Wintermute DeFi Governance Digest — November 2023 | Week 3
This week’s proposals include OlympusDAO incentivizing decentralized front ends, Rarible incentivizing a delegation program to improve voting turnout, and dYdX activating trading on the dYdX Chain; along with votes from Aave to increase the GHO borrow rate to 4.72% and slash Safety Module emissions by 30%, and Arbitrum to backfund all ‘approved but not funded’ projects from the Arbitrum STIP.
Proposals
OlympusDAO (OHM)
Proposal: RFC: Decentralized Front-ends for Olympus
Author: 0xFelix
Summary: This proposal requests to kickstart discussion around incentivizing decentralized front-ends for Olympus.
Key Points:
- As Olympus currently undergoes its decentralization phase, one major concern is the centralization of the Olympus website/front-end.
- This proposal requests to implement a modified version of Liquity’s decentralized front-end system, leading to an Olympus that is fully decentralized on a smart contract, front-end, and development level.
- If approved, the current Olympus DAO website will be converted into an information portal that would host a list of third-party hosted front-ends for all smart contract interactions.
- The curated list of front-end operators will be based on smart contract feature accessibility and the trustworthiness of the team hosting the front end.
- In exchange, front-end operators could receive a referral fee on bonds purchased by users through their front end and/or a part of the interest rate paid by users for Cooler Loans.
- Cooler Loans allow users to borrow DAI against gOHM at a 0.5% interest rate.
Our Take: This is a great initiative by the community to further decentralize the protocol and improve its robustness. If approved, it would provide important information to other protocols looking to carry out similar programs.
Rarible (RARI)
Proposal: RRC-13: Delegation Incentives Program
Author: Matt StableLab
Summary: This proposal requests to incentivize veRARI holders to delegate $RARI, increasing the amount of veRARI votes cast per on-chain proposal.
Key Points:
- $RARI token holders govern the RARI protocol, foundation treasury, and drive key decisions that affect the DAO through on-chain governance.
- However, currently, very few RARI are being used for governance which makes the DAO susceptible to bad actors, malicious proposals, and the inability of the DAO to promptly make changes.
- This proposal aims to improve voting turnout and the amount of RARI cast on average per on-chain vote by incentivizing token holders to delegate their RARI.
- The incentive system will allocate a total of 40k RARI with 30k RARI going to Delegators, 5.8k RARI going to Delegates, and 4.2k RARI to cover operational costs.
- Delegators (users who delegate their RARI to active voters) will receive rewards according to the formula: 0.3*(# veRARI delegated during the program)*(delegate score).
- Delegates will receive rewards according to the formula: 0.058*(# veRARI received during the program)*(delegate score).
- Where a Delegate’s score is their on-chain voting participation rate.
- The program will run from Nov 21 — Dec 15, 2023.
- All rewards will have a 6-month cliff with a 3-month linear unlock.
Our Take: The security of a DAO and protocol’s governance system is extremely important and something that should be actively improved upon. This is an interesting incentive system and we look forward to seeing its results.
dYdX (DYDX)
Proposal: [DRC] Upgrade Markets to Active on the dYdX Chain
Author: Callen Wintermute
Summary: This proposal requests to activate all markets on the dYdX Chain, enabling trading and trading fees to DYDX stakers.
Key Points:
- Currently, the dYdX Chain is in Alpha which has no active trading and is to ensure that the chain is stable and running smoothly.
- Since the genesis of the dYdX Chain and Alpha stage ~350M DYDX has been bridged and ~7M DYDX has been staked with validators.
- This proposal requests to end the Alpha stage and begin the Beta stage by transitioning all 33 markets from post-only to active.
- This vote will occur on the dYdX Chain and if approved, trading will be enabled and DYDX stakers and validators will begin to earn trading fees.
Our Take: We believe the dYdX Chain is ready to begin its Beta stage which will help contribute towards increased staked DYDX once trading fees begin to flow to validators and stakers.
Votes
Aave (AAVE)
Proposal: Amend Safety Module Aave Emissions
Status: Finished.
Created: Nov 11, 2023.
Ends: Nov 14, 2023.
Leading Consensus: YAE — 473k AAVE (100% of total votes).
Summary: This vote reduces AAVE emissions to the Safety Module by 30%. Currently, Aave spends 1,100 AAVE daily split between AAVE and b-80AAVE-20wETH deposited into the Safety Module. This proposal will reduce this down to 770 AAVE/day.
Aave (AAVE)
Proposal: GHO — Increase Borrow Rate
Status: Finished.
Created: Nov 9, 2023.
Ends: Nov 13, 2023.
Leading Consensus: YAE — 454k AAVE (100% of total votes).
Summary: This vote will increase the GHO borrow rate from 3% to 4.72%, slightly below the proposed sDAI rate. This is to try to reduce the recursive looping strategy users are employing to farm the sDAI rate which is causing downward pressure on GHO’s peg.
Arbitrum (ARB)
Proposal: Proposal to Backfund Successful STIP Proposals
Status: Live.
Created: Nov 8 2023.
Ends: Nov 15, 2023.
Leading Consensus: For — 123M ARB (92.35% of total votes).
Summary: This proposal requests to backfund all “approved but not funded proposals” from the recently approved Arbitrum STIP. The proposal will increase the total budget by 21.4M ARB to 71.4M ARB while also increasing the total participating protocols by 26, for a total of 56 funded projects.
dYdX (DYDX)
Proposal: Upgrade Markets to Active on the dYdX Chain
Status: Finished.
Created: Nov 10, 2023.
Ends: Nov 14, 2023.
Leading Consensus: Yes — 5.8M DYDX (99.1% of total votes).
Summary: This vote activates trading on the dYdX Chain by setting all 33 markets from post-only to active. This will allow DYDX stakers and validators to begin earning fees from trading volume.
