Chart of The Day: 20B added to Stablecoin Stash

The supply of the top 5 stablecoins has grown by $20B in 2022. USDC was responsible for the bulk of the growth, expanding $10B in supply, or half of the growth year-to-date.
USDT’s supply recently crossed $80B, but its growth remains flat this year. USDT has been the subject of recent criticism, with hedge fund Fir Tree announcing that they’re shorting USDT on the basis that the high-yield commercial papers that Tether holds are linked to Evergrande Crisis. This comes after USDT recently reduced its exposure to commercial paper by $6.2B in February.
UST’s growth has been nothing but impressive, growing by 44% YTD. In absolute terms, UST’s supply growth ranks at 2nd, adding $4.4B in supply YTD. This was catalyzed by LFG raising $1B to form BTC reserve for UST, with an additional 12M Luna donated by Terraform Labs to LFG to be burned and further grow LFG’s UST reserves.
For more on UST, Delphi members can revisit our Terra ecosystem overview here.

Wizard Cults Are DAOs Too, and Maker Gets Into Budgeting

[Excerpt from our Mar. 14 DAO Insights]

There were three notable events this week in the governance we covered. The first was the exceptional level of participation in Forgotten Runes Wizard Cult (FRWC). We have noticed a trend of 10k NFT projects attempting to pivot themselves to a DAO model. Sadly, in our opinion, many of these are an effort to raise the floor price of their NFTs, and we are skeptical of their long-term viability. However, FRWC seems to have bucked this trend. They had a high level of participation in their inaugural governance votes. The DAO had an average of 84.32% of their NFT supply used to cast votes across two proposals through 539 addresses. Based on that participation alone, this seems like a project to watch, and if they can maintain participation levels, one whose DAO-future may be bright. Secondly, Frax Finance had 33.22% of the FXS supply used to vote in their recent governance. However, as mentioned in previous newsletters, the largest voting bloc for Frax Finance is now Convex. Convex accounted for ~75% (25m) of the total votes cast in this particular proposal. Considering that Frax Finance has a quorum of 6.1m, it now seems like Frax proposals hinge on what Convex decides to do. Finally, we want to point out the high level of participation in Sifchain. On average, 1715 votes were cast in their most recent two proposals, suggesting that governance in the Cosmos ecosystem has dedicated actors.

Forum Spotlight

Budgets, Budgets, Budgets
Synopsis: Maker DAO delegate Doo_Nam has started a conversation in Maker DAOs forum regarding budgeting and transparency. They feel there is an increasing amount of Maker DAO core units requesting budget increases while profit is declining. According to the thread, Maker DAO expenses are about $70m per year, and according to makerburn.com, the estimated annual income is about $67m per year. They also point out that budgets are often not examined as carefully as they should be due to the sheer amount of budgets to review and implicit social pressure to pass budgets without question. To remedy this situation, Doo_Nam, recommends the following:
- Freezing core unit budgets for six months to a year after a budget increase.
- Cap budget reviews to 1-2 per cycle.
- Require or encourage budget submissions to include market rates for services.
- Rethink the structure of the core units.
Pro Arguments: Doo_Nam has seemingly struck a chord with the Maker DAO community. The majority of responses in the forum are supportive and echo their sentiments that Maker DAO’s current organizational and budgeting structure is struggling at scale. Even a core unit facilitator agreed, pointing out that expense reports are fragmented, not standardized, and there is a lack of performance evaluations for core units. However, the SES core unit is building out a performance API and dashboard for Maker DAO to assess better how core units are operating. Another community member reiterated that there are too many budgets to follow and prefers a quarterly budget. Finally, yet another community member recommends a consolidated global budget approved by MKR holders.
Con Arguments: The only real strong counterpoint is that some core units’ actions are not directly measurable by ROI. This counterpoint means that evaluating core unit performance and budget allocations will require more nuance than directly questioning how much revenue they bring to Maker DAO.
For more, Delphi members can see our latest DAO Insights here.

MetaMundo: The 3D NFT Marketplace for Building the Metaverse

[Excerpt from Delphi Podcast]

In this episode, we sit down with Mark Studholme and Finn Hansen, Co-founders of MetaMundo, a project empowering 3D creators to shape the open metaverse. We discuss how NFT interoperability is technically achieved, MetaMundo’s 3D NFT marketplace, the functionality of MetaPortal NFTs, and much more!
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Notable Tweets

LFG Burns 4M LUNA to Acquire Exogenous Collateral

LFG Council has voted to burn another 4M luna to mint roughly 372M ust, which will be used to acquire exogenous collateral. Once this burn is completed, LFG’s non-luna reserves will roughly sit at a value of $2.2B, as well as 8M Luna remaining for future growth.

LFG

$Luna $ust

— LFG | Luna Foundation Guard (@LFG_org) March 15, 2022

LayerZero Beta is Live

https://t.co/YMU3MsXlgL

— LayerZero Labs (@LayerZero_Labs) March 14, 2022

Wonderland Ragequit

1/⌛️
The wonderland multisig prepared the treasury for the rage quit proposal.

http://wonderland.money has been updated with a new rage quit UI.

Whitelisted participants will be able to redeem their wMEMO against the calculated backing price ($37,135) in $MIM tokens.

— Wonderland.Money (@Wonderland_fi) March 15, 2022