👨‍🔬 Governance Lab #100

Lab Report #100 - Compound's Governance Platform Selection, Arbitrum's Agentic Governance Debate, Wormhole's Process Ratification, New StablePod w/ Lane (Near Foundation) and more

May 29, 2025

gm frens 👋

Welcome back to the Governance Lab, your weekly source for all things StableLab, DeFi, and DAO Governance. We’ve officially reached a milestone with our 100th newsletter edition. A massive thank you to each and every one of you for your continued readership and support. 😊🎉💯🥂

At a Glance 👀
🔴 Compound DAO evaluates Aragon's governance platform proposal
🔍 Arbitrum DAO debates Event Horizon's 7M ARB delegation amid pivot to agentic governance
🔄 Wormhole DAO votes to ratify governance proposal process
🎙️ New StablePod w/ Lane Rettig (Near Foundation)

Let’s dive in 🏊

Compound Governance

Compound DAO evaluates Aragon governance platform proposal

Aragon has proposed to become Compound DAO's dedicated governance service provider, offering a modular solution to address ongoing quorum issues. As of April 2023, only 1.8% of COMP supply participated in votes, missing the 4% quorum requirement, with 2024 witnessing multiple quorum failures on technical and risk parameter proposals.
Aragon's solution would integrate with Compound's existing Governor DAO setup, adding specialized governance tracks such as grants distribution, treasury management with tokenholder vetoes, and emergency response capabilities. Pricing is $5,000 per month ($60,000 annually) for the first year, with Compound able to use Aragon's open-source infrastructure for free thereafter.
The Compound Governance Working Group is coordinating an evaluation process that includes a competing proposal from Tally. They plan a light RFP process to gather applications from multiple providers, enabling delegates to compare metrics and pitches before deciding. This structured approach aims to avoid duplicative services while ensuring access to the best options for scaling Compound's governance infrastructure.

Arbitrum Governance

Arbitrum DAO proposes Event Horizon voting power adjustment

L2BEAT has proposed adjusting Event Horizon's 7M ARB delegation following their pivot from human voter enfranchisement to AI-agentic voting, which was not part of the original September 2024 mandate. The proposal offers three options: maintaining current delegation, reducing to 100,000 ARB, or returning all funds to treasury, with a Snapshot vote scheduled for May 29-June 5.
Event Horizon fully supports the proposal as part of their transition toward deeper AI infrastructure investment, while community delegates express mixed views on the appropriate response. Key concerns include the impact on quorum achievement (given concurrent proposals to reduce quorum from 5% to 4.5%), transparency of AI decision-making processes, and governance risks of maintaining significant voting power behind unaudited experimental systems.

Wormhole Governance

Wormhole DAO votes to ratify governance proposal process with structured timeline

Wormhole's WIP-2 proposal introduces a formal 7-step governance process designed to standardize proposal development and voting procedures. The process includes idea development, draft submission, community comment periods, temperature checks, final proposal submission, voting phases, and implementation with monitoring, establishing clear timelines and requirements for each stage.
The governance framework sets specific parameters including a 115M W token quorum for temperature check Snapshot votes and 350M W token quorum for final onchain votes using Tally powered by MultiGov. The voting process includes a 2-day delay period, 5-day voting period, and 4-day timelock execution delay, with a 1M W token proposal threshold and Foundation veto rights for legal non-compliance.

Proposal Tracker™️

💬 DISCUSSION | Arbitrum DAO - Wind Down the MSS + Transfer Payment Responsibilities to the Arbitrum Foundation

Summary: This proposal seeks to sunset the Multisig Support Services (MSS) and transfer payment processing responsibilities to the Arbitrum Foundation due to funding shortfalls and operational inefficiencies. The MSS, established in April 2024 with 600k ARB to manage six multisig wallets, now oversees eight active multisigs including MSS Payroll + R3gen, Delegate Incentive Program, Event Horizon, ADPC Subsidies, Hackathon Continuation Program, Stylus Sprint, ARDC V2, and 2025 Events Budget. The proposal argues that since the Foundation already handles compliance (KYC/KYB) and reviews for nearly all MSS activities, consolidating operations would reduce OpEx spending, improve security with full-time employees, and provide clearer accountability.

💬 DISCUSSION | Compound DAO - Unichain Growth Campaign

Summary: This proposal, authored by AlphaGrowth, proposes a $700k COMP campaign to grow Compound V3's TVL on Unichain from $5 million to $100-200 million within 90 days, targeting the $100-200 million addressable market for USDC and ETH lending. The five-part strategy allocates incentives across: stablecoin supply (20-40%), ETH supply for LST/LRT loops (15-30%), structured-product partner vaults with ≥30-day lock periods (10-30%), Unichain Conditional Funding Markets participation targeting $200-500k in matched UNI tokens, and gamified quests requiring $100+ deposits (5-10%). The budget includes $400k for incentives and $300k for operations ($100k upfront, $200k vested via Sablier), with performance bonuses of $50k COMP per additional $10 million TVL above the $100 million target. Success metrics include 60% average utilization, 70% TVL retention 30 days post-campaign, and securing $100-500k in UNI matching funds.

💬 DISCUSSION | Initia - Initia Chain Upgrade Proposal #1: Taking Off the Training Wheels

Summary: This proposal implements Initia's v1.1.0 release, introducing emergency proposal whitelisting, OP withdrawal period adjustments, and controversial staking reward reductions. The emergency proposal framework restricts submission to whitelisted addresses that can only be modified through governance. This change reduces tally time from the current 1-day period back to 5 minutes for qualified submitters. The upgrade also gives governance control over asset withdrawal times and rollup finalization periods across Interwoven Rollups. Most controversially, it proposes slashing the staking reward release_rate from 0.05 to 0.0125—a 75% reduction that corrects "accidental genesis parameters."

From the Lab

Podcast - Near Foundation: House of Stake and AI Governance

On the latest StablePod episode, we're joined by Lane Rettig, Head of Research at the Near Foundation. We discuss key lessons from NDC to House of Stake, what it means to have user-owned AI, how AI agents might help solve governance’s representation crisis, and the future of community-driven AI.

▶︎ 📺 Watch on YouTube
▶︎ 🎧 Listen on Spotify & Apple

Blog - Privacy was Always the True Alpha

In our latest blog post, we explore how privacy has become the defining competitive advantage in the Web3 landscape. The article examines how privacy-preserving technologies are reshaping everything from DeFi protocols to governance mechanisms, arguing that true decentralization requires robust privacy foundations to protect user autonomy and prevent surveillance capitalism from infiltrating Web3.

▶︎ READ the blog post

Blog - A Session on Incentive Engineering with Christian and Johannes

We're continuing our Interview Series—a collection of sessions with industry leaders sharing one big idea with our team. For Session 003, we dive deep into the art and science of incentive engineering with Christian and Johannes from our team. They explore how DAOs can design sustainable reward mechanisms that align stakeholder behavior with long-term protocol health, examining everything from token distribution strategies to participation incentives that actually work in practice.

▶︎ READ the blog post