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CryptoEconomic ResearchNews

DeFi Protocol Governance Report | October 2022 | Week 1

This week Maker onboards RWA, Aave looks to engage Chaos Labs, Synthetics votes on increasing BTC open market interest, and more!
by Laurence Smith, Cameron ODonnellOctober 7, 2022
DeFi protocol Governance Report October 2022
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Ratification Poll: PPG – Open Market Committee Proposal

Created: October 3rd, 2022

Passed: Yes,
88K MKR For

What does it do: Updates the following:

  1. Decrease the CRVV1ETHSTETH, a stability fee, from 2% to 1.5%.
  2. Decrease the YFI, a maximum debt ceiling, from 25M DAI to 10M DAI.

Why: As outlined in the proposal, the changes to the parameters are to minimize risk and maximize capital efficiency. Explanations for each update are as follows:

  1. Lowering stability fees to parity with the WSTETH-A vault type may stimulate demand and allow this vault to reach sustainable levels of exposure.
  2. Considering that YFI has not seen significant minting in the past few months, this change is unlikely to limit organic vault usage.

Takeaway: The Maker Open Market Committee is appropriately managing risks under current market conditions.

Executive Proposal: Monetalis Clydesdale (RWA007-A) Onboarding, Funding Ambassador Program SPF, Core Unit MKR Streams and Transfers

Created: October 5th, 2022

Passed: Yes,
81K MKR For

What does it do: The aggregated vote will execute: (1)Monetalis Clydesdale [MIP65] onboarding as a new vault type, (2) Core Units MKR Distribution and (3 ) the funding of a special purpose fund.

  1. Monetalis Clydesdale [MIP65] 
    • Initial onboarding will have a debt ceiling of 1M DAI. A subsequent spell will increase the debt ceiling to 250M DAI if successful.
  2. Core Units MKR Distribution
  • Streams 787 MKR to the GovAlpha and StarkNet engineering core unit.
  1. Funding of a Special Purpose Fund
    • This proposal will stream 81,000 DAI to the Ambassador Program special purpose fund.

Why:

  1. Monetalis Clydesdale [MIP65] 
    • Execution of MIP65 with the following parameters:
      1. Stability fee: 0%.
      2. Debt ceiling: 1M DAI.
      3. Liquidation ratio: 100%.
  2. Core Units MKR Distribution
    • Standard execution of previously approved budgets, salaries, and contributor pay.
       
  3. Funding of a Special Purpose Fund
    • Based on the accepted Ambassador Program’s special purpose fund request, 81,000 DAI will be transferred to the program’s multi-sig.

Takeaway: Maker continues to finalize executive votes that streamline RWA arrangements and general operations.

Updates on Prior Coverage

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Temperature Check: Chaos Labs <> Aave

Created: October 3rd, 2022

Passed: Yes
169K AAVE For

What does it do: Proposes a 12-month work plan with Aave to focus on risk management and parameter recommendations for all v3 markets.

Why: Chaos Labs’ industry-leading simulation platform and environment are designed to mimic mainnet. This proposal intends to maximize the Aave protocol’s return on investment and give Chaos the chance to put its best foot forward in delivering long-term value to the community.

Takeaway: Chaos Labs’ is well known within the ecosystem and Aave is supporting the long-term viability of Aave V3 by engaging in simulation testing.

Updates on Prior Coverage

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Temperature Check: Improve Governance and Voting Processes with Commonwealth

Created: September 20th, 2022

Passed: Yes
100K Comp For

What does it do: Proposes the use of Commonwealth for community governance management and discussion.

Why: Commonwealth is a platform for DAOs to discuss and vote on proposals. The platform is already used in 900+ DAOs including dYdX and Axie. The platform boasts ease of use and organization as key differentiations. Integration with snapshot also allows for voting within the platform. The community is proposing the tool to increase governance efficiency. 

Takeaway: The Compound community is exploring how to improve the efficiency and organization of its governance processes.

Updates on Prior Coverage

Implementation Vote: Gauntlet <> Compound Renewal – Passed with 1M COMP

Synthetix Banner

Proposal: Increase BTC Futures Market Max Open Interest

Created: October 5th, 2022

Passed: Not yet but looking very likely,
7 SNX-SC For,
0 Against

What does it do: Increases the maxMarketValueUSD, the maximum amount of open interest allowed on each side of a market, on the BTC Futures market to 10M sUSD from 5M sUSD. 

Why: The motivation here is to increase open interest utilisation, which is currently at 90%.   

Takeaway: Full steam ahead with 10M sUSD.  

Updates on Prior Coverage

Proposal: Proposal to diversify LEGO budget for Q4 ’22 and moving further

Created: October 6th, 2022

Passed: Yes,
2.5K LDO For,
518 Against

What does it do: LEGO (Lido Ecosystem Grants Organisation) is looking to make three key changes for Q4: (1) change the grants budget to 60% stablecoin and 40% LDO, (2) set the budget at $500K, and (3) assesses a LEGO members wallet before providing individual allowances and refills accordingly (so as not to exceed the allowance). 

Why: Analysis of historical data identified that 60% of grantees requested stablecoin payments. In response to their requests Lido are looking to give grantees what they want, which should have the added benefit of reducing selling pressure on LDO. 

Budget is set at $500K as that was the average historical spending over the past nine months. 

Individual allowance recalculations are designed to improve efficiency within council and nominee allowances. 

Takeaway: LEGO is getting more efficient and making their grants better suited for grantees – all good changes at first glance. 

Updates on Prior Coverage

Sushi Swap

Updates on Prior Coverage

Implementation Vote: Sushi Head Chef Election – Jared Grey with 11M SUSHIPOWAH 

  • Sushiswap
  • Uniswap

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