Here are the critical events in crypto governance for October 25, 2023.
Noteworthy Votes
- The first important votes to pay attention to is a group of votes along the Aura, Aave, Balancer, and Paraswap axis. I recommend people follow these as Aura Finance is making solid partnerships with important protocols.
- First, Aave is voting on an on-chain proposal to buy $400K of AURA OTM, swap $200K of AAVE to AURA with Aura DAO, and then send the proceeds to the GHO Liquidity Committee. Once these steps are complete, Aave can direct around $26K per week of emissions.
- Second, Paraswap is voting on using Aura Finance to bootstrap PSP liquidity on Optimism. If approved, Paraswap will allocate $20K per week as incentives on the protocol.
- Readers should be aware of Synthetix and their governance activity. Their DAO has recently become much more active – voting on numerous proposals concurrently. This week alone, the Spartan Council is voting on adding new functions to their platform, tweaking their L2 reward system, deprecating their pDAO and introducing the Risk Council, and finally, updating perp parameters, not once, but twice. Individually, the proposals are unremarkable, but readers should note that the Spartan Council is proving to be one of the most active teams in the space.
Forum Thread Of The Week
Uniswap is debating a motion for the Uniswap Foundation to delegate 2.5M UNI to three active yet ‘under-represented delegates.’ As I am sure readers are aware, governance participation in DAOs is, at best, inconsistent. Protocol governance suffers from an understandable apathy. These trends are just as apparent in Uniswap as in other DAOs – we can see from the graph below that participation in Uniswap governance has steadily been trending down. Additionally, as the proposal presents, even large delegators are inactive in Uniswap. Sadly, even the large DAOs suffer from the tragedy of the commons. To solve the lack of participation, the proposal recommends that the Foundation distribute voting power to three delegates who have voted in >90% of Uniswap proposals and have less than 2.5M UNI voting power.
The more I analyze DAOs, the more bearish and unsure I become on the entire concept. Most have seemingly become oligarchies where a select few powerful groups determine governance or have devolved into apathy. Granted, with regulations being a huge unknown, I don’t blame anyone for being wary of participating. But DAOs are falling short of their promise. As such, I think this is a solid proposal and move from Uniswap. If you have people who want to help govern your public good, it would probably be best if they are incorporated. However, this proposal is, at best, a band-aid, and I would encourage DAOs to move to autonomous, governance-less models as fast as possible.
The idea of a voting DAO has been around for a while now and has failed to address some of the core challenges around participation and consolidation of power. If one of the largest protocols fails to address these challenges, maybe it’s time to reinvent the wheel regarding distributed governance.
Honorable Mentions
- Celestia asks Osmosis for 300K OSMO for TIA incentives.
- Chaos Labs negotiates their renewal agreement with Aave to the tune of $1.6M.
- Lido received a proposal from Matter Labs to deploy wstETH to zkSync, with the ultimate goal of Lido taking control of the bridge.
- Quickswap debates launching on Manta Network.
- Yearn proposes an incentive scheme with Stargate Finance. For every $1M in TVL in the STG-USDC.e pool, Yearn will provide 500 OP per week as incentives for 26 weeks.