🗳 This Week in Governance - November 2: Bridges, Pitches, and Investments

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

Nov 02, 2023

LayerZero responds to pushback from Lido DAO on bridges
Coalition of service-providers pitches the Arbitrum DAO
Uniswap signals move to venture investment
Optimism seeks to ratify its Law of Chains

Voting Activity (L7)
🗳️ 91,623 ballots
👥 43,649 voters
📜 205 proposals
🌐 63 active DAOs
Query more data using the Governance API

Let’s get into it 🔥

📰 News

LayerZero responds to pushback from Lido DAO on bridges

LayerZero has enabled the bridging of wstETH as a native token between Ethereum, Avalanche, and BNB — but not to Scroll (an L2), as initially planned, due to significant pushback from the DAO. As their revised post states, the intention of the implementation is that it “will provide users with a seamless experience for bridging between these chains, including horizontal composability across L2s, prevent the fragmentation of wstETH, and grant full ownership of all relevant contracts to the Lido DAO.” Some respondents objected that the implementation was presented as a fait accompli, and without DAO approval. The revised implementation respects the DAO’s preference — expressed during a lengthy discussion on the forum — for native bridges on L2s. As one commenter pointed out, the back-and-forth had echoes of Uniswap’s “bridge battle.”

Coalition pitches the Arbitrum DAO

A proposal seeks to fund the Arbitrum Coalition — which is to consist of Blockworks Research, Gauntlet, and Trail of Bits — to assist the Arbitrum DAO in turning community ideas into reality. The Coalition aims to streamline research, coordination, design, and risk assessment for DAO proposals and help delegates make informed decisions. Various services, including proposal reviews, code security assessments, quantitative analysis, and risk monitoring, would be provided. Costs for this proposal, which is essentially a collaborative service provider pitch, are estimated at approximately 2.2 million ARB over one year, with payments allocated to the individual members of the Coalition. L2BEAT would oversee the Coalition's activities. Discussion of the proposal is vigorous.

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📜 Proposals

Recently Closed

Uniswap: Invest in Ekubo Protocol

The proposal suggests a partnership between Ekubo Protocol and the Uniswap DAO. Ekubo Protocol is an AMM on Starknet, offering super-concentrated liquidity and support for extensions. Ekubo proposes a $12 million contribution in UNI in exchange for a 20% share of a future Ekubo protocol governance token, making the Uniswap DAO a significant stakeholder in Ekubo. This alignment aims to enable collaboration between Uniswap and Ekubo, contributing to the decentralization of protocol development. The temp-check passed on October 27th with 64% voting in favor of the investment. This Blockworks article provides useful context on what it characterizes as a venture investment by the DAO.

Ending Soon

Arbitrum: Activate ARB Staking

The proposal suggests creating a staking mechanism for the Arbitrum token (ARB) and requesting 1.75%, 1.5%, 1.25%, or 1% of the total ARB supply from the Arbitrum DAO treasury to distribute over 12 months through this mechanism. This staking experiment aims to increase ARB's utility and incentivize long-term holders. The “Arbitrum Coalition” (see news item above) is suggested to monitor and audit the staking mechanism. The proposal addresses the legal aspect of revenue sharing and the implications of a staking model for the Arbitrum ecosystem. It also outlines possible APRs for stakers and a penalty system. The offchain vote ends on November 6th.

Upcoming

Nouns: The Noun Pulse: Meme Analysis Database and Analytics

This proposal outlines the creation of a dedicated website to track activity metrics related to the Nouns ecosystem. It will combine onchain data from the Nouns Subgraph, data from social media channels like Farcaster and Instagram, and a limited set of metrics, such as proposal submissions, votes, comments, posts, and engagement. The project aims to provide clarity on Noun activity and serve as a data-driven culture for Nouns' community members and builders. The initiative will be executed in iterative phases, with a focus on community feedback and open-source development. A team of two individuals will be funded with approximately 22.5 ETH for this 10-week project. The proposal aligns with the vision of tracking memes instead of people in the Nouns ecosystem. Voting opens on November 3rd.

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📚 Reads

Different Types of Layer 2s, by Vitalik Buterin
Making Companies First Class Citizens of the Internet Economy, by Internet Native Company
Gov Month Report for Arbitrum DAO, by Plurality Labs
Optimism - A Holistic Research Report, from Redacted Research
Temporal Governance: Pioneering Cross-Chain Protocol Governance, from Moonwell

🎧 Listens

Nic Carter on Hamas’ Crypto Funding, SBF’s Courtroom Collapse, and Dramas Involving Lido and dYdX, on The Chopping Block
How Crypto Saves the Internet | Li Jin & Eugene Wei, on Bankless
Sparking MakerDAO’s Next Evolution w/ Nadia Alvarez & Sam MacPherson (Phoenix Labs), on StablePod

💬 Forums

Bankless DAO: Changes to the S10 Seasonal Funding Process

For Season 10 funding, the Grants Committee is making several changes based on a recent temp check. These changes include allowing only Level 1 contributors and above to submit grant requests, excluding projects from seasonal funding (they will follow the regular grant process), providing guilds with a fixed grant and the option for additional funding through token-weighted Snapshot votes, and requiring departments to include a purpose statement and Key Performance Indicators (KPIs) in their grant requests. These changes aim to streamline the grant process and ensure alignment with the DAO's goals.

dYdX: Governance Improvement Grants

The post author here initiates a series of Requests for Comment with the goal of crowdsourcing grant and RFP ideas and increasing community involvement in dYdX's decentralized governance. They identify that dYdX governance is evolving, aiming for more decentralization, while also highlighting challenges such as low participation and information asymmetry. The post encourages discussion on potential grants to improve governance, addressing topics like delegated governance, decentralization, standards, education, and community-building tools, seeking input and feedback from the dYdX community.

Optimism: Ratification: Law of Chains

The post discusses the ratification of the Law of Chains, a crucial governing document for the Optimism Collective. The Law of Chains serves as a foundation for governing processes in the Superchain, including the introduction of an Allowlist for acceptable sequencers and the evaluation of protocol upgrades to ensure they uphold the Law of Chains. If ratified, it will become an addendum to the Working Constitution, with implementation procedures added to the Operating Manual, requiring a 51% approval threshold from the Token House when it goes up for a vote.

SushiSwap: Sushi Swap Governance overhaul

The proposal suggests discontinuing Kanpai 2.0 and reverting to the previous model where 100% of fees go to xSUSHI stakers, transitioning to an interim governance solution using direct democracy voting, and electing a new governing council with specific responsibilities to draft a decentralized constitution, manage expenses and treasury, publish a roadmap for new tokenomic models, and facilitate governance decisions. This shift is driven by concerns about SushiSwap's performance, limited governance, and the desire to empower token holders and improve market share.

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