎ READ the post