🗳 This Week in Governance - September 1
A weekly resource covering DAO news and governance
📣 What You Need to Know
Governance Activity This Week:
🗳️ 49k ballots (⬆ 310%) | 📜 156 proposals (🔻 5%) | 👥 12.3K voters (⬆ 34%) | 🌐 43 active DAOs (🔻 6%)
This week: The TribeDAO drama continues, protocol upgrades don’t go according to plan, MakerDAO prepares for changes, another DeFi protocol drops inflationary tokenomics, tools rebrand, and DAOs continue to raise.
Let’s get into it 👇
🎤📊 Breakdown: Flipside Crypto
Listen back to our conversation with Flipside’s governance team, an active delegate across major protocols in the space.
We discuss their governance values, using data to inform governance decisions, what’s next for Flipside, and much more:
🗞️ DAO News in Brief
Compound has a messy upgrade
Following the deployment of Compound III, a major code error was discovered in one of the protocol upgrades. This error disrupts users looking to borrow and lend cETH, the protocol’s second largest market. Compound Labs and the relevant emergency teams responded by drafting a new governance proposal to revert and update the code. The code was previously audited and missed by three different firms. Compound's current governance process includes a seven-day timelock before any proposed changes can occur. No funds look to be currently at risk.
TribeDAO Drama Continues
After the announcement of a TribeDAO wind-down, a new proposal from OlympusDAO has been posted to the forum that outlines a new route to repay Fuse debt and its hack victims. On Tuesday, the first part of Fei’s controversial proposal passed an on-chain vote. This vote specified which treasury assets would be liquidated to repay the victims. In addition, a number of protocols have submitted proposals to purchase their respective tokens back from TribeDAO.
The Tribal Council also initiated a clawback of the Rari team's vested tokens and returned them to the DAO. This new proposal from OlympusDAO ignores FEI’s initial plans and provides a route to make the hack victims whole. Importantly, OlympusDAO is one of the affected protocols in the Fuse hack. The proposal also calls for delegation as things begin to heat up at TribeDAO.
Pre-Season at Optimism
Optimism’s Token House has officially kicked off its pre-season voting cycle intended to prepare for Season 2. This voting cycle focuses on approving changes to the governance process. Governance Committees are being introduced for the new season to help streamline and specialize proposal oversight. A total of five governance committees are currently up for nomination. Committees include three DeFi committees, one tooling, and one NFT and gaming committee. Voting Cycle #5 runs now through September 7th.
Rune preps his proposals
Rune Christensen, the co-founder of Maker, has posted on the MakerDAO forums the necessary next steps to enact his Endgame Plan. The now infamous plan is Rune’s vision for a more resilient and self-sustained MakerDAO. The forum post articulates a more detailed, actionable plan with six “steps.” Each step in the plan comes in the form of MIPs (Maker Improvement Proposals). These proposals would slowly introduce the necessary changes needed to enact his plan. Some of the steps include the introduction of MetaDAOs, cleaning up MIPs and their voting period, swapping LDO for MKR, changing collateral onboarding, and more. These proposals will be submitted for inclusion in Maker’s October governance cycle.
On Friday, Rune also posted plans to make the DAI stablecoin a free-floating asset. This move contradicts the DAOs recent push into Real World Assets. Recent government sanctions and blacklists have resurfaced plans to remove the risk of government censorship. Rune argues that free-floating DAI away from its USD peg as well as limiting its RWA exposure provides Maker with more robust censorship resistance.
Synthetix Proposes a Token Cap
A governance proposal to cap the supply of SNX tokens to 300M was introduced by Synthetix co-founder Kain Warwick. In the proposal, Warwick details a plan to remove the protocol’s current inflationary token model. Warwick argues that Synthetix no longer requires this token model as fees from its products are producing meaningful yields. Inflationary tokenomics are commonly used by early DeFi protocols to help bootstrap their networks.
Gearbox Protocol Raises $4M
The DeFi leverage protocol has announced a fundraising round of $4M, led by investors at Placeholder, Zee Prime, GCR, and others. Back in July, a Snapshot vote was passed with 99% approval to fund the DAO through strategic partnerships. Funds from the raise will reside within the DAOs treasury and be deployed to build V2 of the protocol as well as to continue its DAO growth. The upgrade looks to introduce new levered assets and integrations.
📚 Good Reads
“Treasury Management: A Guide to Navigating Downturns” from a16z
“Minimum Viable Permissionless-ness” from SuperBenefitDAO
“How online communities are revolutionizing human coordination” by Donatus Schaumburg
“The Great Convergence: $GHO and the Story of the Five Old Kings” by Luca Prosperi
“Tokens of appreciating appreciation” by Joey DeBruin
“Marching Towards Ungovernance” from Reflexer Labs
“The Path of Compliance and the Path of Decentralization” by Rune Christensen
“Ideas for things worth building” by Vitalik Buterin at ETHMexico
“Maker Drama” a thread by Greg Di Prisco
“5 short descriptive takeaways on DAO governance” a thread by Monkey PhD
“Cream Whale vs Balancer DAO” a thread by eaglelex.eth
📜 Highlighted Proposals
🔴✨ Optimism: DeFi Committee [Group A]
This proposal introduces a DeFi governance committee for Season 2 at Optimism’s Token House. The proposed committee would consist of 5 delegates focused on covering, summarizing, and providing vote recommendations on DeFi-related proposals. Delegates in this committee include community members Katie Garcia as Lead, GFX Labs, Flipside Crypto, StableNode, and Linda Xie. Governance Committees are the latest experiment at Optimism introduced to offload the high number of proposals to specialized groups.
✅ 93.8% voting ‘For’
💬 Read the discussion
🐥🐥 FWB: Season 7 Operational Budget
This proposal outlines the operational budget for Season 7 at FWB. The budget includes a monthly spend of $331,536 for a season total of $1.6M. Monthly costs include $264k for recurring contributors, $28k for non-recurring contributors, $19k for operational spending, and $20k for marketing spending. The budget will fund Season 7 of operations from August through December 2022.
✅ 100% voting to ‘Approve Szn 7 Ops budget’
👻 Aave: V3 Retroactive Funding
This proposal seeks to retroactively reward Aave Companies for the development and deployment of Aave V3. Aave DAO would compensate Aave Companies with $15M for incurred work plus an additional $1.3M for audits performed. The Aave V3 upgrade introduced important new features to the protocol that made it more efficient, reduced risk, and improved user experience.
✅ 99.9% voting ‘For’
💬 Read the discussion
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