This Week in DAOs - July 1, 2021
DeFi Education Fund Passes, AAVE + Snapshot, Wyoming DAO Law is Live, and Forefront Kicks Off Season 1
Another edition of This Week in DAOs featuring what you need to know about to stay up to date with DAOs PLUS a new section we’re debuting featuring DAO statistics from our Boardroom’s DAO Screener. Keep scrolling!
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Check out what we’ve published this week:
📊 This Week’s Stats
Source: Boardroom Screener
Ecosystem Overview - July 1, 2021:
💰 $6.62 billion in DAO treasuries 💰
🗳️ 131,780 ballots 🗳️
👥 38,939 voters 👥
✍️ 5,400 proposals ✍️
Governance Activity - Last 7 Days
🗳️ 4,807 ballots cast on 61 different proposals 🗳️
👥 2,770 unique voters 👥
🌐 22 projects with active voters 🌐
✍️ 40 new proposals created this week ✍️
Also, check out this cool data we pulled ranking the Ethereum ecosystem’s top governance voters:
📰 This Week’s News
The DeFi Education Fund & Uniswap Governance
Until further notice, this newsletter will no longer be discussing the DeFi Education Fund (as we have at length over the past few weeks) because the Uniswap governance proposal to establish it officially passed!
With a final count of 79,681,052 votes in favor to 15,040,585 against, the Uniswap community has agreed to fund a US-based 501(c)4, called the DeFi Education Fund, with 1 million UNI tokens to provide grants for political, educational, and legal engagement.
Check out last week’s newsletter for details about how the proposal changed over time.
However, while we may not be specifically talking about the DeFi Education Fund proposal anymore, it is worth noting how it fits into the broader conversation about Uniswap governance that has been taking place simultaneously.
Arguably the two most important parameters in the Uniswap governance design are: (1) the Proposal Submission Threshold, i.e. amount of UNI a participant must hold to submit a proposal for consideration via Temperature Check vote, and (2) the Proposal Quorum Threshold, i.e. the amount of UNI that must vote in favor of a proposal in its final stage for it to be officially passed and implemented.
On June 10th - during the deliberation process about what would become the DeFi Education Fund - Uniswap Proposal #4 officially passed, lowering the Proposal Submission Threshold from 10 million UNI to 2.5 million UNI. Harvard Law Blockchain and Fintech Club has over 10 million UNI delegated to them so they were able to start the Temperature Check process for what would become Uniswap Proposal #5 without “the help” of the parameter change.
As noted above, Uniswap Proposal #5 passed with almost double the amount of affirmative votes than required by the Proposal Quorum Threshold. (Indeed, there was enough votes from just four voters/delegates to reach the 40 million UNI threshold.) Similarly, Uniswap Proposal #4 passed with 90 million affirmative votes.
In response to this seemingly out-of-balance governance design, a new proposal from Penn Blockchain is making its way through Uniswap’s governance process to raise the Proposal Quorum Threshold. Penn Blockchain notes that there is nearly 183 million UNI currently delegated and argues that raising the threshold to somewhere around 60-70 million would “ensure that there is sufficient amounts of consensus before any proposal passes.” The proposal has passed the Temperature Check stage already, but it is unclear when it will proceed to the Consensus Check stage.
Thus, there is a chance that the DeFi Education Fund vote - which was the largest non-liquidity mining DAO treasury disbursement ever - may turn out to be the last Uniswap proposal passed with both the 10 million UNI Proposal Submission Threshold and the 40 million UNI Proposal Quorum Threshold.
Does that context make it any less legitimate? No, of course not - the rules are the rules and they were followed. However, it does add a bit more color to the DeFi Education Fund vote’s place in Uniswap’s specific governance history as well as that of DAO governance as a whole. As the entire ecosystem learns from each other in real-time, fully digesting context is paramount.
Wyoming DAO Law is Live
Today is July 1, 2021 so the Wyoming law that addresses the legal treatment of DAOs is officially live. As written about here in the Defiant by members of the Boardroom team:
SF38 addresses liability concerns around DAOs by applying a limited liability company (LLC) status to them… Limited liability companies act as a hybrid that marries the pass-through taxation of a partnership or sole proprietorship (i.e. they don’t pay corporate tax) with the limited liability of a corporation (i.e. when a business fails, personal assets of the owner of the organization are protected).
Amendments to the law from the Wyoming legislature are expected to be in the pipeline as they try to tailor it for its intended effect. But that hasn’t stopped some from taking advantage in the meantime:
For a deep dive into the “opportunities and challenges” of the legal treatment of DAOs, from an advisor to the Wyoming DAO law, check out Aaron Wright’s paper in the Stanford Journal of Blockchain Law and Policy:
AAVE Snapshot Voting
AAVE is adding a tool to its governance tool box with the rollout of a Snapshot space.
Controlled by the aave.eth ENS domain name (such that is controlled by AAVE governance), the Snapshot space will be used as support for AAVE on-chain governance rather than as a replacement.
Anybody in the AAVE ecosystem can take part in these Snapshot votes.
The announcement post in the AAVE forum hints at this tool playing a role in the asset listing process. But, any user with at least 1 AAVE worth of total voting power will be able to make a proposal so we will see what the community decides to use it for!
Forefront’s First Governance Proposal
Fresh off of hosting a DAO Summer Chat on Twitter Spaces yesterday (sadly, there was no recording but this link has recap notes), the social token-focused Forefront community is taking another step towards community ownership.
Two months ago, Forefront launched $FF and, since then, they’ve onboarded 1289 community members from various social token projects listed on Forefront.
As of Tuesday, those 1289 community members are getting put to work as Forefront’s first governance proposal for “FF Season 1“ was put forth in their forum.
Essentially, FF Season 1 can be understood as a 90 day period in which a series of community and product development goals are intended to be met.
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