Wintermute DeFi Governance Digest — November 2023 | Week 5
This week’s proposals include Aave adding GHO to the Safety Module, dYdX Launching Trading Rewards and a $20M 6-month incentive program, and Redacted Protocol launching a Hidden Hand market for PancakeSwap’s veCAKE; along with votes from Arbitrum to backfund successful but not funded STIP participants, and Synthetix offering V3 integrators on Base a 20% USDC rebate on referred trades.
Proposals
Aave (AAVE)
Proposal: [ARFC] Upgrade Safety Module with StkGHO
Author: Marc Zeller
Summary: This proposal requests to add GHO as an asset to Aave’s Safety Module. This will allow GHO to be staked and act as collateral for potential shortfall events.
Key Points:
- Aave’s Safety Module acts as a safety net for the protocol in case of potential shortfall events.
- In the case of a shortfall event, assets in the safety module can be slashed and paid out to users who are affected.
- By adding GHO to the Safety Module, users can stake GHO as stkGHO and begin earning AAVE incentives in exchange for helping secure the protocol.
- The GHO Safety Module will target a liquidity pool of 9M GHO with an APR range of 12–15%, achievable with a daily emission of 35 AAVE/day.
- stkGHO will have a slashing rate of 100% and a cooldown period of 10 days.
Our Take: Adding GHO to the Safety Module will improve its robustness in the case of a shortfall event and avoid having to sell off large amounts of AAVE. Furthermore, it will help generate demand for GHO due to AAVE incentives.
dYdX (DYDX)
Proposal: Activate Trading Rewards and the 6-Month Launch Incentive Program
Author: Steven_Amber
Summary: This proposal requests to launch trading rewards on the dYdX Chain and Chaos Labs’ $20M 6-month incentive program.
Key Points:
- Currently, there are no external incentives for traders on the dYdX Chain, unlike dYdX’s V3 platform which has a Trading Rewards program.
- Therefore, this proposal requests to mimic V3’s Trading Rewards program by activating Trading Rewards on the dYdX Chain beginning with 527,397 DYDX per epoch and ramping up to 1,044,246 and 1,423,972 in the following 2 epochs.
- The increase in trading rewards for the dYdX Chain will happen in unison with subsequent decreases on V3 to aid migration from V3 to the dYdX Chain.
- Furthermore, this proposal will activate the launch of Chaos Labs’ $20M 6-month incentive program to further boost activity on the dYdX Chain.
- The 6-month incentive program will reward deposits, trading, staking, and governance participation on the dYdX Chain. With deposits and trading receiving the highest share of rewards.
Our Take: Both programs should have a positive effect on migrating existing users and inviting new traders to the dYdX Chain.
Redacted Protocol (BTRFLY)
Proposal: Launch PancakeSwap Hidden Hand Market
Author: Sami
Summary: This proposal requests to deploy Hidden Hand to BNB Chain and create a new Hidden Hand market for PancakeSwap on BNB Chain, Ethereum, and Arbitrum.
Key Points:
- With the launch of veCAKE, veCAKE holders can now direct CAKE emissions to liquidity pools which opens up the opportunity to launch a bribes market.
- By launching a Hidden Hand market for PancakeSwap, veCAKE holders can sell their right to emissions in exchange for bribes from other protocols.
- Hidden Hand will support BNB Chain, Ethereum, and Arbitrum deployments for PancakeSwap in exchange for a 2% fee.
Our Take: Bribe markets for veTokens have seen great success in the past. We look forward to seeing how active the market gets for PancakeSwap.
Votes
Arbitrum (ARB)
Proposal: Proposal to Backfund Successful STIP Proposals
Status: Live.
Created: Nov 16, 2023.
Ends: Dec 3, 2023.
Leading Consensus: For — 178.6M ARB.
Summary: This vote requests to backfund grant requests from Round 1 of Arbitrum’s Short-Term Incentive Program. Protocols that were successful in the voting period but did not receive funding due to the budget being exhausted will receive their respective ARB grant.
dYdX (DYDX)
Proposal: Activate Trading Rewards and the 6-Month Launch Incentive Program
Status: Live.
Created: Nov 25, 2023.
Ends: Nov 29, 2023.
Leading Consensus: Yes — 7.7M DYDX (75.6% of total votes).
Summary: This vote ratifies the launch of Trading Rewards on the dYdX Chain and Chaos Labs’ $20M 6-month incentive program.
Synthetix (SNX)
Proposal: Perps v3 Integrator Incentive
Status: Finished.
Created: Nov 21, 2023.
Ends: Nov 26, 2023.
Leading Consensus: Yes — 7 SNX-SCT (87.5% of total votes).
Summary: This vote requests to launch an integrator fee share mechanism for Perps V3 on Base. Integrators will earn a 20% base fee in USDC from trades executed through a Synthetix Perps integration.
