This Week in DAOs - November 11, 2021
Curve Finance's Emergency DAO, Paladin.vote Airdrop, ENS DAO Rollout, and Discord's Ethereum Tease
Keep scrolling to get caught up on this week in DAOs.
📊 This Week’s Stats
Governance Activity - Last 7 Days
🗳️ 5,268 ballots cast on 92 different proposals 🗳️
👥 3,319 unique voters 👥
🌐 33 DAOs with active voters 🌐
✍️ 64 new proposals created this week ✍️
📰 This Week’s News
Curve Finance Emergency DAO Action
A notable DAO governance story is currently developing in the land of Curve Finance, the increasingly systemically important DeFi protocol with the most “Total Value Locked” in all of DeFi according to DeFiLlama.
Mochi Inu - a brand new project which describes itself on Twitter as a “Next-Gen Decentralized Digital Currency Backed By Long-Tail Cryptoassets” - entered the so-called “Curve Wars” this week. See below:
Mochi’s token launch yesterday (November 10th) quickly attracted nearly $100m in liquidity, which enabled the project to mint a sizable amount (~$40m) of its native stablecoin, USDM. The project then converted USDM to DAI to purchase Convex tokens, which can be used to influence Curve governance and, by extension, the allocation of CRV rewards - thus accruing value to Mochi.
Curve community participants were quick to flag these actions - and Mochi’s founder Azeem Ahmed - as nefarious.
DEGΞNOMIX @degenomix$CVX god candle to $48 (from $28) thanks to 6 x 1000 $ETH market buys https://t.co/y5t8TeO2gX https://t.co/u20E7eUfQ8
And in a Curve Finance first, the Curve “Emergency DAO” turned off Mochi’s rewards.
There are two DAO governance angles to this story worth exploring.
The first: we are seeing the effects of the purposefully adversarial nature of Curve governance, which is designed such that there is a major incentive to accumulate (or bribe holders of) CRV tokens in order to use them to boost rewards for liquidity provided to Curve. This design is the basis of the so-called Curve Wars, i.e. protocols competing for shares of CRV emissions. Until the actions taken by the Emergency DAO, the “rules of engagement” have not been clear. Indeed, they’re actively being worked out in real time. See this CoinDesk article by Andrew Thurman and the Curve Market Cap newsletter for more insight on what’s happening.
Second, the actions of the “Emergency DAO” - and, in some ways, its mere exitstence - are sparking a debate around whether Curve is a fair, decentralized system.
Curve Finance @CurveFinanceEmergency DAO kills USDM gauge after discovering some suspicious hybrid + liquidity activity. The main DAO is still able to object and resurrect the gauge of course. Details: https://t.co/nzGMnzKfeQ
Technically, the actions of the Emergency DAO can be undone by the full Curve DAO, which is also currently weighing whether to remove the DAO whitelist.
Paladin.vote is a protocol that is bringing the vote-bribing properties of Curve Finance to other DeFi DAOs.
From their announcement blog:
Users deposit governance tokens or their utilized version in exchange for yield, while borrowers can leverage their voting power to gain more influence temporarily.
Votes in DeFi systems are unexplored assets, and markets are powerful tools for using said assets.
Observing very low and worrying turnouts in DeFi governance, we’ve built out a vote lending market that aligns the incentives of passive token holders, who don’t participate, with active contributors, who yearn for more access into dGov, in a manner that’s secure for depositors and the underlying governance systems: tokens never leave our contracts.
Paladin announced their airdrop and 1 million $PAL tokens will be set aside for holders of $AAVE, $COMP, $UNI, and $CRV who have voted or created governance proposals. This could have the effect of helping the practice of lending/borrowing voting rights more welcome in these major DAOs. Something to watch, for sure.
In the meantime, if you’ve participated in the governance of any of those major DAOs then head over to the Paladin DAO onboarding page:
ENS DAO Rollout
One notable aspect of the $ENS claiming process is the built-in delegation step, which prompts $ENS holders to delegate their tokens to a long list of eligible delegates.
Among those options is Coinbase, which is currently 2nd in delegated votes. Some in the community have expressed dissatisfaction with this result:
But smaller startups, individuals, and other DAOs are all poised to play a large role in the governance of this crucial public good as well.
There has also been discussion around whether ENS delegates, and delegates in general, should be paid for their services:
All in all, the ENS DAO rollout has been a fantastic example for other projects to follow in the future.
Discord Ethereum Integration?
The CEO of Discord made waves this week by teasing a native Ethereum integration in Discord.
Though he quickly walked it back (after a surprising amount of backlash from non-crypto communities!):
If this every happened, it would undoubtedly be a major unlock for DAOs, and crypto in general, as Discord is home to so many crypto communities and organizations. On the other hand, it would be a direct hit to projects like Collab.land that offer related functionality through bots. Maybe one day the era of !join will be a relic of the past…
For now, check out Boardroom’s Discord bot to embed governance data in your DAO’s server: