Wintermute DeFi Governance Digest — September 2023 | Week 4
This week’s proposals include Aave slashing Safety Module incentives by 30%, Wormhole requesting a 2.5M ARB grant to incentivize native USDC migration to Arbitrum, and 1inch launching a 6-month Grants Program with a budget of 500k; along with votes from Aave to deploy V3 on Gnosis Chain, Merit Circle migrating MC to BEAM at a rate of 1:100, and Stargate adopting Google Cloud as their Oracle.
Proposals
Aave (AAVE)
Proposal: [ARFC] Treasury Management — Amend Safety Module AAVE Emissions
Author: Marc Zeller, Token Logic
Summary: This proposal requests to reduce AAVE emissions to the Safety Module by 30%.
Key Points:
- The Aave Safety Module (SM) allows users to stake Aave (stkAAVE) and 80/20 AAVE/ETH BPT (stkBPT) tokens to secure the protocol in case of a shortfall event.
- The SM currently receives 1,100 AAVE (~$68k USD) daily split even between stAAVE and stkBPT.
- This proposal requests to reduce AAVE emissions by ~30% from 1,100 AAVE/day to 770 AAVE/day, given there is a strong consensus within the community that the DAO/protocol is overpaying for SM deposits.
- The APR is expected to reduce from 6.87% to 4.81% for stkAAVE and from 14.35% to 10.05% APR for stkBPT.
- This change comes in preparation for additional assets to be accepted as deposits in the SM as part of Llama’s Safety Module upgrades.
Our Take: We support the reduction in AAVE emissions towards the Safety Module in conjunction with the upcoming changes to allow additional yield-bearing assets. This is a good step towards achieving higher protocol profitability.
Arbitrum (ARB)
Proposal: Wormhole — Arbitrum Grant Request
Author: Wormhole
Summary: Wormhole is requesting 2.5M ARB from Arbitrum’s Short-term Incentive Program to incentivize the bridging of native USDC to Arbitrum by offering 8% APY on native USDC bridged through Wormhole.
Key Points:
- Wormhole is requesting a maximum of 2,500,000 ARB to target the importation of 100M native USDC to Arbitum.
- The 2.5M ARB will go towards rewarding native USDC bridged through Wormhole’s CCTP integration, targeting an 8% annualized rate of rewards for eligible users.
- The reward will be available for a maximum of 3 months and will accrue weekly.
- This translates to a maximum of 2% total return for users over the course of 3 months.
- Users are free to move their USDC once bridged, however, only USDC held in their bridged address will be eligible to accrue rewards.
- At the end of the 12-week program, unaccrued ARB rewards will be returned to the Arbitrum DAO’s treasury.
Our Take: This is a straightforward method to incentivise the migration of native USDC to Arbitrum. It will be interesting to watch the stickiness of this program once incentives have finished.
1inch (1INCH)
Proposal: 1inch DAO Grants Review Council
Author: Jengajojo
Summary: This proposal requests to establish a 6-month 1inch DAO Grants Program with a $500k budget to support Ecosystem Development, Research, and Analysis.
Key Points:
- This proposal aims to kickstart a 1inch community grants program with a 6-month budget of 500,000 USDC through a committee of 5 elected members, including 1 Grants Lead and 4 Reviewers.
- The Grants Council can approve or deny up to 20,000 USD grant requests and can seek feedback from technical and legal experts whenever necessary.
- Any grant request above 20,000 USD will require a Snapshot vote, seeking approval from the community.
- The grants will be available for requests that fall within 2 categories: Research and Analysis, and, Ecosystem Development.
- The Grants lead will receive a fixed salary of 5,000 USD/month and is expected to work at least 10 hours weekly. Reviewers will be compensated based on the ask of the proposals that they review:
- Compensation will be paid in a lump sum from the DAO treasury.
- Projects that are interested in getting funded are required to make a forum post and run an initial temperature check.
Our Take: Grants Programs have proven to be effective in producing high-quality research and/or developments for DAOs and their protocols. We look forward to seeing what initiatives are funded as a result of this program.
Votes
Merit Circle (MC)
Proposal: MIP-28 — Migrating MC token to BEAM token
Status: Finished.
Created: Sep 23, 2023.
Ends: Sep 25, 2023.
Leading Consensus: Yes — 18M MC (99.25% of total votes).
Summary: This vote ratifies the migration from MC token to BEAM token to better align with the current activities in the Merit Circle ecosystem e.g., the deployment of the BEAM network. MC tokens can be converted to BEAM on a 1:100 basis and BEAM will become the native token on the Beam network.
Aave (AAVE)
Proposal: [ARFC] Aave V3 Deployment on GnosisChain
Status: Live.
Created: Sep 24, 2023.
Ends: Sep 27, 2023.
Leading Consensus: YAE — 483k AAVE (99.99% of total votes).
Summary: This proposal requests to launch Aave V3 on Gnosis Chain. If successful, the deployment will support wETH, wstETH, GNO, USDC, wxDAI, and EURe as assets.
Stargate (STG)
Proposal: Stargate New Oracle Configuration: Google Cloud Oracle
Status: Finished.
Created: Sep 20, 2023.
Ends: Sep 23, 2023.
Leading Consensus: Yes — 6.3M veSTG (93.45% of total votes).
Summary: This vote ratifies accepting Google Cloud as the Oracle provider for Stargate and TheAptosBridge. This provides security backed by the Google Cloud to Stargate on all available chains that can support the integration.
