Wintermute DeFi Governance Digest — October 2023 | Week 3
This week’s proposals include Aura Finance facilitating a treasury swap with Aave worth $200k, Blur begins discussions about a 1% trading fee, and Uniswap discusses funding Ekubo with 3M UNI in exchange for a 20% stake of their token supply; along with votes from Balancer to deposit 160k BAL into Aave, Aave increasing the GHO borrow rate to 3%, and MakerDAO offboarding rETH and receiving 2.25% on all USDP PSM deposits.
Proposals
Aura Finance (AURA)
Proposal: [Temp Check] Secure AAVE DAO auraBAL mint and AURA accumulation through Swap
Author: Yogis, Karpatkey
Summary: This proposal requests to swap $200k worth of AURA for AAVE in collaboration with the Aave DAO, in return, Aave plans to mint ~157k auraBAL.
Key Points:
- Aave has voted on acquiring AURA to enhance the DAO’s ability to incentivize GHO liquidity.
- A part of Aave’s proposal includes acquiring $200k worth of AURA in exchange for AAVE with the Aura DAO.
- In return, AAVE is committed to acquiring a total of 1M units of AURA and minting ~157k auraBAL (~$1.4M USD).
- If successful, Aura DAO will commit to holding the received AAVE in their treasury for at least 12 months as stkAAVE while delegating its voting power to Karpatkey.
Our Take: We always enjoy seeing collaboration between DAOs in the ecosystem. We believe that this proposal is net beneficial for both protocols.
Blur (BLUR)
Proposal: Blur Fee Switch Discussion
Author: Alex Arca
Summary: This proposal requests to turn on a 1% base fee for Blur where fees will be used for a BLUR token buyback and burn and introduce a tiered fee discount based on the amount of BLUR a user holds.
Key Points:
- When $BLUR was released in Feb 2023 there was a 180-day freeze on governance voting for/against a fee switch on the platform.
- The freeze period has now expired granting the community the ability to enable the fee switch.
- The BLUR token currently only has one utility which has been governance voting, leading to a lack of demand for the token.
- Furthermore, this lack of demand has been met with large supply shocks due to Blur seasons which incentivizes liquidity providers on the platform.
- This proposal attempts to fix the demand side by introducing a 1% trade fee and a tiered fee discount.
- Any fees collected from the 1% trading fee will be sent to a smart contract that systematically buys back and burns the blur tokens daily via a DEX.
- To combat the increase in trading fees, a tiered fee discount is proposed based on the number of BLUR tokens a user holds in their wallet.
- It’s expected that these new changes will help incentivise the largest BLUR farmers on the platform to hold BLUR which is currently not the case.
Our Take: This is an interesting proposal and if successful, we look forward to watching its effects on Blur’s market share.
Uniswap (UNI)
Proposal: RFC — Onboarding Ekubo, Inc. as a core developer of Uniswap Protocol
Author: Moody
Summary: This proposal requests to establish a partnership between Ekubo, Inc. and the Uniswap DAO in the form of a 3M UNI (~$12M USD) contribution in exchange for a 20% share of a future Ekubo protocol governance token.
Key Points:
- Ekubo Protocol is an AMM on Starknet with a singleton design, super-concentrated liquidity and support for extensions.
- In its first month, Ekubo won ~75% of the total volume traded on Starknet with only 5% of the TVL.
- Ekubo proposes a partnership with the Uniswap DAO in the form of a 3M UNI contribution in exchange for a 20% share of a future Ekubo protocol governance token.
- As a result, the Uniswap DAO will become a significant stakeholder in the Ekubo protocol and vice versa. This alignment will enable the development teams of Uniswap and Ekubo to collaborate.
- Ekubo Inc., will use the 3M UNI to continue its operations and development of the Ekubo protocol on top of contributing to the Uniswap protocol.
- Much of the work to be delivered will be public goods to Starknet including token standards, governance, and incentives contracts written in Cairo.
- If this proposal passes, Ekubo will deploy a set of governance contracts and a governance token for Ekubo within 1 month. With the Uniswap DAO receiving 20% of the deployed token supply.
Our Take: Given the size of the Uniswap DAO treasury, this opportunity should not materially impact the protocol’s funding requirements.
Votes
Balancer (BAL)
Proposal: [BIP-453] Deposit 160k BAL into Aave v3
Status: Live.
Created: Oct 13, 2023.
Ends: Oct 16, 2023.
Leading Consensus: Abstain — 2.5M veBAL (66.73% of total votes).
Summary: This proposal requests to deposit an additional 160k BAL from the DAO’s treasury to Aave V3 to earn a yield on the DAO’s assets. This will be in addition to the DAO’s already 188.34k BAL deposited into Aave.
Aave (AAVE)
Proposal: [ARFC] Further increase GHO Borrow Rate
Status: Finished.
Created: Oct 13, 2023.
Ends: Oct 16, 2023.
Leading Consensus: YAE — 584k AAVE (99.86% of total votes).
Summary: This proposal requests to increase GHO’s borrow rate from 2.5% to 3%, increasing the DAO’s revenue and strengthening GHO’s peg.
MakerDAO (MKR)
Status: Live.
Created: Oct 11, 2023.
Ends: N/A
Leading Consensus: Yes — 87,732 MKR
Summary: This proposal introduces various changes including MakerDAO earning 2.25% on all USDP PSM deposits, offboarding RETH-A, increasing RWA debt ceilings (Andromeda and Clydesdale) to 3 billion DAI, and increasing both WBTC and ETH Vault stability fees.
