DeFi Protocol Governance Report | July 2022 | Week 3
There are no formal governance updates this week. Instead, we will look into the various polling mechanisms across the protocols we are tracking (Quorum Votes, Ratification Polls, and Temperature Checks).
Quorum Vote: Aave Governance. Adjust Level 2 requirements (long-executor)
Created: July 7th, 2022
Passed: Not yet,
11K AAVE For,
130 AAVE More discussion needed,
What does it do: Updates voting thresholds and requirements for Level 2 governance decisions.
- Current thresholds and requirements:
- Delay – 7 Days
- Grace Period – 5 Days
- Threshold – 2%
- Duration – 10 days
- Differential – 15%
- Quorum – 20%
- Proposed thresholds and requirements:
- Delay – 1 Day
- Grace Period – No Change
- Threshold – 1%
- Duration – No Change
- Differential – 7%
- Quorum – 7%
Why: Level 2 decisions are considered critical to maintaining the operational safety of the protocol and include decisions on the AAVE token, safety module, and governance. Currently, Level 2 passing requirements take a material amount of time and would require a 13% vote of the total voting-eligible tokens in favor. Strict guidelines can limit protocol growth as development continues.
Takeaway: Even Aave companies have come forth in support, and it is well understood that Level 2 governance requirements need to be updated. This will either move to the next stage or be returned to the community for further diligence and discussion.
Ratification Poll: MIP41c4-SP37: Governance Facilitator Onboarding (GOV-001)
Created: July 11th, 2022
119K MKR For,
What does it do: This ratification poll onboards a new Facilitator for the GovAlpha (Gov-001) Core Unit.
Why: A Ratification Poll is a sub-proposal process for Core Units. It requires only 10K MKR in support and allows a level of operational autonomy within Maker DAO Core Units. Patrick J. has been a GovAlpha part-time contributor since June 2021 and has authored six MIPs. His depth of experience and proven track record working with Maker is apparent from his contributions.
Takeaway: There is outstanding community support for this Core Unit ratification poll to onboard Patrick J as a facilitator. We look forward to seeing your continued contributions, Good luck Patrick!
Temperature Check: “Fee switch” activation for ETH/USDC & USDC/USDT
Created: July 19th, 2022
3.5M UNI For,
What does it do: Gauges community sentiment regarding whether the “fee switch” should be turned on. It proposes to initially apply two of Uniswap’s largest pools – one with a stable to stable pairing and the other with a stable to volatile pairing.
Why: The “fee switch” enables the ability for Uniswap to retain a portion of what is already being paid to liquidity providers. The retained funds can then be used to build or fund new tools for UNI token holders to leverage in growing the protocol. There is the possibility that some of the retained tokens could be paid to UNI token holders as well.
Takeaway: The fee switch hasn’t been tried and tested – this change would help provide real data and give the community more time to debate on how funds accrued should be utilised. Applying only to those two pools initially, the mechanism is expected to generate $20-$40k per day.
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