DAOs: DAOs lowering proposal thresholds, Optimism’s ‘optimistic approval’ process, Arbitrum’s Security Council improvement proposal, Gitcoin’s ‘long tail public goods funding’, Aave’s GHO cross-chain strategy, Nouns’ Artist Program proposal, DAO elections, and more!

Paradigm

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Paradigm

16 min readJan 26, 2024

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Biweekly report on decentralized autonomous organizations vol.45, 11th January — 26th January

TL;DR

Gitcoin, Uniswap, and Rarible play with lowering proposal thresholds, potentially turning governance into a wider open field
Optimism’s ‘optimistic approval’ process takes a real-life spin, blending trust with democracy in a governance test drive
Aave Labs posits a strategy for integrating GHO across multiple blockchain networks. [ARFC] Treasury Management — GSM Funding & RWA Strategy Preparations proposal approved
MakerDAO’s Spark Spell proposals aim to enhance operational efficiency, manage risk, and adapt to evolving market conditions within the Maker ecosystem. The RETH-A vault type is being offboarded from the Protocol
Gitcoin discusses the concept of “long tail public goods funding” in the crypto ecosystem, emphasizing how distributions of funding often follow a power law distribution. Proposal to lower GTC Voting Thresholds on and off-chain is live
Lido chose a team to develop wstETH bridge on BNB. The DAO is considering its “Ethereum node operator EL diversity improvement commitments.”
Gnosis introduces more accountability to the GnosisDAO. GIP-91 is live
Compound’s proposals 210–2013 passed
Uniswap discusses community governance process changes. Deployments Accountability Committee Competition completed. Getty Hill has shared ideas for “revitalization and growth” in Uniswap
Arbitrum’s Security Council improvement proposal suggests modifications to the structure of Arbitrum’s security council. Aribitrum is holding elections for its Procurement Committee
ShapeShift’s Decentralized Process for Hiring Workstream Leaders proposal introduces a formal 8-step process for hiring workstream leaders
Radworks’s RGP-20 Grants Org Proposal aims to allocate substantial funds from the Radworks Treasury to the Radworks Grant Program’s multi-signature wallet
Nouns’s Artist Program proposal outlines establishing an art program that funds approximately 100 artists to create and mint CC0 (Creative Commons Zero) artwork
ApeCoin’s Rules and Framework for Temperature Checks proposal outlines a framework for Ape Temperature Checks to poll the ApeCoin community on various topics
Decentraland passed proposal suggesting that all code created using DAO tools be open source
Bankless proposes brand clarity. BanklessDAO is holding elections for its Season 10 Grants Committee
RareDAO is holding its Council election
VitaDAO is picking up the discussion of the election of Working Group Stewards for 2024
A long-term strategy is being discussed for Cosmos Hub.
Paladin is discussing the renewal of its delegate incentive program
SEC settles with “purportedly decentralized” BarnBridge DAO
SuperRare votes to compensate Council members
Upcoming events on DAOs and Web3
Podcasts on DAOs
And more!

Overview

Blockchain technology is already radically transforming the financial system. However, properties such as trustlessness and immutability aren’t only useful in monetary applications. Another potential application is governance. Blockchains could enable entirely new types of organizations that can run autonomously without the need for coordination by a central entity.

“Instead of a hierarchical structure managed by a set of humans interacting in person and controlling property via the legal system, a decentralized organization involves a set of humans interacting with each other according to a protocol specified in code, and enforced on the blockchain.” — Vitalik Buterin

DAO stands for “decentralized autonomous organization” and can be described as an open-source blockchain protocol governed by a set of rules, created by its elected members, that automatically execute certain actions without the need for intermediaries.

In simple terms, a DAO is an organization that is governed by computer code and programs. As such, it has the ability to function autonomously, without the need for a central authority.

Like how DeFi is programmable money and how NFTs are programmable media, DAOs are programmable organizations of people.

DAOs Ecosystem Statistics

Top DAOs

The rating is headed by Arbitrum and Optimism.

Read & Listen

Read on DAOs

DAOs Must Confront Dark DAOs — Or Fall Under Their Shadow, from IC3
The Evolution of Decentralization: Manta Network’s Governance Model Introduction, from the Manta Network
The Future of Optimism Governance, from the Optimism Collective
Naturalisation Councils, from polynya
A new thesis for network incentives, from Tnorm
Governance is Dead, Long Live TOKENS, by Leighton
Crypto’s Three-Body Problem, by Shorin, Hart, and Lotti
Towards Decentralized Civic Infrastructure: Transforming Civics with Web3, by Calvin Po, Fang-Jui “Fang-Raye” Chang
Uniswap Protocol Fee Report, from Gauntlet
A bill of rights for us, onchain, by Rafa
Capital and Enclosure in Software Commons: Linux & Ethereum, by Trent
Without privacy, DAO governance fails, by Thomas Stuart
The Balancer Report: Powering up Governance with Snapshot, from Balancer Ballers
Out, Damned Spot! Out, I Say!: Statement on Omnibus Approval Order for List and Trade Bitcoin-Based Commodity-Based Trust Shares and Trust Units, from Hester Peirce

Listen

Decentralized Science | Brian Armstrong & Patrick Joyce, on Bankless
Dissecting Noble’s Revenue Share Prop, L2 Price Wars, and Fee Switch Economics | Analyst Round Table, on 0xResearch
Data Availability & Why It’s Important, on The Chopping Block
DAO News & Interview with Eliza, Joshua, and Tara from DAO Science, on Just DAO It!
Investing to Build the Ownership Economy in Web3, with David Pakman, Partner at CoinFund, on The Ownership Economy
Grants Report: Eugene + Mashal, on Green Pill
It’s Impact Season with Jonas, Carl, and Owocki, on Green Pill
Joseph @ Open Dollar, on DAO Talk
Unraveling the SEC Hack, Futarchy, and Twitter Trolls, on The Chopping Block

Governance

Onchain and Snapshot Votes

Aave

Treasury Management — GSM Funding & RWA Strategy Preparations: This proposal focuses on treasury management for the Aave ecosystem, particularly for the GHO Stability Module (GSM) and a $1M Real World Asset (RWA) strategy with Centrifuge. It outlines the need to allocate sufficient USDC and USDT on Ethereum v3 to support these initiatives. The proposal includes specific funding allocations for GSM and RWA, adjustments to existing reserve holdings, and the revocation of legacy allowances. It also details a plan to transfer assets to Ethereum and convert DAI to USDT to meet these funding requirements.

Aave Governance v3 is live: As of the execution of “Aave Governance V3 Activation Short,” Governance v3 is now live, marking a significant advancement in onchain governance systems for the Aave community. In this new version, voting power can be derived from three forms of AAVE: the token itself, stkAAVE, and AAVE deposited on Aave v3 Ethereum. While the delegation dynamics remain the same as in Governance v2, all delegations have been reset to zero with the activation of the new system. Voting and delegating can be done directly via governance smart contracts or through a user interface developed by BGD Labs, with resources available on GitHub and IPFS. Creating proposals is open to anyone directly on the smart contracts, and the system is designed to be cost-effective, with the Aave DAO covering voting costs in a pilot program.

Active proposals

[ARFC] Add PYUSD to Aave v3 Ethereum Market

Closed proposals

Discussions

Latest governance topics on governance forum.

Compound

Closed proposals

Discussions

Latest governance topics on governance forum.

Gitcoin

Gitcoin: Long tail public goods funding: This forum post discusses the concept of “long tail public goods funding” in the crypto ecosystem, emphasizing how distributions of funding often follow a power law distribution. It highlights the role of crypto-native democratic crowdfunding mechanisms, like quadratic funding, in providing money and visibility to promising projects on the long tail, which can then ascend to wider recognition and impact. The post uses Gitcoin’s evolution from a long-tail project to a short-tail public good as an example and advocates for funding the long tail as a discovery mechanism for future big projects, with tools like Gitcoin Grants Stack facilitating this process. Additionally, the post points out that both short tail and long tail public goods are complementary, each playing a crucial role in the ecosystem’s overall development.

Closed Proposals

Discussions

To read more about the different proposals and take part in the decision, check out the governance forum.

Gnosis

Gnosis: Introducing more accountability to the GnosisDAO: GnosisDAO, since its inception in 2020, has experienced rapid growth, leading to complexities in tracking and understanding the progress of submitted Governance Improvement Proposals (GIPs). To address this, the DAO plans to restructure the Gnosis Forum for better navigation and introduce a new design. Additionally, teams responsible for GIPs are required to provide regular updates on their progress using a specific template. Future improvements include a GIP dashboard for easy overview, updated GIP templates with milestone settings for larger projects, and exploring fund streaming for certain projects. The community is invited to give feedback on these steps and suggest additional measures to enhance transparency and tracking of GIPs from ideation to completion.

Active proposals

GIP-91: Should the GnosisDAO onboard into Centrifuge Prime?

Discussions

Find out the latest GnosisDAO proposals here.

Lido

Recent blog posts

Ethereum Node Operator EL Diversity Improvement Commitments

Node Operators using the Lido Protocol have been making efforts to improve Execution Layer (EL) client diversity since…

research.lido.fi

Closed proposals

TempCheck: choosing a team to develop wstETH bridge on BNB

Discussions

To read more about the different proposals and take part in the decision, check out the governance forum.

MakerDAO

Maker: Spark Spell Proposed Changes: Phoenix Labs proposes several changes to SparkLend on the Ethereum network, outlined in individual polls. These changes include activating the SparkLend Freezer Mom for faster emergency responses, replacing the DAI oracle with a fixed $1 rate, updating the wstETH oracle to a 1:1 peg with ETH, freezing the GNO market and setting its LTV to 0, activating a Lido Rewards Program with wstETH, and increasing the Spark D3M Max Debt Ceiling to 1.2 billion. The proposals aim to enhance operational efficiency, manage risk, and adapt to evolving market conditions within the Maker ecosystem.

Ended Polls

1 Poll — ended Jan 22

Ratification Poll for MIP Amendment Subproposal (MIP102c2-SP21) — January 8, 2024

3 Polls — ended Jan 18

Executive

SparkLend Changes, Compensation Distribution, Halting Legacy Streams, Offboarded Delegate Buffer Payments, and Update HVBank doc [executed]

Discussions

Read more about the different proposals and take part in the decision.

Uniswap

Getty Hill has shared ideas for “revitalization and growth”: He highlights the need to establish early dominance on new chains such as Monad, Linea, Scroll, Polygon zkEVM, Bera, Taiko, and others while also strengthening its position on existing ones. The proposed action plan includes developing a Uniswap v3 onboarding package, featuring $250k in UNI for liquidity incentives, partnering with protocols for reward program execution, and ensuring a Uniswap v3 frontend is available from day one.

Closed proposals

Discussions

To read more about the different proposals and take part in the decision, check out the governance forum.

Upcoming Events

Feb 6–7: DAO UTokyo
Feb 14–15: Africa Tech Summit, Nairobi
Feb 23-Mar 3: ETH Denver
Apr 3–5: NFT NYC
Apr 4–9: Hong Kong Web3 Festival
Apr 8–12: Paris Blockchain Week
Apr 15–16: Blockchain Life 2024, Dubai
Apr 20–21: Arts DAO Fest 2.0, Dubai
Apr 20–21: Blockchain Universe Summit, Dubai

MISC

New proposal thresholds

Optimism: Optimism’s Token House finished voting on a proposal that used “optimistic approval” for the Code of Conduct Council’s recent decisions: the Council’s decisions are “assumed to be approved unless 12% of the votable supply in the Token House votes to veto an enforcement action” — and if it does, the actions “will go to a full Token House vote.” In the end, 2.31% voted against it, but it wasn’t without commentary critical of the process.
Gitcoin: There’s a proposal to adjust Gitcoin’s proposal threshold from 1M GTC to 150K GTC, “making it easier for a wider range of stakeholders to actively participate in governance.” The original version of the proposal also aimed to lower the quorum threshold from 2.5M GTC to 1M GTC, but this was considered inadvisable due to technical constraints. Gitcoin is also voting on whether to use oSnap for treasury distributions — a tool that would “allow for automatic on-chain execution of token transfers and grant funding after successful Snapshot votes.”
Uniswap: Uniswap has a live proposal to lower the proposal threshold from 2.5M UNI to 1M UNI. The aim is to broaden the delegate base capable of submitting on-chain proposals and increase delegate engagement — ultimately decentralizing decision-making, it is hoped.
Rarible: Rarible’s RRC-18 proposes hiking the quorum from 10% to 15% of veRARI’s total supply to fortify the DAO against malicious proposals amidst growing participation and delegate power. This proactive step ensures a broader consensus is needed for decision-making, reflecting a maturing governance landscape that balances increased activity with protocol safety.

DAO Elections:

BanklessDAO is holding elections for its Season 10 Grants Committee.
RareDAO is holding its Council election.
Aribitrum is holding elections for its Procurement Committee.Arbitrum is also accepting applications for its Research & Development Collective, with elections in late February.
VitaDAO is again picking up the discussion of the election of Working Group Stewards for 2024.

Radworks: RGP-20 Grants Org Proposal 2024: The RGP-20 Grants Org Proposal 2024 aims to allocate substantial funds from the Radworks Treasury to the Radworks Grant Program’s multi-signature wallet. This allocation includes 250,000 USDC and 100,000 RAD tokens. The essence of the proposal is to execute two transfers, enhancing the financial capacity of the Radworks Grants Program. Details surrounding this proposal have been actively discussed within the Radworks community forums, and additional information about the Grants Program is accessible through their GitHub repository, which is also scheduled for mirroring on Radicle shortly.

Arbitrum: Security Council Improvement Proposal: The proposal suggests modifications to the structure of Arbitrum’s security council to maintain its “Stage 1” status as defined by L2BEAT, preventing a fallback to “Stage 0.” It identifies issues with the current multisig setup, notably the identical membership in both the higher and lower threshold multisigs and the inadequacy of the current two-day exit window. The proposal offers three solutions: removing the lower threshold multisig, increasing the lower threshold multisig to match the higher, or extending the exit window to seven days. This change aims to enhance the system’s security and align with updated requirements for maintaining a “Stage 1” designation. The implementation steps include a week of discussion and a Snapshot vote with multiple options, followed by an onchain vote if required, with no additional cost to the DAO.

ShapeShift: A Decentralized Process for Hiring Workstream Leaders: This proposal introduces a formal eight-step process for hiring workstream leaders at the ShapeShift DAO, designed to ensure transparency, democratic election, and community involvement. It includes steps such as forming an application review committee, defining job descriptions, conducting interviews, and organizing community AMA sessions for candidates. The process aims to allow the DAO community to make well-informed decisions about leadership roles, accommodating the privacy concerns of candidates while ensuring the community’s ability to participate in the selection process through voting.

Nouns: Artist Program: For Artists, by Artists: This proposal outlines establishing an art program that funds approximately 100 artists to create and mint CC0 (Creative Commons Zero) artwork for Nouns, with selected artists becoming voters for future grant rounds. The program includes small grants of 0.3 ETH for each artist, distributed across five Prop.House rounds, totaling 30 ETH. Additionally, the program plans to develop ArtistProgram.org to showcase the artwork and provide resources. The proposal emphasizes educating artists about CC0 and the public domain while requiring them to mint their artwork on an Ethereum-compatible blockchain. The overall budget for the program is 40 ETH, which includes operational costs for managing the program. Voting opens on January 26th.

Arbitrum: Experimental Delegates Incentive System: The proposal introduces a six-month Experimental Incentive System for 50 selected ArbitrumDAO delegates to enhance active participation in governance. A budget of 1,580,000 ARB is allocated, with incentives distributed based on a point system developed by Karma. Delegates are chosen based on specific criteria, including minimum voting power and historical participation rate. The system incorporates various activities like Snapshot and Tally Voting, requiring delegates to achieve a Total Participation score of at least 60% to qualify for incentives. SEED Latam oversees the program’s administration and will deliver periodic reports, while Karma provides automation and tracking support.

ApeCoin: Rules and Framework for Temperature Checks: This proposal outlines a framework for Ape Temperature Checks to poll the ApeCoin community on various topics. These temperature checks aim to understand community perspectives on ideas, benefiting the ApeCoin ecosystem by facilitating information gathering. The process is proposed to be conducted on the same platform as regular ApeCoin DAO voting (such as SnapShot) for consistency and ease of access, and it is noted that there will be no additional cost since this is an administrative measure. Voting ends on January 18th.

Decentraland: Should All Code Generated Using DAO Funds Be Open Source?: As the (short) proposal notes, only the grant categories of “Core Unit” and “Platform” require a grant recipient’s code to be open source. But perhaps all DAO-funded coding should be open source? Proposal successfully passed.

SEC settles with “purportedly decentralized” BarnBridge DAO: As reported by Coindesk and others, BarnBridge DAO and its founders agreed to pay $1.7 million to settle allegations by the Securities and Exchange Commission (SEC) for offering unregistered crypto securities to U.S. investors. The SEC’s action against BarnBridge, which it describes as being established as “a purportedly decentralized organization (‘DAO’),“ marks a significant move since DAOs typically don’t register as companies and often don’t view their products as securities needing SEC registration. This highlights the regulatory challenges faced by crypto startups and DAOs in navigating U.S. securities laws.

SuperRare: Proposal to Compensate DAO Council Members: This proposal by the SuperRare Labs team suggests options for compensating members of the RareDAO Governance Council to enhance engagement and quality of contribution. The proposal offers three compensation options: no compensation, $1,000 per month, or $2,500 per month, all paid in $RARE. The council, responsible for treasury management, protocol upgrades, and strategic direction, plays a crucial role in the DAO’s operation. The compensation, if implemented, will start following the council election in January 2024 and aims to attract high-quality community members, ensuring active participation. This change would draw from the DAO Treasury but is seen as sustainable due to the DAO’s significant $RARE balance. Voting concluded on December 25th with nearly 98% voting for $1k USD equivalent per month.

Bankless: Brand Clarity Between DAO and HQ: The post from Ryan Sean Adams (and co-authors) discusses a proposal to clarify the brand distinction between BanklessDAO and BanklessHQ. The proposal outlines steps to redefine the purposes of both entities, create a permissioned system for brand usage, establish a legal entity to hold intellectual property for the DAO, and implement simple rules for Bankless projects to promote brand clarity. The need for this proposal arose due to confusion and problems caused by the unclear relationship between BanklessDAO and BanklessHQ, as illustrated by negative backlash from a proposal submitted by BanklessDAO on the Arbitrum forum. The proposed steps aim to provide a clearer distinction between the two entities and ensure a more sustainable and coherent brand identity.