Flipside Governance Recap | 2 December 2022
Welcome to the Flipside Governance Team Recap! Here’s a weekly summary of heady governance activity, hard-hitting research & data analysis, sprinkled with key news from the broader governance space.
Team Highlights 🚨
- The Govy Show Episode #12 ft. ann_droo: Catch this week’s recording to hear Protocol Specialist at Coinbase Cloud @ann_droo jam with the team, drop knowledge about the future of liquid staked assets in DeFi, and much more!
- Flipside Governance Featured in Senate Labs Piece: Titled ‘Landscape of Professional Delegates: Next wave of DAO Governance’, Senate Labs review what top delegates in the DAO spaces are up to these days. We appreciate the shoutout 🙏 🙏
Our Research and Content ✏️
- Examining Exploits | Beanstalk, Build, and Better Governance: Quasimatt dissects the Beanstalk and Build Finance governance attacks to show how governance can be exploit-resistant as it becomes sufficiently decentralized. The prerequisite to building upon and securing any project (DAO or other) is learning lessons from the past —so click here to get learnin’.
Across the Industry: Governance News of the Week 📰
- BitDAO Reveals Modular Ethereum L2 Called Mantle: As the newest L2 scaling solution on the block, Mantle is making moves and even has the potential be the first network to implement EIP-3074, which gives externally owned accounts (e.g MetaMask) access to contract functionality. Mantle’s public testnet is scheduled to release in 2023.
- MakerDAO Votes to Increases DAI Savings Rate to 1%: The DSR is the interest rate users earn for depositing their DAI and helps the protocol maintain its USD peg. Higher DSR rates significantly increase Maker’s cost base, but may be more than compensated for by improved revenue generating capacity. See what we think below 👀
- Game7 DAO Unveils $100M Grant Program: Calling all builders 📣! Game7’s Grants Program aims to accelerate blockchain-enabled games by smoothing some of the technological bumps on the path to widespread adoption. Game7 are chain agnostic and are already supported by the @0xPolygon, @Immutable, @solana, & @arbitrum ecosystems.
Flipside Governance | Analysis of the Week 📊
Today we’re analyzing the Osmosis proposal #362 Osmosis Grants Program (OGP) Renewal.
Need a refresher?
The OGP is a multi-sig used to safeguard the community pool and fund enticing projects in the ecosystem for Osmosis to collaborate with.
Despite the OGP Renewal passing, Prop #362 was not smooth sailing. Let’s see how community contention was translated into voting activity with this dashboard created by Flipside community analyst, Kurama.
Right off the bat we can see in Figure 1 that the vote was unusual as the results are almost evenly split with 43.5% (≈67M OSMO) YES and 42.1% (≈62M OSMO) ABSTAIN. Only 11.6% (≈18M OSMO) voted NO.
Casting a vote to abstain is not the norm. How could it be? Nothing would get done. A significant number of votes to abstain warrants further digging because it implies voters did not feel comfortable taking a stand either way on the current submission.
This suggests that either the proposal has not been hashed out enough during the discussion period (i.e head back to the forum) or voters felt the pressure to avoid taking a public stand.
Figure 2 shows how many validators changed their vote per community pool spend proposal…and how many times. Community pool spend proposals only makeup 5% of all Osmosis proposals.
Prop #362 had its fair share of switcheroos.
17 validators changed their vote twice, 4 changed three times, and 4 changed four times. The logical guess here would be that these validators were switching from YES/NO to ABSTAIN and not the other way round.
The average amount of delegated OSMO is highest for the validators who voted 3 times at an average of 6.2M OSMO.
Osmosis Prop #362 raises questions around the purpose and effect of large swaths voting to abstain. While though the choice to abstain is perfectly legitimate, it nonetheless dilutes the electorate while at the same time, helping to reach quorum.
If abstaining indicates recusal, recusal should not contribute to quorum.
Validator vote switching suggests one of two things: indecisiveness or changing of mind (either alone or as a result of delegate influence). Flexibility in voting is a key component to the democratization of information. What good is access to new information if you cannot alter your decision as a result.
For more insights make sure you check out the complete dashboard here!
Flipside Governance Activity 📜
For more all-round governance content, be sure to follow us on Twitter or here on Medium. We’ll keep you updated.
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