🗳 This Week in Governance - Aug 17

A weekly resource covering crypto governance, politics, and power.

Aug 17, 2023

Gitcoin announces collab with Shell, firestorm follows
Nouns cancels proposal to upgrade due to possible vulnerability
Safe issues whitepaper for Safe{Core} Protocol
Compound looks to renew its grant program
KlimaDAO hopes to advance its governance framework

Voting Activity (L7)
🗳️ 746,588 ballots
👥 115,789 voters
📜 322 proposals
🌐 78 active DAOs
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📰 News

Gitcoin announces collab with Shell, firestorm follows

Gitcoin has announced a year-long collaboration with Shell Global Solutions International BV to support the development of open-source climate solutions. This collaboration will include a donation from Shell to the Gitcoin matching fund for the next four Climate Solutions rounds in the Gitcoin Grants Program, and a hackathon in Q4 of this year focused on blockchain-related energy use cases. Predictably, the announcement has prompted a number of strong reactions, especially on Twitter.

Gitcoin co-founder Kevin Owocki shares his perspective in a long tweet that expresses personal disapproval of Shell's brand and doubts that many will opt into Shell's funding pool, considering Shell's contribution to the climate crisis and potential brand damage to Gitcoin. He suggests that Gitcoin should not actively promote Shell's involvement, and instead, Shell could participate in a less prominent way. Owocki also discusses the inherent challenges of serving diverse community values within Gitcoin's decentralized architecture, emphasizing the potential for subDAOs to allow different communities to fund projects that align with their values while maintaining a core, neutral protocol. He concludes by acknowledging Gitcoin's current growing pains but remains optimistic about its path toward meaningful decentralization and its mission to fund public goods projects. Scott Moore has also posted an idea for a Gitcoin Partnerships Council in the forums (see below).

Nouns cancels proposal to upgrade and allow forking due to possible vulnerability

As we observed last week, Nouns proposal 354, which put forward several upgrades including the ability to fork, was the subject of serious debate. The proposal was canceled, however, due to concerns that it would make the protocol vulnerable to attack, as noted by nounders in a tweet: ”Attacker gets 20%, doesn't fork / Votes against all proposals, buys more Nouns / Gets 40%+, forks 20%, uses remaining 20% to block proposals / Repeat.” A new, identical proposal has been put on-chain, with the proposer claiming that “this prop is a statement of resilience, a pledge that will not be broken or canceled.”

Safe issues whitepaper for Safe{Core} Protocol

Safe has introduced a whitepaper for the Safe{Core} Protocol, a modular and open-source initiative aimed at advancing the transition to smart accounts in the Ethereum ecosystem. The protocol is designed to address the challenges associated with the current user experience of externally owned accounts (EOAs), which are simple but have significant usability issues. The Safe{Core} Protocol seeks to establish a unified standard for smart accounts that is vendor agnostic and promotes interoperability and security. It aims to solve the "wicked problem" of transitioning to smart accounts by addressing fragmentation through standardized modules, avoiding vendor lock-in to maintain account portability, and introducing registries to enhance security. Safe is releasing this whitepaper as an open invitation for community feedback and collaboration to refine the protocol and contribute to its development.

🎙️ Rather Listen?

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📜 Proposals

Recently Closed

Gitcoin: Upgrade to Governor Bravo

Gitcoin has collaborated with ScopeLift to develop, test, and plan the implementation of new on-chain governance contracts for the Gitcoin DAO, built on Open Zeppelin contracts that introduce Governor Bravo functionality. These new contracts include a Flexible Voting extension, which has undergone two audits, and provides a permissionless interface for integration and experimentation through voting contracts, thereby enabling various new use cases such as layer 2 voting and shielded voting. Voting for this on-chain proposal closed on August 16 with nearly 100% in favor of the upgrade.

Silo: Swap 1m USDC to equivalent LUSD

This proposal aimed to swap one million USDC to the equivalent amount of LUSD (a decentralized ETH-backed stablecoin from Liquity). The proposed swap aims to reduce centralization risks and support decentralized stablecoin alternatives for the Silo dow. The Silo treasury holds $4.2 million in USDC, a centrally backed stablecoin. Voting ended on August 11th with nearly 100% voting in favor of the swap.

Ending Soon

Frax: [FIP-278] Acquire CRV with DAO treasury funds

The FIP proposes the purchase of CRV tokens using 1 million FRAX from the Frax DAO treasury in an effort to strengthen Frax's role in the DeFi space and enhance liquidity in various FRAX-related pairs. This acquisition opportunity has arisen due to a recent drop in CRV token price following an exploit within the Curve Finance ecosystem. The proposal recommends the OTC purchase of CRV tokens, which will subsequently be staked, with the intention of bolstering Frax's position within the Curve Finance ecosystem for anticipated growth. The voting period closes on August 17th.

Compound: CGP 2.0 Updates and Renewal

Questbook proposes to renew the Compound Grants Program (CGP) 2.0 with a budget of $970,000, equivalent to 17,436.7 COMP, spread across three domains for two quarters. The proposal includes a reorganization of funding domains based on past performance and feedback, with a significant portion allocated to the "Dapps and New Protocol Ideas" domain. The proposal also outlines the compensation structure for the grants committee members, who are responsible for sourcing, reviewing, and nurturing proposals, and specifies that unallocated funds will be returned to the treasury at the end of the two quarters. The proposal voting period ends on August 19th.

Upcoming

Aave: wGHO Aave V3 Onboarding

This proposal aims to onboard wGHO, an ERC-20 token wrapper of GHO, as a collateral-only asset in a newly created stablecoin mode within the Aave V3 Ethereum pool. The integration would allow wGHO to be used as collateral for borrowing stablecoins such as USDC, USDT, DAI, and LUSD, thereby facilitating arbitrage and leveraged positions in cases of under-peg GHO situations. The proposal outlines specific parameters for the integration, including a 77% Loan-to-Value (LTV) ratio for wGHO and a supply cap of 10 million. The proposal is designed to strengthen the market's ability to maintain the GHO peg, and if approved by governance, the user interface is invited to abstract the distinction between wGHO and GHO. The Snapshot voting period opens on August 17th.

📚 Reads

What Do I Think about Community Notes? by Vitalik Buterin
Dodging The Tyranny of Structurelessness in DAOs, by Rika Goldberg
Rollup Decentralization - Does it matter? by Shivanshu Maden
DAO Governance Is Not Like Sex, by Hiro Kennelly
Role-based governance, but we need to have a little more fun, from Forefront
The Journey to decentralization, from Justine (via Optimism)

🎧 Listens

Ross Campbell on ERC 1155 and Legal Engineering at Kali DAO + Nani, on Law of Code
Navigating Values Trade-offs w/ Kevin Owocki, on On the Other Side
Tim Beiko & Justin Drake: The Sci-fi Roadmap to Ethereum, on Bankless

💬 Forums

Aave: Further Decentralising the Aave Grants DAO

The proposal seeks to further decentralize the Aave Grants DAO (AGD) by introducing a community election process for the Grants Lead and Reviewers, aiming to enhance the AGD's accountability and transparency to the Aave Community. The proposal outlines a detailed electoral process, compensation plans for committee members, and suggests the adoption of Questbook, a decentralized grants orchestration tool, to improve transparency in the grant allocation process. Questbook would allow the Aave community to monitor fund allocations, increase accountability, and maintain applicant pseudonymity, with a proposed fee structure based on a percentage of grants disbursed, capped at a maximum amount. The proposal invites community members to participate in a poll to express their sentiments on these changes. Debate about the proposal has been vigorous.

Aztec: [Upgrade Proposal] - Balance of the Force

The proposal outlines a framework for upgrades to the Aztec network, aiming to balance social consensus with the ability to quickly resolve issues during the network's development phase. Initially, a Security Council, composed of eight technical experts elected by token holders, is introduced to oversee upgrades, with the power to veto malicious upgrades and approve timelock overrides for urgent situations. Infrastructure providers play a key role in determining whether an upgrade is implemented, based on community feedback and a default 1000 block timelock that allows users to withdraw funds if they disagree with an upgrade. The proposal envisions phasing out the Security Council three years after the network's launch, transitioning to a model where upgrades are determined by social consensus among network participants, similar to Ethereum's EIP process.

Compound: Compound v2 Deprecation Strategy

In an effort to deprecate the v2 market, Gauntlet has proposed a series of steps to ensure a smooth transition for users to the v3 market. These recommendations include decreasing the v3 utilization kink to 90%, increasing v3 Annual Interest Rate Slope High parameters, allocating v2 rewards to v3 Ethereum USDC suppliers, and increasing v2 stablecoin reserve factors. The goal of these changes is to ensure sufficient borrowable USDC exists in v3 for migrating v2 users and to limit poor user experience for v2 users. Gauntlet is inviting community feedback and has created a poll to gauge community preferences.

Cosmos: Request the ICF to add a new mandate

The post discusses the evolving role of the Cosmos Hub within the Interchain Foundation's vision to "fund, steward, and responsibly advance the Cosmos ecosystem." The author suggests that as the technological aspect of Cosmos reaches maturity, there should be a new mandate added: to "fund, steward, and responsibly advance the Atom Economic Zone." The author expresses concern that the Cosmos Hub, transitioning to an 'economic zone,' may be outclassed by other hubs or economic zones if it does not adapt to the emerging Application Era. The post calls for the Interchain Foundation to play a more significant role in financially supporting teams and chains that work on products synergistic with the Cosmos Hub and its connected chains, beyond the current level of funding, which the author views as unsatisfactory.

Gitcoin: Gitcoin Partnerships Council

In this post, Scott Moore expresses concern that Gitcoin, which started as a simple idea to help open-source developers get paid and has evolved into a global movement around community-first funding, is not effectively listening to key community members such as grantees, donors, and funders. The author proposes the creation of a partnerships council, composed of key opinion leaders in the Ethereum ecosystem, which would review and have the right to veto partners contributing to a Gitcoin-branded round, aiming to avoid backlash and engage an increasingly disenchanted base of supporters, while continuing to work towards building permissionless, open tooling. The discussion has been very active.

KlimaDAO: Progressing KlimaDAO's Governance Framework

KlimaDAO proposes a six-month governance trial to integrate Gitcoin Passports for Sybil Resistance and Snapshot’s Quadratic Voting feature, aiming to enhance stakeholder influence, engagement, and the resilience of the protocol. The proposal is motivated by the need to progress KlimaDAO's governance framework to ensure it is scalable, anti-fragile, fair, and transparent, thereby minimizing vulnerabilities and downside risks while maximizing the protocol's potential as a decentralized tool for environmental commodities markets. After the six-month trial, a vote will be conducted to either ratify or annul the integration, with the decision determining the future governance model of KlimaDAO.

Olympus: Towards a Fully Autonomous Olympus

Following the successful passing of TAP-28, the DAO proposes accelerating the automation of the Olympus protocol and making adjustments to its 2023 projects and current operations. This is aimed at facilitating the launch of Cooler Loans, a strategic initiative designed to protect network value and privatize the risk and reward associated with asset deployment activities. The proposal outlines a six-month path towards full protocol automation and autonomy, which includes the implementation of on-chain governance through a system named Parthenon. By the end of January 2024, the goal is for the protocol to require minimal human intervention, with governance functions activated when a certain threshold of total supply is deposited into the voting contract. The proposal also details the impact of these changes on various ongoing projects, categorizing them as Compatible, Incompatible, or Rescoped based on their alignment with the post-Cooler Loans vision for Olympus.

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