Flipside Governance Recap | 10 June 2022

Welcome to the Flipside Governance Team recap! Here’s a weekly summary of heady governance activity, hard-hitting content we published, and key news in the broader governance space.

Team Highlights 🚨

Flipside Governance continues to get involved in governance for new protocols. Ian won the New User of the Month badge for May on Friktion, a Solana-based portfolio management protocol, and on Jet Protocol, a Solana-based lending platform.

Research and Content ✏️

• How to DAO on Solana: Realms & Tribeca (6/9): Ian takes a deep dive into two open source protocols — Realms and Tribeca — that are helping users set up and participate in DAOs on Solana. Which protocol is right for you? Read to find out!
• To ve or not to ve (6/6): Raphael analyzes the pros and cons of the increasingly popular voted escrow token model. Lots of data-driven insights and goodies in this one!

Governance News for the Week 📰

• Optimism/Wintermute: Optimism granted 20M OP to Wintermute for liquidity provisioning services but sent the OP to a multisig address that Wintermute had not yet deployed on Optimism. An attacker deployed the multisig to L2 and claimed the funds. As of this morning, the Hacker showed a penchant for good humor, returning 17mm of the 20mm stolen funds — sending 1mm to Vitalik, 1mm to a personal address, and 1mm sold on the open market.
• ApeCoin DAO votes to stay on Ethereum: Despite YugaLabs suggestion that ApeCoin migrate to its own chain, 53.62% of ApeCoin token holders voted to remain on Ethereum.
• New leaked draft bill requires DAOs to be registered entities in the US: We have no way of knowing if this leaked bill will result in any formal legislation, so it should be taken with a grain of salt. Although it would cause growing pains in the short term, the requirement of registration may ultimately lead to tax benefits and clarity in the space.

Flipside Governance Activity 📜

The Flipside team had a few notable proposals underway, highlighted by Phase 0 of Optimism’s Governance Fund deployment. Here’s a recap of the proposals we voted on. To keep it simple, we only provide our reasoning for the most contentious votes.

MakerDAO

(1) Poll: Prioritization Sentiment — Technical Resource Deployment

• 📓 Description: A Priority Sentiment poll to determine where to deploy technical resources
• 👍 Flipside Vote: Compound D3M, Collateral Onboarding, Maker Teleport
• ❓ Rationale: Team split votes on this proposal, as a reflection of different priorities for technical resource deployment.

(2) Poll: Prioritization Sentiment — Collateral Class — June 6, 2022

• 📓 Description: A Priority Sentiment poll to determine asset types to prioritize onboarding as new collateral.
• 👍 Flipside Vote: Peg Stability Solutions, Real-World Assets Vaults
• ❓ Rationale: Team split votes on this proposal, with majority favoring Peg Stability Solutions due to current market conditions.

(3) Poll: [XSGD] Collateral Onboarding Application (MIP6)

• 📓 Description: This proposal will add XSGD as DAI collateral in Maker Vaults.
• 👎 Flipside Vote: No
• ❓ Rationale: While we view diversification from USD as a plausible way to offset currency risks, we can’t make a strong case for a Singapore Dollar-denominated stablecoin as collateral. Additionally, XSGD liquidity across DEXs is quite low. We would prefer Maker to diversify into non-crypto and non-stablecoin assets.

(4) Poll: [KREDIKA] MIP6 Application: Pilot Vault for a portfolio of bridging loans secured with UK-based properties

• 📓 Description: This proposal (initially) requests access to a £100m institutional vault to mint DAI against Kredika ERC-20 tokens issued on the Ethereum mainnet and representing a senior claim over a portfolio of bridging loans secured with full legal charges over UK-based properties with an average loan-to-value (LTV) of 75%.
• 😐 Flipside Vote: Abstain
• ❓ Rationale: The risk / reward tradeoff for exploring this option is not sufficiently defined at this point in time.

Optimism

(5) Poll: Governance Fund Phase 0 — Batch Vote

• 📓 Description: Batch vote proposal to deploy Phase 0 of the Governance Fund to projects that fulfilled submission guidelines.
• 👍 Flipside Vote: Yes
• ❓ Rationale: Get the funds out to these much-deserving projects!

(6) Poll: Governance Fund Phase 0 — 0x

• 📓 Description: Individual vote to deploy respective portion of Phase 0 of the Governance Fund to 0x, who has chosen to allocate 100% of the funds towards grants.
• 👍 Flipside Vote: Yes
• ❓ Rationale: We love public goods funding.

(7) Poll: Governance Fund Phase 0 — Uniswap

• 📓 Description: Individual vote to deploy respective portion of Phase 0 of the Governance Fund to Uniswap, who submitted after the deadline.
• 👎 Flipside Vote: No
• ❓ Rationale: We believe that there should not be a precedent of one-off expectations for projects who miss the deadline. We believe it is important for protocols to adhere to the parameters set forward by the DAO, regardless of size and reputation.

SushiSwap

(8) Poll: Gauntlet x Sushi Incentive Optimization

• 📓 Description: This proposal is to renew Gauntlet’s engagement with Sushi on dynamic incentive optimization to drive efficiency and growth for the upcoming 12-month period.
• 👍 Flipside Vote: Yes
• ❓ Rationale: Gauntlet has been largely successful improving incentive ROI and protocol utility over the past year. We are in favor of continuing to partner with Gauntlet to optimize incentives and are fans of the added variable performance fee to align incentives.

Jet Protocol

(9) Poll: Should $SOL be listed as a collateral type in Jet Protocol?

• 📓 Description: This proposal will determine if $SOL, which is an already listed asset, should be kept on a go forward basis.
• 👍 Flipside Vote: Yes
• ❓ Rationale: Regardless of volatility, it makes sense for the native token to be accepted as collateral.

Marinade

(10) Poll: This proposal will hand over liquidity mining planning to the Marinators via on-chain governance.

• 📓 Description: The liquidity mining plan for every 2 weeks is currently planned by the Chefs team. With Marinade governance online, there is an opportunity to decentralize this part of the DAO by transferring the power to allocate MNDE incentives to the MNDE owners.
• 👍 Flipside Vote: Yes
• ❓ Rationale: The Chefs at Marinade continue to empower token holders and promote decentralization through on-chain governance. Another step in the right direction!

Terra

(11) Poll: Upgrade Terra Classic To Re-enable IBC

• 📓 Description: This signaling proposal will set the course of a software upgrade that is needed on Terra Classic to re-enable IBC functionality to Osmosis and Juno.
• 👍 Flipside Vote: Yes
• ❓ Rationale: Gives hope for the Terra Classic chain, allowing it to embed with other networks and protocols in the IBC ecosystem — seems to enable greater functionality and speculation.

(12) Poll: Establish Emergency Allocation Distribution Method

• 📓 Description: This proposal outlines parameters to distribute emergency relief to teams and to empower them with runway to continue building on Terra 2.0.
• 👍 Flipside Vote: Yes
• ❓ Rationale: This proposal is in-line with the earmarked amounts in the Terra Ecosystem Revival Plan 2. Distribution logic is well thought out and fair for developers.