🗳 This Week in Governance - Jan 27
A weekly resource covering crypto governance, politics, and power.
📣 Key Points
Aave DAO votes to deploy V3 on Ethereum
Federation creates a way to bid on Nouns DAO votes
Lido plans for Shanghai upgrade and staked ETH withdrawals
Maker (y)earns and DAI gains
… and much more
Voting Activity (L7)
🗳️ 37,234 ballots
👥 20,146 voters
📜 217 proposals
🌐 65 active DAOs
Let’s get into it 🔥
🗞 News in Brief
The Aave DAO concluded an on-chain vote on January 25th to activate the Aave V3 Ethereum pool. V3’s functionality is much improved over V2, particularly in the area of risk management, offering features such as isolation mode and “risk admins.” First introduced in late 2021, Aave V3 has been deployed on several chains (Arbitrum, Optimism, and Polygon among them) for some time; but moving onto Ethereum itself was a much more complicated endeavor.
The DAO first debated whether to upgrade V2 Ethereum to V3, but decided instead to deploy a fresh instance of V3 Ethereum and urged its users to move capital to the new version (read our brief on the topic). The DAO then debated — and voted on — which assets should first be live on V3 Ethereum, and with what risk parameters. It was decided that WBTC, WETH, wstETH, USDC, DAI, LINK, and AAVE will be the first to be listed.
Maker grows and diversifies with Olympus, Yearn
On the heels of the controversial vote to continue Maker’s partnership with Gemini — which would see the DAO earn a 1.5% incentive on the GUSD in the DAI Price Stability Module (see our recent brief on the proposal), OlympusDAO approved $77M in DAI to be moved into Maker’s DAI Savings Rate strategy (DSR), earning the depositors 1%. Then, on January 23rd, MakerDAO ratified a proposal to “onboard $100M of PSM USDC into a bespoke non-custodial Yearn Vault,” potentially earning the DAO $2M per year.
Meanwhile, on the day the Gemini proposal closed Paxos proposed a very similar partnership to MakerDAO: to increase the amount of USDP in the PSM in exchange for monthly marketing fees (”the full USDP PSM would be able to generate up to $29M in annual revenue for MakerDAO”).
Federation creates a platform to bid on Nouns votes
Federation, whose aim is to “provide all communities in the Nouns ecosystem with the ability to coordinate efficiently around Nouns token utility,” this week launched a tool that allows users to bid on Nouns votes. Described as an experiment, the tool allows any Noun holder to put their Noun up for auction on any given active Nouns governance proposal. Bids are made in ETH, and can be designated “for,” “against,” and even “abstain”; the bidder can also provide a reason. While this mechanism can be described as putting votes for sale, it could also widen participation in Nouns governance.
Lido shares plan for staked withdrawals
One of the features of the Shanghai upgrade to Ethereum, set to be released in March or April of this year, is that it will allow ETH to be unstaked for the first time. Liquid staking protocol Lido has accrued a massive amount of staked ETH (stETH) — the largest share by a wide margin. While it isn’t known exactly how many users will want to un-stake their ETH or at what pace (it could turn out that more people will feel comfortable staking after Shanghai), Lido needs to prepare for a potentially wide range of significant protocol activity.
As Eugene Pshenichnyy says in his post introducing the Lido on Ethereum protocol team’s extensive design plans, “designing the withdrawal feature for the Lido liquid staking protocol is a complex task due to the difficulty of interfacing data between the Consensus and Execution Layers, as well as the async nature of the Consensus Layer validator exit and slashing mechanics.” The team is looking for community feedback in the forums, as the plans will eventually need to go before the DAO for a vote.
📚 Good Reads
The DAO Handbook, by Scott Fitsimones
“To DAO or not to DAO: Must all metaverses be decentralized?” by coolhorsegirl
“Outdated: Remarks before the Digital Assets at Duke Conference,” from Hester Peirce
“Ethnographic Research of Proof of Humanity DAO: Full Document of Findings” from BlockchainGov
“The future of DAOs is powered by artificial intelligence” by Samantha Marin
“Using the Graph to Power DAOs: Snapshot Case Study,” from The Graph Foundation
Pocket DAO: Exploring Proof-of-Participation Governance, by Joel Miyazawa and Traver Normandi
10 steps to build your DAO community, from Aragon
The Importance of Structure in DAO Governance, by Bobby Bola
Compound: Protocol Contribution Policy
ShapeShift: Handover of account ownership and administration to the DAO
Decentraland: Should the DAO assign voting power to content creators?
Paladin: Amending The Paladin Emergency Proposal (PEP) Process
ENS: Endowment Initiation
Euler: Increase Snapshot Quorum
The Art of Funding Public Goods, from chasedevens
If you're interested in DAOs and network states, by Balaji Srinivasan
The idea that ownership can be the basis of a new social graph is an extremely under-explored area in crypto, by Li Jin
DAOs are Reimagining the Social Landscape, by BanklessWriters
“Retroactive Public Goods Funding Round 2” with Optimism’s Bobby Dresser on The Green Pill
“Funding DAOs with Super Pacs,” a talk by Vaughn McKenzie-Landell
The Tokenized Community Thesis W/ Jihad Esmail, on On the Other Side
Virtual On-chain Option Plans and Early Stage Venture Approaches to Ownership, with Sascha Kellert and Jessica van Meir on The Ownership Economy
DAOs Are New Organizations, with guest Nathan Schneider on CoordiNative Species
Sell ETH into USDC
ENS delegate James posted for discussion on January 18 a proposal to sell 10,000 ETH for the equivalent in USDC — in order to “ensure that the ENS DAO has enough money to cover operating expenses” for the next two years or so. Protocol revenue is generated in ETH, and 100% of the spendable treasury is denominated in the asset. Maintaining such a high percentage in a single, volatile asset is risky, the proposer argues. 10k ETH is about a quarter of the treasury. If passed this proposal would sell ETH for USDC at a minimum bid of $1,300 per ETH over a twenty-four-hour period. There is some debate in the forum.
👥 Type: Forum Discussion
✍ Author: James
Should the GnosisDAO add delegation & spam reduction?
This proposal aims to introduce several improvements to GnosisDAO governance. First, in order to reduce “spam” proposals on Snapshot, a moderator would be designated to remove “low-quality” proposals. Also, proposals with “less than < 1,000 GNO of vote-weight cast
abstain [would be] filtered from the main view.” Second, the proposal seeks to improve delegation in the DAO. To begin with, the delegation UI in Snapshot would be able to show delegated vote-weight distribution. Additionally, delegates would be held to two-year term limits to avoid “stagnation”, delegates would be able to decline being delegated to (or set a cap on the amount), GNO holders would be able to delegate to multiple delegates, and delegation would allow for the “transitive” property (”if A delegates to B and B delegates to C, C inherits A’s vote weight”).
👥 Type: Forum Discussion
✍ Author: Auryn Macmillan
StarCB EEIMP Project
KlimaDAO has a mission of “rapidly scaling up the deployment of capital toward high-impact sustainability projects,” and has for several months planned to use a set amount of treasury funds to that effect. Klima’s Energy Efficiency and Impact carbon pool (EEIM) is designed to support small-scale, community-led energy efficiency projects — in order ultimately to meet its Sustainable Development Goals (SDGs).
StarCB proposes here to provide improved cookstoves for Rohingya refugees in Bangladesh, which in addition to operating more efficiently present a “massive improvement on the current reliance on traditional stoves or open wood fires, which damage respiratory health exacerbated by the confined space of the dwellings made of tarpaulin”. The cost of the offsets is 250k USDC. As the proposal states, “this effort strongly aligns with the coalition-building necessary to accelerate the on-chain carbon ecosystem’s development and showcase the collaborative potential of the ReFi space.”
✅ 93.54% voting ‘For’
⏰ Voting Ends: Jan 27th
⚡ Type: Snapshot Vote
💬 Read the discussion
✍ Author: Dionysus
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