This Week in Governance - July 28
A weekly resource covering DAO news and governance
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📊 This Week’s Stats
A snapshot of DAO governance activity and global treasury changes.
Governance Activity - Last 7 Days:
🗳️ 58,620 ballots were cast on 165 different proposals 🗳️
👥 11,147 unique voters 👥
🌐 38 DAOs with active voters 🌐
✍️ 95 new proposals created ✍️
For a deeper dive into DAO governance data, browse our Governance API - 🚀 This above link can be used to make requests against the API and is an excellent way to start exploring our governance data!
🗞️ DAO News in Brief
A revised treasury diversification plan is up for a vote at Lido Finance. The protocol’s previous plan had them selling 10M LDO to Dragonfly Capital. The proposal failed to pass consensus with a strong 66% ‘No’ vote killing the plan. Now, a new plan has been drafted that tweaks the initial purchasing amount of tokens in half. Forum sentiment seems optimistic with a vote currently underway.
Audius governance attacked
The web3 music streaming platform was governance attacked over the weekend. The attacker successfully exploited a bug in the governance contracts and stole 18M AUDIO tokens from the treasury. The tokens were successfully dumped on Uniswap for 700 ether ($1M). The Audius team responded and successfully patched the bug before more damage occurred. The contract exploit had been ‘live’ for years without anyone noticing.
SushiSwap nominates a new Head Chef
The decentralized exchange has begun a temp check for the nomination of their next leader, Jonathan Howard. The compensation package outlined in the proposal sees the Head Chef earning $800k / year with numerous vesting token options and bonuses. The Sushi community had been searching for its next leader since the departure of 0xMaki in September. Howard was sourced and vetted carefully in a long process by leadership before being introduced as a candidate. There is discourse currently happening around the details of the compensation package with amendments likely to follow.
Aave kick-starts GHO
After almost 3 weeks of forum discussion, the GHO stablecoin looks to take its next step. A preliminary snapshot vote is currently live to initiate the development of the stablecoin. The proposal aims to receive community approval, whitelist Aave V2 Ethereum Market Maker as the first facilitator and kick off discussions around starting parameters.
📚 Good Reads & Listens
“The Problems of DAO Governance: A Survey” by Other Internet & Orca Protocol
Learnings from bicameralism for DAO Governance
“Governance Theory and Practice” by Doo Wan Nam @ EthCC Paris
“Social Rules for DAOs” by Alisha
“MakerDAO: The War Between Decentralization and Efficiency” by Kerman Kohli
“The Paradox of DAO Profitability” by Samantha Marin
Llama becomes Aave delegates
“Why the DAO must resist MBA thinking” by Shawn Grubb
Mirror: web3 wallet-based subscriptions
The first Ted Talk on DAOs
📝 Highlighted Proposals
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1) PoolTogether: Create Pilot “Prize Team”
ELI5: Optimize prize distribution through pilot team efforts.
PoolTogether is a “crypto-powered savings protocol” that distributes prizes to those who deposit funds within its various “pools”; the prizes are generated from the interest accrued in each pool, depending on its design. However, “little attention has been paid to creating, measuring, and optimizing how prizes are distributed.” And further: “the process of adjusting prize distributions has been complicated, requiring a full multi-day vote.” These problems have become more urgent, in part because PoolTogether has just gone live on Optimism and is distributing $OP rewards. This proposal suggests creating a pilot “prizes team” that will be empowered to optimize prizes and make quick, as-needed adjustments. During the two-month pilot, the team will conduct research and perform analyses with the longer-term goal of codifying a “prize distribution thesis,” “success metrics,” and a “growth framework” to support the protocol.
See the discussion
2) Aave: Risk-Off Framework for the Aave Protocol
ELI5: Decide how much to reduce the liquidation threshold for collateral assets.
A large, decentralized, non-custodial liquidity market protocol such as Aave must be able to survive (if not thrive) in both good and bad market conditions. This proposal – informed by Llama, BGD Labs, Gauntlet, Governance House, and others – suggests one answer to the question of “how to most effectively serve the protocol regarding the tradeoffs between value creation and protection.” This idea is to adjust “liquidation thresholds” (LT), and the tradeoffs are usefully outlined as follows:
“A lower max LT reduction will minimize the impact to borrowers but at the cost of reducing the rate at which risk can be taken off. This, in turn, limits the extent to which leverage can be increased during favorable conditions, making Aave less capital efficient and coming at the cost of borrow volume.
A higher max LT reduction will strengthen Aave’s ability to maximize capital efficiency under favorable market conditions but increase the potential for risk-off liquidations.”
The proposal presents the option for each collateral asset’s LT to be reduced by an absolute percentage of up to either 3%, 2%, or 1%. The higher the percentage reduction, the more quickly the collateral asset can be liquidated by the protocol to prevent further loss.
99.95% voted for 3%
See the discussion
3) Index Coop: Season 2 Network Budget Approvals
ELI5: A budget to make the organization leaner and stronger.
This budget proposal comes after significant changes at Index Coop, both in structure and in personnel, and intends to address concerns raised in an open letter several months ago regarding the purpose and sustainability of Index.
“we are adopting a leaner organizational structure whilst we navigate through challenging bear market conditions, hoping to come out the other side a stronger more successful business.”
The budget itself is $2,059,960 for a six-month period and reflects a reduction of almost 33% from Season 1 actuals. An exchange in the forums appears to reveal ongoing tensions within the organization even while the budget has broad support.
100% voting for
See the discussion
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