Paradigm
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Paradigm

DAOs: ENS chooses Karpatkey as fund manager, Optimism introduces Grants Council for Season 3, Aragon presents BatRaVot, Cosmos rejects ATOM 2.0, Curve publishes whitepaper and code for stablecoin, Mango hacker fails to exploit Aave, Compound’s CIP-1 approved, and more!

Biweekly report on decentralized autonomous organizations vol.36, 11th November — 25th November

TL;DR

  • Aragon ZK team presented their research developing BatRaVot (Batched Ratified Voting), which is a new voting framework for off-chain voting with on-chain execution. Updating Aragon’s DEX Strategy proposal is under discussion
  • Aave freezes REN market because of its FTX exposure. Gauntlet <> Aave Renewal proposal failed. Strategy on sunset of Aave v1 proposal active. Furthermore, Mango hacker fails to exploit Aave.
  • In response to current market conditions, Maker governance executed several parameter changes. Furthermore, MakerDAO Governance voted to offboard the RENBTC-A vault type
  • Compound’s vote to adopt CIP-1 as the foundational process for Compound Improvement Proposals approved. Proposal 134 failed
  • Curve publishes whitepaper and code for stablecoin
  • GnosisDAO’s GIP-71 (Should GnosisDAO support hosted Blockscout explorer for Chiado testnet?) passed on Snapshot
  • Gitcoin expands governance participation to long-term partners
  • Balancer’s BIPs 108–110 passed, 111 &112 failed
  • Index Coop’s IIP 169: Purchase MVI from Metaportal proposal approved
  • PieDAO’s [Gate 1] Auxo Migration proposal passed. Treasury DOUGH burning proposal is live on the forum
  • IdleDAO’s [IIP-27] & [IIP-28] approved
  • The Nexus Mutual’s members pay 1.04M+ for Hodlnaut claims
  • Badger DAO’s BIP 99 approved
  • Synthetix SIPs for Perps V2 (279, 280, 281, 285) are being reviewed by the auditors. SIP-288 released, adding 1inch exchange contracts to the Direct Integration Manager
  • Uniswap’s [RFC] Community governance process changes. Uniswap Foundation Grants Wish List is out
  • Yam’s Redemption Proposal passed option 1: Open redemption forever only
  • Yearn’s Activate veYFI proposal is live on the forum
  • CFTC pushes back against amicus briefs in Ooki DAO lawsuit
  • Cosmos fails to pass ATOM2.0 Whitepaper
  • Optimism introduces a Grants Council for Season 3
  • Osmosis debates Grant Program renewal
  • ENS selects Karpatkey DAO to manage its endowment fund
  • Solana liquidity hub Serum forked after possible compromise in FTX hack
  • FWB: Update to FWB Mission, Vision, Strategy, and Principles proposal approved
  • Krause House: Core Team Funding proposal passed
  • SafeDAO has responded to the FTX collapse by voting against enabling transferability of SAFE
  • dYdX votes to launch an operations subDAO
  • Redacted votes to extend its DAO operations budget
  • BanklessDAO’s DAOStewards funding proposal
  • GMX <> Redacted partnership proposal
  • Polkadot Referendum 86 passed unanimously. Polkadot’s new governance system is live on Kusama
  • ApeCoin DAO launches community-driven NFT marketplace
  • Decentraland DAO considers pausing grants as FTX collapse spotlights diversification
  • Active proposals: Aave, Index Coop, MakerDAO, Synthetix, Uniswap
  • New & ongoing discussions: Balancer, GitcoinDAO, PieDAO, Compound, mStable, Yam Finance, Curve, Yearn Finance, Nexus Mutual, LidoDAO, BancorDAO, Akropolis, GnosisDAO, PoolTogether, API3, Idle, KyberDAO, Kleros, Badger DAO
  • 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

Deepdao.io

Like two weeks ago, the rating is headed by Uniswap and BitDAO.

Deepdao.io

Read & Listen

Listen

Frameworks

Aragon

There were no live votes these weeks.

Proposals

Updating Aragon’s DEX Strategy: Due to recent market conditions, it is relevant for Aragon to become more independent and increase the DEX liquidity position of ANT. Aragon should control its own liquidity, rather than relying on centralized liquidity providers.

  • The AA Finance team proposes to update the outdated Aragon DEX strategy by updating the current Balancer pools.
  • The objective of this proposal is to have at least 4% of ANT trading executed on DEXs.
  • The finance team seeks to test the hypothesis that increased liquidity will lead to increased use of DEXs that support Aragon’s vision.

Rules: technical deployment and legal wrappers: The default governance model is intentionally minimal to foster experimentation on the social layer and to give teams as much autonomy as possible to deliver impact.

  • Basics of submitting proposals, voting, and the veto option for security.
  • The charter will be a plain English translation of the technical deployment and legal wrappers, prioritizing technical accuracy and accessibility.
  • Legal wrappers still a work in progress
  • Add questions as a comment in the forum.

Other discussions

How to Install a Metamask Wallet on Aragon:

Colony

Builder’s Spotlight — PictureBookDAO — Episode 6 (Season Finale):

Moloch

Active proposals

Closed proposals

Discussions

Governance

Aave

Deepdao.io

Recent blog posts and news

Mango Hacker Fails to Exploit Aave: A short squeeze was attempted on Aave v2 this week by the same hacker who exploited Mango Markets. The attempted exploitation centered around a short squeeze of the CRV token. Fortunately for Aave, the hacker was unable to profit from the trade. Around the time of the exploit, Curve published their highly anticipated stablecoin whitepaper and codebase which caused the CRV token to rise rapidly ending their chances of a profit. However, there was fallout from the failed trade as a $1.6M USD bad debt position was created for the protocol. This meant that Aave had to find a way to pay back the accumulated debt as they were on the hook. On Tuesday afternoon, Gauntlet posted a risk parameter change proposal to immediately freeze 17 markets in wake of the attempted exploit. The rest of Aave’s service providers have also chimed in as the DAO mobilizes to unwind the bad debt and secure the protocol. Llama has stepped in with their own proposal to disable borrowing on only a select few markets. A separate proposal co-authored by Llama and Gauntlet was also published that provides a plan to repay the ~1.6M USD in bad debt accumulated during the failed exploit. In this proposal, Gauntlet will pay down the debt from its insolvency refund per their service agreement and the Aave Treasury will cover the rest. The Aave community currently finds itself debating exactly which markets pose the most risk as it searches for a long-term solution.

Boardroom.io

Strategy on sunset of Aave v1: This proposal seeks to gather community consensus on how to best sunset Aave v1. The DeFi lending protocol has been discussing how to sunset its previous edition called Aave v1, as newer versions (v2 & v3) have rendered it obsolete. Here, BGD Labs, author a proposal that offers three options on how to best proceed. Option 1 has them disabling and freezing the version. Option 2 has them disabling variable borrowing. And the final option is to do nothing and wait for everybody to exit with no entering. [99% voting ‘Freeze v1s (no supply/borrow)’/ discussion]

Gauntlet <> Aave Renewal: This proposal is to extend Gauntlet’s work at Aave for an additional 12 months. For the past two years, the risk management platform has worked closely with Aave and now looks to continue its relationship. In the proposal, the firm explains its focus will center on managing market risk and optimizing capital efficiency. This proposal would renew their current engagement with Aave until Dec 4th, 2023, and includes an estimated compensation package of ~$2.4M. Approval of this snapshot vote will be followed by an on-chain vote. [99% voting ‘YAE’/ discussion]

Active proposals

Closed proposals

New and ongoing discussions

Latest governance topics on governance forum.

Badger DAO

Deepdao.io
Boardroom.io

Closed proposals

New and ongoing discussions: Badger Discord

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

Badger: Give your organization its keys to Web3

Compound

Deepdao.io
Tally
Boardroom.io

CIP-1: Compound Improvement Proposal Adoption: This proposal looks to implement an Improvement Proposal Process to the Compound protocol. IP is a popular governance process used by various protocols to streamline and structure their governance. Compound Improvement Proposals describe standards, processes, and enhancements intended to improve the Compound Protocol. There are three types of CIPs: Meta Process, Protocol Enhancement, and Tooling & Support. The proposal illustrates the lifecycle and operating procedure to pass CIPs. [100% voting ‘Yes’/ discussion]

Active proposals

Closed proposals

New and ongoing discussions

Latest governance topics on governance forum.

Index Coop

Deepdao.io

Recent blog posts

IIP 169: Purchase MVI from Metaportal: This proposal is to ratify terms between Index Coop and Metaportal to change their existing fee split on MVI. The Metaverse Index is an index product at Index Coop designed to “capture the trend of entertainment, sports, and business shifting to place in virtual environments”. MVI launched back in April 2021 with a 60/40 split between Index and Metaportal. This proposal would pay MetaPortal 65K USDC and restructure the fee split to 100/0, effectively giving Index full ownership of the product. [100% voting ‘For’]

Boardroom.io

Active proposals

Closed proposals

Find latest Index Coop proposals here.

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

Kleros

Deepdao.io

Discussions

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

How to build in Web3 — Lesson 6 — Partnership Development:

MakerDAO

Weekly MIPs Update #114

Active Polls (13 Polls — ending Nov 28)

Executive

New and ongoing discussions

and many more!

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

Governance and Risk | Ep. 216:

Open Decentralized Voter Committee | Practical Implementation of Endgame Governance:

mStable

Deepdao.io
Boardroom.io

Closed proposals

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

Pie DAO

Deepdao.io
Boardroom.io

Closed proposals

New and ongoing discussions

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

Yearn Finance

Deepdao.io

Recent blog posts

Boardroom.io

There were no active proposals these weeks.

Discussions

Check out the latest YIPs discussions here.

MISC

  • ENS Chooses Karpatkey as its Endowment Manager: A controversial vote transpired this week at ENS DAO. The naming service community found itself in the middle of a highly contested vote over who would become its inaugural endowment fund manager. EP2.2.5 was the continuation of a previously passed proposal to source and name a manager to steward part of the protocols treasury. In the end, Karpatkey, the DeFi fund management platform, ultimately came out on top as the final hours saw the lead switch back and forth. A total of 3.1M votes were submitted with close to 1,500 ENS voters weighing in on the proposal. In this proposal, ranked-choice voting was implemented to help select a winner from the list of candidates. This style proved to be controversial as members of the community found the use of it complicated during such an important vote. Forum posts and tweets followed as voters posted their voting rationale and lobbied for their side. Even Coinbase, who seldom votes on proposals, found itself weighing in and utilizing all 240K ENS of its voting power to vote ‘None of the above’. The centralized exchange explained their vote was out of an abundance of caution. Voters of ‘None of the above’ mostly voted this way based on concerns about its overall risk exposure, the allocation size for the proposed endowment, and low confidence in the candidates. Next, the meta-gov stewards will work closely with Karpatkey to finalize a proposal to present to the DAO and formalize their relationship. Separately, the same working group is working on proposals that outline the day-to-day treasury operations for the DAO, ensuring there is a sufficient runway in stablecoins, and reducing general exposure to volatility.
  • dYdX Votes to Launch an Operations subDAO: On November 21st, the dYdX community successfully voted to approve the formation of a first-of-its-kind Operations subDAO. In the proposal, Reverie authors of the proposal outline launching a so-called ‘Ops Trust’ as a Guernsey Purpose Trust. This legal wrapper would encompass the newly formed subDAO and permit them to utilize and explore various legal options on behalf of dYdX. The Ops Trust will consist of three Trustees and one Enforcer and its focus will center around creating a dYdX DAO playbook, managing communication channels, and accessing traditional fiat payment structures for payments. Reverie Reserves LLC, Joanna Pope, and Callen Van Den Elst will be the three Trustees with George Beall as the lone Enforcer. The proposal outlines a compensation structure that lasts for six months as the project’s initial runway. The proposal requests $372K from the dYdX treasury to cover all costs and compensation over the course of the program with plans to revisit at the conclusion of six months. The next steps for the proposal include creating a multi-sig with the Trustees, drafting the Trust Agreement, and prepping the on-chain vote.
  • BanklessDAO: DAOStewards Funding Proposal: This proposal looks to fund the DAOstewards, a new metagovernance workstream at BanklessDAO, with 300K BANK for Season 6. Contributors at bDAO initially created the DAOstewards to consolidate the tokens during SafeDAO’s airdrop, but now seek to expand their function within the DAO. The proposal suggests two workstreams be created, ‘BanklessDAO governance’ and ‘Governing DAOspace’. DAOstewards are to focus on both internal-facing governance within bDAO and meta-governance work on the wider DAO ecosystem. A compensation structure of 100K BANK per stream with an additional 100K BANK paid out to each protocol lead starting with SafeDAO is being proposed. KPIs in the proposal include, ‘number of proposals on bDAO forum’ and ‘number of external proposal voted on’.
  • Friends with Benefits: Update to FWB Mission, Vision, Strategy, and Principles: This proposal looks to ratify and update the Friends with Benefits’ vision, mission, core principles, and strategic approaches to help unify the DAO. The proposal states their mission to be the following: “FWB is the social convening point for the individuals, squads, and institutions using decentralized technology to build a better internet. As a community, we aim to push culture forward while elevating and amplifying each other in the process.” Their core principles include collective effort, good neighbors, culture over crypto, open experimentation, civic engagement, give before you get, and have fun. A new FWB season will kick off following the approval and ratification of this vote. [99% voting ‘Approve proposed updated’]
  • Krause House: Core Team Funding: This proposal aims to renew the full-time team charter for community members Flex Chapman, Commodore, and Mario Lopes. Krause House currently retains these three members as their sole full-time contributors. The proposal seeks to ratify and extend their work for the next six months. In the proposal, compensation of 40K USDC and 10K KRAUSE is to be paid out monthly for the entire six months. Important to note that the contributors can be fired at any time via a governance proposal. The Krause House DAO treasury currently holds $1.3M with additional plans to narrow the criteria for projects funded, onboarding more full-time contributors, and diversifying the treasury. The proposal also provides a full retrospective of previous work done by the contributors and their biggest lessons. [70% voting ‘For’]
  • Selection of an ENS endowment fund manager: This proposal is a follow-up to EP2.2.4, a call to find a fund manager for the upcoming ENS endowment. Here, a shortlist of finalists is being voted on that includes Avantgarde, Karpatkey, and Llama. The ENS Meta-Governance stewards were tasked with sourcing a shortlist of suitable candidates from a larger batch of applications. The winner of this vote will work with the stewards to form a treasury allocation strategy with more proposals expected to follow. [discussion]
  • GMX <> Redacted partnership: This proposal looks to solidify a partnership between GMX and Redacted through a $200K OTC treasury swap. In the proposal, $200k GMX is to be exchanged for $200K of BTRFLY based on a 30-day trailing average of both tokens. Redacted will deposit their share of swapped tokens to bootstrap liquidity in the newly created pxGMX/ETH LP. GMX is to lock their swapped tokens for rlBTRFLY. Proposal RIP27 at Redacted previously approved GMX as the next protocol to be integrated at Pirex Protocol, a new product from Redacted that creates liquid wrappers to allow auto-compounding and the tokenization of future yield events.
  • Solana liquidity hub Serum to be forked after possible compromise in FTX hack: Following the fallout of FTX, a major Solana DeFi protocol was emergency forked to ensure its survival. On November 12th, Serum a central order book for liquidity providers on Solana was forked by members of its community to ensure the protocol did not go down alongside FTX. Serum relied on a ‘program update key’ for the development and maintenance of the protocol. These keys were not actually controlled by the SRM DAO, the community stewarding the protocol, but by a private key connected to FTX. As a result, a group of prominent community members and developers rushed to fork the DEX. Due to the nature of open-source protocols, the fork of Serum was able to be quickly deployed from the existing code base. Serum is notable for its importance within the Solana DeFi ecosystem as it acts as a liquidity backstop for a number of other protocols. This new forked version is now being managed by a muti-sig controlled by a team of “trusted developers”. Jupiter, Mango Markets, and other DeFi protocols on Solana have announced plans to integrate with the new version of Serum. It is now unclear what will happen with existing SRM tokenholders and its subsequent tokenomics since the fork was described as an emergency temporary fix.
  • Osmosis Votes on the Future of its Grants Program: The Osmosis community is currently voting on whether to continue its existing grants program. Originally launched in March 2022, the Osmosis Grants Program was set up to fund community-built tooling and infrastructure on Osmosis. Osmosis is a leading decentralized exchange built on the Cosmos Internet of Blockchains. Reverie, an active service provider helping DAOs grow, spearheaded the launch of the OGP as the Program Lead alongside community-sourced reviewers. Over the course of the program’s first six months of existence, it approved 43 projects and disbursed over $1.9M in total funding. On October 31st, Reverie posted to the Osmosis forums a proposal to renew the OGP with revised updates. Details of the proposal include a full 12-month engagement, compensation of 55K USDC per month & 25k OSMO per month, and the incubation of new subDAOs. The fallout from the grant program renewal proposal has been mixed with some community members requesting more transparency on the decision-making process and the team’s workload. On Tuesday, a disgruntled project that was denied a grant posted to Twitter a tweetstorm alleging misuse of the grants program. Competing proposals have also popped up that look to challenge Reverie on cost, scope, and structure. The terms of the agreement stipulate a governance vote will revisit the terms in six months with the ability to terminate the agreement at any time through a governance proposal. At the time of publication, the proposal is up for a vote and is currently being rejected. Voting ended on November 19th.
  • Cosmos Community Rejects ATOM 2.0 White Paper / Cosmos Fails to Pass Atom 2.0 Proposal: On November 14th, Proposal 82 failed to pass a community vote ultimately rejecting the proposed new vision for the Cosmos network. In the proposal, an updated white paper was introduced to help update and transition the platform into its next phase. Resistance and controversy followed the proposal from start to finish as multiple stakeholders weighed in. In the end, the contentious vote swung back and forth in the final hours but ultimately ended with a 37% ‘No With Veto’ vote signaling the failure of the proposal. Some of the arguments against the proposal include changes to the ATOM issuance and more generally the overall density of the proposal. Members of the Cosmos community have called for the dismantling of the proposal into many different proposals to better gauge the contents. The Cosmos community now looks to reconvene on possible next steps for the best path forward.
  • CFTC Pushes Back Against Amicus Briefs in Ooki DAO Lawsuit: Lawyers for the CFTC served notice of the lawsuit against the DAO via a website help bot and a forum post. The four amicus briefs say the CFTC wasn’t playing fair.
  • ApeCoin DAO Launches Community-Driven NFT Marketplace: The platform offers features built especially for the Bored Ape Yacht Club and Otherside communities, its CEO said.
  • Decentraland DAO Considers Pausing Grants as FTX Collapse Spotlights Diversification: The metaverse platform’s DAO community treasury holds over 99% of its assets in MANA, Decentraland’s native cryptocurrency.

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Main Sources

Projects’ blogs and forums

Research articles

Boardroom

Snapshot

Deepdao

Tally

That’s all for today! Your feedback is highly appreciated!👥

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Paradigm is an ecosystem that incorporates a venture fund, a research agency and an accelerator focused on crypto, DLT, neuroscience, space technologies, robotics, and biometrics — technologies that combined together will alter how we perceive reality.

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