🗳 This Week in Governance - May 11

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

May 11, 2023

Aragon Moves to Defend DAO Against Attack
Flipside Crypto Introduces Framework for Aave Recognized Delegates
GFX Labs Outlines Operationalizing Fee Switch for Uniswap

Voting Activity (L7)
🗳️ 311,236 ballots
👥 255,552 voters
📜 285 proposals
🌐 81 active DAOs

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🗞 News Brief

Aragon Moves to Defend DAO Against Attack

In response to a governance attack, the Aragon Association on May 9 announced that, acting “on its fiduciary duty to secure its treasury and mission,” it had “repurposed” the Aragon DAO as part of a new grants program. Initially this appeared to indicate that the DAO’s treasury — which is just beginning to receive assets from the Association’s more than $187m as part of a plan to decentralize — was going to be “repurposed” by the Association. Jessica Smith, head of communications and policy, followed up to clarify that “wANT Holders are in full control of the DAO” and that further transfers to the DAO treasury will continue as planned: “The AA remains committed to continue transferring the treasury to be governed by ANT Holders, if conditions are safe to do so," Smith said. Nevertheless, the Association’s “intentions” for further transfers are to support “administering a grants program for builders.” The Association wrote in a blog post (which was later edited for clarification) that “this will enable builders to kickstart their ideas faster on Aragon OSx and Aragon App.”

The Association’s sudden move was made in response to what the organization believes to have been a coordinated 51% attack carried out by a group called “Risk Free Value (RFV) Raiders,” who hoped to “extract value” from Aragon and its token, ANT. As noted in CoinDesk, the attack began last week during a contentious discussion about the Aragon treasury in Discord. “This group of actors has been complicit in breaking down many DAOs and their communities,” the Association writes, “including Invictus DAO, Fei Protocol, Rome DAO, and Temple DAO” — as well as Rook DAO. In the announcement as well as the blog post, the Association insists that ANT is a utility token not meant for financial gain but rather intended “to facilitate participation in Aragon’s technology, which exists to advance and protect Aragon’s stated mission.” Details on the new grants program are forthcoming.

Flipside Crypto Discusses Framework for Aave Recognized Delegates

Fig from Flipside Crypto has posted a proposal in the Aave forums that outlines a framework for recognized delegates in the DAO. The creation of the framework is motivated in part by the significant gas fees that large, active delegates (of which Aave has a healthy number) have to pay in order to participate in on-chain voting on behalf of their delegators, and nods to the wider discussion concerning delegate compensation. Earlier, at the beginning of April, the London Business School Blockchain Society had posted a proposal for the reimbursement of gas fees; this has passed a temp-check Snapshot vote. The framework posted by Flipside hopes to define the role and responsibilities of recognized delegates in addition to articulating the value they bring to the DAO. Among other things, delegates must put forward a platform, demonstrate a history of consistent participation in both discussions and voting, provide rationales for their voting history, and abide by the Delegate Code of Conduct (as recently outlined by Flipside in a separate post). “As Aave attracts more stakeholders, contributors, and delegates, it requires more active management and a clearer organization of the delegate base,” Fig writes.

GFX Labs Outlines Operationalizing Fee Switch for Uniswap

GFX Labs has kickstarted the Uniswap “fee switch” discussion again with a clear and detailed proposal to implement “a protocol fee equal to ⅕ of the pool fee across all Uniswap v3 pools [exceptions are noted] and turning on the fee switch for Uniswap v2,” beginning with the Uniswap v3 Polygon deployment. Arguing that “Uniswap is in a strong position to turn on protocol fees and prove that the protocol can generate significant revenues,” GFX Labs compares Uniswap’s maker/taker fees to those of other major exchanges, articulates the differences between v2 and v3 fees, projects expected income from the fee switch, maps out the development process, and surfaces tax and legal concerns (which can be addressed separately). The proposal makes clear that the discussion of how gains to the treasury should be managed post-fee switch can take place separately.

🎙️ News Update

The Delegate Podcast discusses the hottest governance updates curated from this newsletter. In 20 minutes, the episode covers major protocol activity:

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📚 Good Reads

stETH is the decentralized reserve currency for the sovereign internet, from adcv
Arbitrum co-founder sees DAO’s resolution to voter drama as a ‘testament to decentralization’, by Jacquelyn Melinek in TechCrunch
Powering the Future of DAOs with AI, by KAF
Building a Decentralized Ecosystem, Together, by Zain Bacchus of OP Labs
The Gold Standard of Decentralization, from Premia Finance
Economic Models for Tokenized Communiteis [gated], by Jihad Esmail
The Many Lives of a Nouns DAO Proposal, by Wilson
The Opportunities and Limitations of Nounish DAOs, by Chris Carella
Gitcoin Faces Accusations “power was abused” Over Diversity Grant Process, in DLNews

🧵 Threads

The broader an organization’s scope is, the greater the coordination cost, by pet3rpan
What makes a DAO sticky? from BanklessDAO

🎧 Listens

Ownership is a consumer experience w/ Jess Sloss + Josh Cornelius, on On the Other Side
Metacrisis Research with Chris Eddy, on GreenPill
Decentralized Knowledge Sharing w/Sari Azout, on Rehash

💬 Forums

Aave: Delegate Code of Conduct

This proposal aims to establish a Code of Conduct for delegates in Aave's governance and ecosystem, defining values and character expected from them and promoting professionalism and accountability.

Compound: Gauntlet <> Compound Incentive Optimization

This proposal aims to formalize and expand Gauntlet's work with Compound on continuous incentive optimization for Compound's incentive rewards. Gauntlet will provide a quantitative framework, utilize their Incentive Optimization Platform, and offer insights on COMP spend and allocation for each Compound market.

Decentraland: Formal Pathway for DAO Request for Information from the Foundation

This proposal introduces a formal pathway for the Decentraland DAO to issue a "request for information" (RFI) from the Decentraland Foundation, aiming to increase communication and collaboration between the entities, alleviate information asymmetry, and establish a cooperative institutional relationship.

Developer DAO: Amendments to DAO Governance Structure

This proposal aims to provide further clarity to the structures outlined in P-22 by addressing feedback and observations during the implementation process. It specifically focuses on clarifying the rules for Sub-DAOs regarding value return to the DAO, brand usage, and amendments to Sub-DAOs' operations and value return.

ENS: Proposal to Replace ENS14

The proposal suggests implementing referral campaigns to increase the distribution of voting rights in the ENS community and reward individuals and app makers who assist others in registering ENS names and potentially adding additional requirements such as avatar fields or hosting decentralized websites on the names.

Euler: End Current DAO Expenses While Protocol is Non-Operational

The proposal suggests reevaluating and potentially ending service agreements and commitments made before the hack, as they may no longer provide value during the rebuilding phase of Euler DAO.

Gitcoin: Who Makes the Decisions Anyway?

This proposal acknowledges the need for proactive thinking about the next phase of Gitcoin and the importance of defining decision-making processes within the DAO. Through investigations and iterations, the proposal introduces an approval matrix and DACI (Driver, Approver, Consulted, Informed) model to identify decision-making roles and clarify relationships between stakeholders.

Lido: Lido V2 Voting Announcement

Lido contributors present the upcoming Aragon vote for the Lido V2 upgrade, which includes successful testing on the Görli testnet, comprehensive audits, deployment of contracts on the mainnet, and proposed initial parameters for the upgrade.

KlimaDAO: Decentralization Working Group Interim Report

KIP-19 led to the establishment of KlimaDAO's Decentralization Working Group (DWG) in response to concerns about compromising decentralization principles in the DAO's governance. The DWG has released its initial report analyzing the DAO's current state of decentralization and providing recommendations for implementation.

Maker: Introducing Phoenix Labs

Phoenix Labs is a research and development company focused on integrating decentralized products into the Maker Ecosystem, aiming to accelerate Maker development time and bring innovative solutions. They emphasize value sharing, an open "Plug and Play" model, continuous innovation, and prioritizing DAI as the centerpiece for their products.

Optimism: OP Rewards Analytics Update

This proposal provides an update on the data and case studies for the monthly delegate call in May, aiming to share grant program performance and insights, and encourages the broader community to contribute to the open-source analytics repository, with a snapshot of program data taken on May 6, 2023.

Paladin: Allocating PAL to Incentivize Delegates

The proposal suggests allocating 100,000 PAL to delegate incentives, aiming to increase participation by rewarding delegates based on their representation and weight in the protocol, while setting eligibility criteria such as participation rate, transparency, minimum delegation, and membership in the Paladin Association.

PoolTogether: Hyperstructure GTM Discussion

The Hyperstructure roll-out in the PoolTogether protocol aims to target protocols, wallets, yield sources, blockchains, and developers with the goal of unlocking growth, offering no-loss exposure to yield opportunities, and driving wallet engagement.

Radicle: Wrapping up the Org Design WG

In the past year, the Org Design Workstream successfully achieved its goals of transitioning core development to "the DAO," establishing a new organizational framework, and funding committees for greater autonomy. The next phase of the transition, including distribution of influence and ownership, will be led by the DAO Governance Support Committee with the support of Marketing and Ops Committees.

📜 Highlighted Proposals

Moonwell: Aera Proposal for Moonwell Apollo

Gauntlet has proposed a pilot of its (relatively) new product Aera — an “autonomous treasury management protocol” — to the DAO of DeFi protocol Moonwell. An Aera vault for Moonwell would allow it “to capture gains in periods of market strength and protect losses during downturns.” More specifically, the author proposes a free pilot of Aera to run a portion of Moonwell’s Apollo reserve fund (~$1m). Moonwell Apollo is deployed on Kusama’s Moonriver network, while Moonwell Artemis is live on Polkadot’s Moonbeam.

⏰ Voting ends: May 11 ⚡Type: Snapshot ✍ Author: shaan (Gauntlet) 💬 Read the discussion

CityDAO: CityDAO Districts

While the original goal of CityDAO was to buy land in Wyoming, Scott Fitsimones here observes that more people are interested in buying land close to where they live. He proposes instead that seven “Districts” be “grouped by physical geography that represent smaller groups of Citizens and allow each group [to] purchase its own property,” which would then be administered by the Citizens of that District (as determined by a specialized census). The proposal asks for $1.5m, which would be evenly distributed between Districts.

💬 Read the discussion ✍ Author: Scott Fitsimones

SafeDAO: Safe Grants Program (SGP)

This proposal seeks approval for Wave 1 of the Safe Grants Program, which would be “run by SafeDAO, with funding and administrative support provided by the Safe Ecosystem Foundation (SEF).” As with most grant programs, this one hopes to encourage building and development on top of the protocol by attracting talent. The SEF has committed $1M for the year, split between two six-month waves (if approved by the DAO). A grants committee/council — the full composition of which has yet to be determined — will review and approve grants through a process that features transparency for the wider community.

⏰ Voting ended: May 11 ⚡Type: Snapshot 💬 Read the discussion ✍ Authors: MetaGuardian; OG post from netrunner.eth 🗳️ Outcome: 99.89% “Accept”

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