🗳 This Week in Governance - Jan 12

A weekly resource covering Web3 governance, politics, and power.

📣 Key Points

• Compound Plans User Migration to V3

• Aave Votes on Initial V3 Parameters

• Uniswap Governance Votes to Update LM Program

• Olympus Proposes Strategic Acquisition of AURA

• … and much more

Voting Activity (L7)
🗳️ 33,827 ballots (+32%)
👥 14,228 voters (+14%)
📜 175 proposals (+5%)
🌐 56 active DAOs (-8%)

Let’s get into it 🔥

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🗞 DAO News in Brief

Compound Plans User Migration to v3

The Compound community is currently discussing plans to enable users to transition from the current V2 protocol to the newly improved V3 version. Compound V3 was launched in August of last year with a range of new and improved features and functionality to enhance the user experience. However, the differences between the two protocol versions make user migration a complex initiative. On Tuesday, the Gauntlet team published a forum post to encourage community discussions and align the community on a path forward. Included in the post are calls to define goals for the migration, strategic considerations, potential paths to encourage users to migrate, and the potential risks involved. As one of the leading risk management service providers at the DeFi protocol, Gauntlet is proactively encouraging deeper conversations as user migration poses unique risks to the protocol. Expect the community to debate these plans in the coming weeks.

Aave DAO Votes on Initial v3 Asset Parameters

Aave's risk service providers, Gauntlet and Chaos Labs, have been actively discussing their v3 initial asset recommendations ahead of the Mainnet launch. After weeks of discourse, a proposal to decide between the two recommendations is now up for a vote. Notable differences between the two proposals include loan-to-value (LTV) and liquidation threshold (LT) settings, the number of assets supported, and recommendations for isolation and e-mode features. In general, Chaos Labs' proposal is viewed as more cautious, with a trade-off in capital efficiency. Gauntlet's proposal is based on insights from simulations conducted on Aave v2 ETH and AVAX and offers more aggressive parameters to avoid disincentivizing borrowers. The Aave community must now consider both options and their various tradeoffs. Voting on the proposal is live on Snapshot until January 14th.

Uniswap Governance Votes to Update LM Program

This week, Uniswap is voting on parameter updates to its ongoing Optimism-Uniswap liquidity mining program. During Phase 0 of Optimism’s Governance Fund, the DEX received 1M OP tokens to drive growth to the L2. In October, Uniswap governance voted to structure a Liquidity Mining program into three phases with three initial incentivized asset pools, WETH/USDC, WETH/DAI, and USDC/DAI. The first phase of this LM program successfully ran for two weeks and distributed 50K OP. Now, Uniswap is voting on the details for Phase 2 which includes, adding an additional incentivized pool and adding a new liquidity mining partner. This new phase will look to distribute 100K OP over the course of three weeks. A future third and final phase will distribute 650K OP and run until all rewards have been depleted. At the time of publication, the community has signaled to add a wstETH-ETH pool and DeFiEdge as a new partner. Voting on this proposal concludes later today.

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📚 Good Reads

• “Usage-Based Governance w/ Sybil Resistance” by John Total Value Locke

• “DAO Governance in Euler’s DeFi Lending and Borrowing Protocol” from StableLab

• “Chaos Labs helps navigate DeFi volatility with an expanded Aave V2 risk partnership” from Chaos Labs

• “Progressive decentralization: a high-level framework” by Jad Esber and Scott Kominers

• “Regulate Web3 Apps, Not Protocols Part II: Framework for Regulating Web3 Apps” by Miles Jennings and Brian Quintez

• “Uniswap Monthly Financial Report - Dec 22” from Asymmetric Defi

• “2022 Radicle Governance Wrapped” by Shelby & Abbey

• “Governance Yield Farming” from Flipside

• “Protocol-first DAO Strategy” by 0xJustice

• “Zero to Governance” by w1nt3r.eth

• Euler Finance: “Formalise Governance Processes”

• Balancer DAO: “Closing Year 2 Funding”

• Balancer DAO: “Restructure Governance Process - Disband Governance Council”

• Bankless DAO: “S7 GC Election Application Submission”

• Uniswap: “Community Governance Process Update [Jan 2023]”

• Uniswap: “Cross-chain Deployment Guide”

• Gnosis DAO: “Introducing more accountability to the Gnosis DAO”

• BanklessDAO: “Governance Solution Engineer Program - Completion of Cohort 1”

• GMX: “Deployment of GMX in BNB Chain”

🧵 Threads

• “The latest trend in DAOs: Delegation” by Kohei

• “When looking at DAO proposals, some people mentally do the math of how much it would cost to hire contractors to do the job...” by zhayitong

• “What motivates a user to vote on cosmos proposals?” by web3_analyst

• “Advice from a full-time DAO contributor” by Kairon

🎧 Listens

• “Aave’s Past, Present, and Future w/ Stani Kulechov” on Reverie Podcast

• “Understanding DeFi Risk Management w/ Rei Chiang” on Pilled Podcast

• “Building Resilient DAO Treasuries with Aera” on Compound Labs

• “Aaron Wright on crypto: laws, labs and DAOs” on Law of Code

• “Introducing StarkNet Governance” from StarkWare

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📜 Proposals

Compound UAV v3 Upgrade

This proposal aims to improve the accuracy of prices on the Compound v2 protocol by upgrading the UniswapAnchoredView (UAV) Oracle. The current oracle, which is a custom implementation of a Chainlink price data feed, is used as the "source of truth" for prices within the lending protocol. The proposed upgrade will change the oracle to reference prices on Uniswap v3 pools instead of v2 pools. The reason for this change is that a large amount of liquidity has moved to Uniswap v3 markets, which will increase the reliability and security of the protocol by reducing the risk of price manipulation.

✅ 100% voting ‘For’
⏰ Voting Ends: Jan 15th
⛓ Type: On-chain Vote
💬 Read the discussion
✍ Author: gfxlabs

Aura Acquisition

This proposal aims to acquire $1M worth of AURA tokens. This acquisition is part of a larger strategic initiative at the Olympus protocol to drive its community deeper into the Balancer Wars by gaining governance power. The AURA tokens will be acquired over a 6-month period by the Olympus Treasury, with funding coming from the sale of Convex ecosystem rewards and unlocked CVX held by the DAO.

✅ 99% voting ‘For’
⏰ Voting Ends: Jan 13
⚡ Type: Snapshot Vote
💬 Read the discussion

House of Nouns Forks

This proposal requests 25 ETH from the Builder DAO treasury to develop a House of Nouns-like client for all Nounish DAOs created on the protocol. A two-person engineer team will work over the course of four weeks to deliver the following: view proposals across the entire nouniverse, all governance data served via API, and the ability to switch between any governance client. Like HON’s previous work, this will be developed into an open-source framework that provides custom governance and discussion experiences for all communities.

✅ 93% voting ‘For’
⏰ Voting Concluded
⛓ Type: On-chain Vote
✍ Author: jacob.eth

Stargate MM

This proposal looks to loan 8M STG tokens to a “suitable and qualified” market maker in order to ensure deep STG token liquidity across various centralized exchanges (Coinbase, Binance, etc). Loan details include a 24-month term with an option to buy at a strike price of $0.80 or more per STG. This amount of STG represents <1% of the total token supply, helping avoid the risk of centralization. The Stargate Foundation, the centralized entity stewarding the protocol, will facilitate the loan agreement should the proposal be approved.

✅ 51% voting ‘Yes’
⏰ Voting Concluded
⚡ Type: Snapshot Vote
💬 Read the discussion

Retro-Active Grant Jan 2023

This proposal aims to create a monthly grants program at Paladin in order to appropriately reward community contribution. Here, 250K PAL will be earmarked over the next four months to retroactively pay community members who have contributed significantly to the development of the DAO. Members were invited to nominate individuals in the forum post comments to be considered for this grant reward. The first wave of grants will reward community members ‘Kipit’ and ‘Dydymoon’ 8K PAL & 5K PAL, respectively.

✅ 100% voting ‘For’
⏰ Voting Ends: Jan 15th
⚡ Type: Snapshot Vote
💬 Read the discussion
✍ Author: Figue

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💭 Ecosystem Takes

Samantha Marin @samanthajmarin

Any organization with shared assets can be a DAO The possibilities are nearly as vast as the number of humans on this planet When you make this logical leap, you realize that there’s no other place in web3 more valuable to be in than DAOs

Tanisi Pooran @tanisi_pooran

me to anyone who will listen: here are all the ways DAOs are connected to the history of movement organizing

Jess 🌱 @thattallguy

Too much focus on governance, not enough focus on business.

Otterspace 🦦 @otterspace_xyz

Soulbound tokens are superior for governance in #DAOs because they cannot be traded or transferred, ensuring that voting power remains within the intended community. #NFTs, on the other hand, can be easily bought and sold, potentially leading to centralization of power.

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🎈 Have a Meme

0xJustice.lens 💜🦇🔊 @singularityhack

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