The Week in Governance (Nov 29, 2023)

Noteworthy Votes

  • Aave has successfully voted and executed a proposal to reduce emissions to the Safety Module by 30%. This vote reduces emissions to AAVE and AAVE/WETH BPT from 550 AAVE per day to 385.
  • The Graph is voting on a proposal to shift most of their rewards to Arbitrum. If passed, the vote will increase the rewards on Arbitrum from 50% to 95% of the total GRT issuance – 114 GRT per block. Conversely, the proposal will reduce rewards to 5% of issuance on Ethereum. 
  • Threshold Network is voting on a 60-day fee holiday for their platform. The proposal suggests reducing tBTC minting and redemption fees to 0% for 60 days. This proposal attempts to increase the tBTC supply by eliminating barriers to entry. 

Forum Thread Of The Week

The End Of $APE Staking

I rarely discuss the same DAO twice in these governance posts, but it looks like ApeDAO is gearing up to make some big moves. This proposal, titled “Ending ApeCoin Staking at the End of Year 1,” suggests terminating AIP-21 and its associated AIPs 4 and 5 about $APE staking. The goal is to prevent further dilution of $APE and reallocate reserved funds to the DAO treasury for more strategic purposes. By ending these AIPs, the proposal aims to reduce dilution, allocate resources strategically, and preserve the DAO treasury. The proposal outlines steps to implement the termination and highlights the benefits to the ApeCoin ecosystem. There is no cost associated with this proposal.

Token staking is a double-edged sword. On the one hand, staking is an attractive feature. People love tokens where they can earn some sort of yield. On the other hand, when staking rewards are in the same token as the one the user stakes, it can drastically increase the token supply. Teams often get around this by creating some sort of token sink where tokens are removed from the market. But without some kind of token sink, staking is often a losing long-term proposition. Single token staking is partially responsible for $APE’s price action, which went down from $6 at the beginning of the year to $1.58. If ApeDAO passes this proposal, it could benefit the token price and the DAO overall, and as such, I recommend watching how this plays out. 

Honorable Mentions

    • Aave proposes a new chain deployment framework to streamline launches on new chains. 
    • Balancer considers capping snapshot voter power to a maximum of 40%-45% in response to Aura almost controlling 50% of the veBAL supply.
    • BendDAO is considering splitting BEND emissions between ETH and USDT pools, with 75% for ETH and 25% for USDT.
    • Dia is proposing a small airdrop of 91500 DIA to community members who voted on proposals in 2023.
    • HiFi Finance is considering a liquidity bootstrapping program, which will see them mint 20M $HIFI to sell for USDC over ten months with plans to rebuy the tokens later. 
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