🗳 This Week in Governance - June 15

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

Jun 15, 2023

The Vision for Uniswap v4 is revealed
Court rules that Ooki DAO is a “person”
Gauntlet recommends freezing CRV on Aave V2
Gitcoin opens first citizens round

Voting Activity (L7)
🗳️ 307,580 ballots
👥 143,121 voters
📜 198 proposals
🌐 64 active DAOs

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🗞 News

The Vision for Uniswap v4 is Unveiled

Hayden Adams in a recent blog post described his vision for Uniswap v4, the next iteration of the protocol. Uniswap v4 introduces "hooks," customizable contracts that enable developers to modify various aspects of pool actions, such as swaps and fees, during a pool's lifecycle. This customization opens up opportunities for innovative features like time-weighted average market makers (TWAMM), dynamic fees, on-chain limit orders, and more. Uniswap v4 employs a singleton contract architecture, consolidating all pools into a single contract, resulting in significant gas savings and improved efficiency. The new version also incorporates a "flash accounting" system for more efficient asset transfers. The governance of Uniswap v4 will be community-driven, and the code will be released under a Business Source License 1.1, which restricts commercial use for four years before converting to a GPL license. The protocol fee mechanism will follow the model of Uniswap v3, allowing governance to vote on adding fees to pools.

Court Rules that Ooki DAO is a “Person”

On June 9, 2023, the CFTC announced a significant victory in the Ooki DAO litigation. U.S. District Judge William H. Orrick entered a default judgment order against the defendant, Ooki DAO, which had been accused by the CFTC of operating an illegal trading platform and unlawfully acting as a futures commission merchant. The court ordered the Ooki DAO to pay a civil monetary penalty of $643,542, imposed permanent trading and registration bans, and mandated the shutdown of the Ooki DAO's website and removal of its content from the Internet. This ruling established a precedent by defining the Ooki DAO as a "person" under the Commodity Exchange Act, holding it liable for the charged violations. The administrative order also held the founders responsible for the Ooki DAO's violations. CFTC Division of Enforcement Director Ian McGinley said: “The founders created the Ooki DAO with an evasive purpose, and with the explicit goal of operating an illegal trading platform without legal accountability.”

Polygon Presents 2.0

Polygon Labs on June 12th announced Polygon 2.0, which aims to further progress towards the goal of creating “Value Layer of the internet” by proposing upgrades to various aspects of the Polygon ecosystem, including protocol architecture, tokenomics, and governance. The Value Layer is envisioned as a fundamental protocol that enables decentralized finance, digital ownership, and new coordination mechanisms. Polygon 2.0 plans to achieve unlimited scalability and unified liquidity through a network of ZK-powered L2 chains, connected by a cross-chain coordination protocol. The rollout of Polygon 2.0 will involve detailed explanations of its components through blog posts, community interactions, and governance discussions within the Polygon ecosystem. The Polygon community will have the authority to accept and implement Polygon 2.0.

Gitcoin Opens First Citizens Round

Gitcoin’s Citizens Round aims to recognize and reward individuals and grassroots projects that have contributed to the success of the Gitcoin ecosystem. The Citizens Rounds will acknowledge work that directly contributes to Gitcoin's community engagement and essential intents, such as educational content, data analysis, and support-oriented initiatives. Round #1 is live from June 13 to June 27, uses Optimism to reduce transaction fees, and has 20K DAI set aside for matching via quadratic funding. This first round will focus on retroactive funding, rewarding projects that have made a significant impact in the past.

📚 Good Reads

Off the Clock: Governing in Nonlinear Time, by Nathan Schneider
Toward Equitable Ownership and Governance in the Digital Public Sphere, by Hubbard, Spelliscy, Schneider, and Vance-Law
The Three Transitions, by Vitalik Buterin
Dawn Vote, Tool for On-chain Democracy, from Dawn
Nouns Governance Pools, by TM0B1L and wiz
Ajna Finance: DeFi Without Oracles, by Juan Esquivel
Onchain Hypercultures: The Context-Fermentation Window, from LGHT
The Future of DAOs: Trends, Challenges, and Opportunities, from Cypherock

🧵 Threads

Some unpopular opinions, from nadir dabit
An overview of the other voting systems on Snapshot, from Snapshot Labs
Case against PoolTogether dismissed, from Leighton Cusack

🎧 Listens

Freedom Through Interoperability w/ Jimmy Chang, on On the Other Side
Why DAOs (and Crypto) Need a Policy Platform More Than Ever, with Nathan Schneider, on The Ownership Economy
AI DAO Simulator w. James Pollack, on Green Pill
brileigh & matthew @ juicebox, on DAO Talk
Citizens Round Kickoff, from Gitcoin
The Rise of Coordi-Nations (Phase 2 Has Begun), from the The Blockchain Socialist

💬 Forums

Aave: Gauntlet recommendation to freeze CRV and set CRV LTV → 0 on Aave v2

Gauntlet has conducted an assessment of the risk associated with a specific account that currently holds ~$67.7 million in stablecoins as debt against $185 million in CRV and $4 million in TUSD. While the account's current position does not pose an immediate risk to Aave v2, Gauntlet recommends freezing the CRV collateral and setting the Curve Loan-to-Value (LTV) ratio to 0. This is primarily to mitigate the potential concentration risk arising from the account's continuous accumulation of CRV collateral and its corresponding increase in borrowings, considering the significant decrease in CRV liquidity observed both on-chain and globally over the past few months.

dYdX: True “Autonomy” in DAOs

This post suggests addressing the challenge of maintaining autonomy in DAOs by shifting responsibilities from manual off-chain processes to elected councils within the DAO. These councils would handle tasks such as approving contributor applications, verifying completed work, and processing payments, bringing automation and transparency to the process. Additionally, the proposal explores the idea of leveraging AI to further enhance autonomy, with a specialized AI tool trained to act in the best interest of the protocol. While this AI-driven system offers potential benefits, challenges such as the reliance on a single AI and the need for multiple perspectives are acknowledged and discussed.

Goldfinch: Protocol Fee Change for New Pool

This proposal requests approval to adjust the protocol fee for the upcoming Cerchia borrower pool on Goldfinch from 10% to 7%. The reduction is necessary to accommodate an anchor investor committing $10 million to the pool, as larger investors often receive volume-based pricing discounts. While this change may set a precedent for lower fees, it will also attract new investor capital and introduce a new asset class of insurance-linked securities to the Goldfinch platform, benefiting all investors with the lower fee structure.

Hop: March/April/May 2023 HIP 4 Delegate Compensation Reporting

The post outlines the new formula to determine the incentives for delegates based on their lowest level of HOP delegation during a specific time period. The formula calculates the incentives (I) by multiplying the logarithm of the lowest HOP delegation level (h) by a constant factor (3500), which is then multiplied by a multiplier (M) based on consecutive participation periods. The multiplier (M) increases by 0.1 for each consecutive completed 6-month participation period, capped at a certain value. Delegates can use a Dune query to find their lowest HOP level and refer to a graph to determine their compensation based on the calculated values. Delegates report their expected compensation by posting in the thread.

Maker: Reflections on the First Quarterly Cycle of AVC Subcommittee Meetings

This post reflects on the progress of the first quarterly cycle of AVC Subcommittee Meetings and calls for stakeholders to contribute their perspectives. It highlights observations and suggestions for improvement in areas such as the use of agendas, setting goals, repositories for work files, consensus mechanisms, and summarizing meetings. The aim is to increase effectiveness, enhance collaboration, and ensure that valuable insights are shared and documented.

Mantle: Mantle LSD

This post introduces the idea of a liquid staking derivative for Mantle. It would offer ETH depositors tradable receipt tokens (mntETH) and aims to leverage synergies with the Mantle Network, including partnerships with node operators and DeFi applications. The proposal outlines advantages such as strategic ETH depositors, product synergies, operational efficiencies, and the use of Mantle Governance.

Soft: Accelerate Token Governance

To ensure effective governance within Soft DAO, the proposal suggests bundling key actions into a single on-chain vote to mitigate the cost of multiple votes. The proposed actions include retroactive $SOFT pay to Community Leaders/Ambassadors, sending USDT to Community Leaders & Ambassadors, one-time compensation to KomaRick and Kir.OS, adding voting power from distributors, changing the ownership of the Zealy $SOFT incentives distributor to the community multi-sig, and adding the latest incentives to the Crew3/Zealy $SOFT distributor.

📜 Proposals

Index: Launch Leveraged rETH Staking Yield ($icRETH)

The proposal suggests the launch of the Leveraged rETH Staking Yield (icRETH) token by the Index Coop. This token aims to provide enhanced staking yield on Rocket Pool ETH through a leveraged liquid staking strategy built on Aave v3. The target customers include on-chain retail users, whales, and applications/wallets run by on-chain native communities. The proposal also presents financial projections, revenue streams, fee splits, and product specifications, including risk parameters for rebalancing and on-chain liquidity analysis of underlying tokens.

⏰ Voting ends: June 15 ⚡Type: Snapshot ✍ Authors: allan.g, DevOnDeFi 💬 Read the discussion

Aave: [TEMP CHECK] GHO Liquidity Pools

This proposal presents the initial liquidity strategy for GHO, aimed at facilitating discussion within the community. The strategy involves primary and secondary liquidity pools, with the potential inclusion of some pools in the Aave Safety Module (SM) at a later stage. The strategy also considers sustainability, safety module considerations, and future considerations such as GHO supply cap and support from veBAL and vlAURA. This proposal is in the discussion stage and has yet to proceed to Snapshot.

dYdX: Launch the dYdX Operations subDAO V2

The dYdX Operations Trust (DOT) is requesting $6.6M in funding from the dYdX community treasury to support the operations of the Operations subDAO for the next 18 months (DOT 2.0). The funding will be used for various purposes, including hiring key personnel, deploying software, conducting audits, and covering operational costs. The proposal has received significant support from the community, and if approved, the funds will be transferred to the DOT multisig, and changes will be made to the composition of the trustees and the enforcer.

⏰ Voting ends: June 18 ⛓️ Type: Onchain ✍ Author: Joanna, Callen 💬 Read the discussion

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