DeFi Protocol Governance Report | April 2022 | Week 4

Proposal: Update Mid-TVL cToken Implementations

Created: April 16th, 2022

Passed: Not yet but looking likely,
529,387 COMP For,
0 Against 

What does it do: This proposal is a patch created by Equilabria. It updates the cToken implementation contract for the following mid TVL assets:

• cMKR
• cLINK
• cCOMP
• cTUSD
• cUNI

With the following changes:

• Upgrades Solidity version of the token and related contracts to 0.8.10
• Removes the use of SafeMath and CarefulMath, to be replaced by Solidity 0.8’s checked math 
• Removes the custom errorCode return values, to be replaced by reverts and custom errors

Why: Only cTokens are being upgraded due to the complexity of having multiple Solidity versions in the same repo. Solidity now automatically reverts when a mathematics error occurs, removing the need for SafeMath and CarefulMath. And by implementing reverts and custom errors it gives a more structured way to deal with errors, instead of enum or string comparisons. 

Takeaway: A new Solidity version is here and its benefits include those highlighted above.  

Proposal: Governance Framework for Portals

Created: April 14th, 2022

Passed: Yes,
63K AAVE For,
39 Against 

What does it do: Implements a standard framework for entities using Portals that are looking to be whitelisted by Aave V3 to become standard-compliant candidates. Using this framework entities will be able to request credit lines on the Aave V3 protocol on multiple network. 

Portals is an Aave V3 feature that enables supercharged cross-chain bridges liquidity. 

Why: The framework will increase the liquidity efficiency for entities requesting Credit lines, in addition to increasing protocol revenue via fee collection. 

Takeaway: We’re moving towards a cross-chain world and Aave’s Portals are getting us there. This framework helps ensure that entities are standard-compliant. 

Proposal: Kanpai: SushiMaker Treasury Payout Ratio [Implementation]

Created: April 19th, 2022

Passed: Not yet but looking likely, 
360k SUSHI UNI For,
757 Against 

What does it do: This proposal introduces a governance-controller ‘payout ratio’ parameter, which will initially be set at 95% or 90%. The effect of this will be the diversion of a portion of trading fees from xSUSHI stakers to Treasury, which will be revenue denominated in ETH. As an example, if a 90% payout ratio is implemented then 90% of the 5bps fee will be paid to xSUSHI holders. 

Why: SUSHI holders will have governance over a new cash flow, which could be used to reinvest in growth or to generate non-operating income. Additionally, it provides bear market protection. 

Takeaway: Currently the Treasury has a near 100% SUSHI allocation, which is a risk in a prolonged bear market. Further diversification of the Treasury’s revenue streams will provide more revenue to cover operational expenses, as well as providing a surplus for investing in low-risk assets to diversify token holdings and to generate income via yield farming, staking ETH etc. 

Proposal: Let’s Get $TOKE [Implementation]

Created: April 19th, 2022

Passed: Yes
792K SUSHI For,
1.3 Against 

What does it do: Implements staking of the 41,424.01 TOKE ($963,522.47) sitting in Sushi’s Treasury.

Why: TOKE staking rewards have a potential APR between 16% to 31%. This is part of the overall strategy to make Sushi’s Treasury more productive and to utilise the yield earned to help sustain the protocol over the long-term, for e.g by covering operating fees and fees associated with setting up the Swiss Association.  

Takeaway: Sushi continue to up their Treasury activity and bring in more funds to help sustain their expenses. In turn, this will create more fees earned for Sushi and xSushi holders. 

• MakerDAO
• Rari Capital
• Uniswap

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