🗳 This Week in Governance - Feb 1: Community, Collaboration, and Financial Frontiers

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

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Feb 01, 2024

Arbitrum's Governance Innovation: Exploring self-voting policies to balance autonomy with collective integrity, setting new standards in governance.
Treasure and Optimism's Community Alliance: A visionary partnership aiming to merge decentralized gaming with Ethereum's L2
Strategic Moves in Cosmos and Aave: Cosmos' ATOM Wars and Aave's 'Merit' initiative pave the way for strategic growth and enhanced protocol interoperability.
Financial Strategies by Frax and Euler: Frax contemplates a protocol fee while Euler updates its governance, showcasing innovative financial and support mechanisms.

Voting Activity (L7)
🗳️ 95,390 ballots
👥 41,716 voters
📜 296 proposals
🌐 82 active DAOs
Query more data using the Governance API

🗳️ Decision Dynamics: Pioneering Governance Models

DAOs continue to push the boundaries, experimenting with innovative models that redefine collective decision-making. This week, we've witnessed remarkable strides in governance that promise to shape the future of their communities.

In Arbitrum, there’s an active discussion about establishing a clear approach to self-voting within the DAO. The initiative addresses potential conflicts of interest and self-enrichment concerns. It proposes various options for implementing self-voting policies, such as applying individual and committee levels restrictions, especially in cases involving direct financial gain. The policy would require token holders to identify and disclose conflicts of interest, abstain from voting in certain situations, and consult the community when in doubt.

Thyborg has posted “The ATOM Wars” proposal in the Cosmos forum. Inspired by the Curve Wars on Ethereum, the proposal aims to enhance the Cosmos Hub's role in shared security and ATOM's role as Interchain Capital. It proposes a system where ATOM holders can lock their tokens to gain boosted decision-making power in allocating liquidity to third-party projects, thereby generating new revenue opportunities for the Cosmos Hub. This system introduces vATOM tokens, representing special voting rights. It outlines a competitive bidding process for projects seeking liquidity to prioritize consumer chains and improve Cosmos Hub's value proposition in the shared security landscape.

Meanwhile, SAFE is in the middle of a governance amendment sprint. This post outlines five key amendments to the governance processes based on insights from previous sprints. The changes include the introduction of partial delegation, a revised voting mechanism for OBRA (”Outcomes Based Resource Allocation”) initiatives to manage budget constraints effectively, adjustments to the voting timeline to match Snapshot settings, an extension of the soft launch into Season 2, and clarification for OBRA initiatives with implementation dependencies. The current OBRA initiatives tracker can be found here.

🤝 Community at the Core: Calls to Collaboration

The heart of any project lies within its community, a truth vividly reflected in this week's initiatives to foster deeper engagement and collaboration. These calls to action underscore the pivotal role of community members in steering the DAO towards its vision and objectives.

Head Chef Jared Grey has posted a “community call to action” in the Sushi forum. The call emphasizes establishing a formal DAO and operations framework to ensure long-term success, proposing minimal DAO involvement in daily operations but a significant focus on funding and strategic responsibilities, aiming to complete this framework by the end of Q2 2024.

In an exciting development, Ben Jones from Optimism proposes a game-changing alliance for Treasure to build its L2 chain using OP's tech, aiming to fuse decentralized gaming with Ethereum's growth. It's a strategic play towards a community-powered gaming revolution.

These initiatives are not just about building efficient systems or enhancing technological capabilities; they're about recognizing and harnessing the collective power of the community, whether it's through establishing formal frameworks or forging strategic alliances.

🌱 Expanding Horizons: Strategic Growth

This week's discussions and proposals reflect a concerted effort towards expanding individual DAO ecosystems and enhancing their ability to interact and collaborate within the broader blockchain landscape.

Aave is discussing “Merit,” a “Merkle-tree-based periodic airdrop to incentivize Aave-aligned behaviors” in the face of DeFi competitors. The community is also discussing creating the Aave Protocol Embassy, “a dedicated entity” that would represent the DAO in the governance of other protocols with significant voting power (like Arbitrum). The Aave Chan Initiative has put forward both proposals.

The Euler Foundation has posted an update on its contractual engagements, which include the hiring of a governance lead (alisha.eth) as well as a two-year engagement with Euler Labs “covering intellectual property, development, and services related to the products associated with the Euler Protocol.”

💰 Reimagining Resources: Financial Strategies

This week has highlighted several initiatives that underscore the ingenuity with which DAOs approach their financial and ecosystem support mechanisms.

Frax is talking about implementing a 10% protocol fee on Fraxlend, Frax’s lending platform, to match the practices of other protocols like Aave. There is currently no fee — because the focus has been on “growth and user acquisition.”

To Burn or Return? A proposal by members of BanklessHQ suggested either burning or returning their held BANK tokens to the BanklessDAO treasury, following up on their initial brand clarity proposal. Ryan Sean Adams, David Hoffman, and BanklessHQ collectively hold 183,930,000 BANK tokens, which they propose to either entirely burn or return to the DAO, retaining only 35,000 BANK each for active DAO membership. The forum poll resulted in 68% voting for the tokens to be returned to the treasury.

Finally, there is a proposal to sunset CityDAO, returning assets pro-rata to citizens — but this was met with the assertion that there is “positive momentum” with CityDAO projects, “not a collapse.” DAOs are setting new benchmarks for financial stewardship through these discussions and initiatives.

Looking to implement initiatives for your DAO? Work with the Boardroom Team

📜 Highlighted Proposals

✨ AI-Assisted Summaries ✨

dYdX: Foundation Fundraising Proposal

The dYdX Foundation is requesting $30M in DYDX tokens from the dYdX Chain community treasury to fund its operations for an additional 36 months, aiming to enhance governance, DAO enablement, technical integrations, adoption, marketing, and team development within the dYdX ecosystem. This proposal follows a previous funding initiative, adjusting the request due to technical advisability, and plans to maintain the current quorum threshold while lowering the proposal threshold to facilitate broader participation in governance. The foundation, a key contributor to the dYdX ecosystem, focuses on governance, business development, technical solutions, marketing, and core operations to support the ecosystem's growth and decentralization. The proposal is now onchain.

Builder DAO: Adjust Proposal Threshold

The proposal suggests reducing the number of tokens required to submit a proposal from 3 to 2 by adjusting the proposal threshold from 0.5% to 0.35% of the total token supply. This adjustment aims to accommodate the limited number of active holders, thereby fostering greater participation in the voting process. The change is intended to lower the barrier to proposal submissions and encourage more active involvement from the token holder community. Voting ends on February 5th.

Rocket Pool: Protocol Development and Funding

RPIP-37 proposes a structured approach to Rocket Pool's core protocol development and funding, allocating 5% of RPL inflation. If approved, it will formalize the process, roles, and responsibilities involved in protocol development and allocate a budget of 49,420.55 RPL for development expenses from October 26, 2023, to October 24, 2024. The proposal is designed to adapt and evolve based on community feedback to ensure Rocket Pool's long-term sustainability and innovation. Voting ends on February 12th.

Aave: Modify Retroactive Bug Bounties Proposal (Pre-Immunefi)

The Aave Chan Initiative proposes modifications to the Retroactive Bug Bounties proposal, which did not achieve a quorum in a previous vote, to authorize payments for bounties incurred before establishing the Aave and Immunefi bug bounty program. The proposal includes three unresolved bounties with recommended payouts and suggests three voting options to reflect community preferences on the forum better. This ARFC will lead to an on-chain governance proposal to distribute the designated funds to the identified addresses if approved. This proposal was largely driven by a debate involving a white hat who asked for a higher bounty for a previously discovered exploit. Voting ended on January 30th with 61% voting to “Payout bounty 1, 2 & 3 as originally presented by @bgdlabs.”