Wintermute DeFi Governance Digest May 2023 | Week 2

This week’s proposals include Gauntlet’s proposal to work on the COMP incentive program, possible BitDAO rebranding to Mantle, Uniswap launch of the new governance platform and new delegation program; along with votes from LidoDAO to distribute fees from the SushiSwap exploit and formalization of stakers exits, the development of Hidden Hand v2 by Redacted, and the deployment of the crvUSD omnipool by Conic.

Proposals

Compound (COMP)

Proposal: Gauntlet <> Compound Incentive Optimization

Author: pauljlei

Summary: The proposal suggests formalizing Gauntlet’s work on the COMP incentive program. The engagement will last one year, and Gauntlet will charge a fixed and performance-based fee, all in COMP tokens.

Key Points:

• Managing incentive mechanisms is crucial for any DAO since, in the case of low incentives, the protocol can lose competitiveness. In the opposite case, it can be left without a treasury.
• Gauntlet has previously successfully provided incentive optimization services for Compound and other protocols.

• One of the most interesting features is the ability to suggest changing the interest rate curve instead of changing incentives.
• For one year of engagement, Gauntlet wants $300k in COMP, as well as 10% of the improvements on protocol revenue.

Our Take: While this proposal may be pricey, more than $18M in COMP rewards can be distributed more efficiently. Early on, some of the largest DeFi protocols (like dYdX) reduced incentives, allowing them to be used later.

BitDAO (BIT)

Proposal: [DISCUSSION] Optimization of Brand, Token, and Tokenomics

Author: cateatpeanut

Summary: The proposal aims to simplify the branding and structure of BitDAO to increase long-term token holder prosperity and success for core products like Mantle Network. The proposal also suggests simplifying tokenomics for a fresh start for the Mantle Network mainnet and token listings.

Key Points:

• An optimistic rollup called Mantle Network from BitDAO is quite difficult to associate with the DAO without knowing the context.
• Given the anticipated success of Mantle Network, it is proposed that BitDAO be rebranded to use the name of the core product.

• In turn, the token will also be converted to a new one in order to integrate possible Mantle use cases better.
• The current treasury and governance will simply migrate under the new brand without any changes.

Our Take: Products from DAOs designed to bring builders together are often in an in-between state as they don’t get the DAO branding and can rarely boost their own (like Tempus or Alchemist). In this case, we see a proposal to replace the branding not of the product but of the DAO itself since the product attracts a lot of attention.

Uniswap (UNI)

Proposal: Launch of Uniswap Agora & Delegate Race

Author: honn24x

Summary: Uniswap has launched Agora, a delegate portal to improve the governance experience. The Uniswap Foundation will organize its first-ever Uniswap Delegate Race to encourage new and existing delegates to create their platform page on Agora. Up to 8M UNI has been set aside by large UNI token holders for the campaign.

Key Points:

• As a result of one of the UF grants, the interface of the main voting portal was redesigned.
• To draw more attention to this event, it was decided to hold a Delegate Race, during which current and new delegates will create profiles in Agora.

• Timeline: The profile creation period until May 12th, and the delegation period until May 26th.

Our Take: Getting votes for delegates is quite challenging, especially for new members, potentially limiting participation in governance and pluralism. In the best case, it is possible to post a delegate profile on a protocol forum, but in this case, in order to delegate, a delegator must first examine all such profiles on the forum. At the moment, Optimism offers the best platform for delegates, but it seems that Uniswap may be setting a new bar.

Votes

Lido (LDO)

Proposal: A decision on an outflow of 39.8 ETH from the Lido DAO treasury to aid in the Sushi recovery

Status: Finished.

Created: May 4th, 2023.

Ends: May 11th, 2023.

Leading Consensus: No action — 23M LDO (67.14% of total votes).

Summary: On April 9, LidoDAO received 39.8 ETH, which was received as transaction fees from the Sushi exploit. Although the discussion about on whether a potential return of funds could be a precedent took place on the forum, this vote might also affect this decision.

Proposal: Lido on Ethereum Validator Exits Policy V1.0

Status: Finished.

Created: May 4th, 2023.

Ends: May 11th, 2023.

Leading Consensus: For — 55M LDO (100% of total votes).

Summary: Chappella is already behind, and although ETH withdrawals from the Beacon Chain are available, they are not yet implemented in Lido. Due to the presence of many staking providers, establishing a clear exit policy is required to ensure Lido’s security is not compromised.

Redacted (BTRFLY)

Proposal: RIP42: Build Hidden Hand v2

Status: Finished.

Created: May 4th, 2023.

Ends: May 6th, 2023.

Leading Consensus: Yes (build) — 7.6k (rl)BTRFLY (100% of total votes).

Summary: Bribing markets continue to be an important source of APY for protocols such as Curve or Balancer. The new version of Hidden Hand improves bribe control, increases the number of supported markets, and supports new chains.

Conic (CNC)

Proposal: [CIP] Add crvUSD Omnipool

Status: Finished.

Created: May 4th, 2023.

Ends: May 9th, 2023.

Leading Consensus: For — 1.3M vlCNC (100% of total votes).

Summary: Omnipools allow liquidity providers to add stablecoins to be diversified across multiple pools for greater security and profitability. crvUSD is nearly production-ready, and Conic is going to prepare an Omnipool for it in advance.