Wintermute DeFi Governance Digest: February 2025 | Week 1

05 FEBRUARY 2025 | RESEARCH | AUTHORED BY IGOR

This week’s proposals include Compound collaborating with Morpho and Polygon to launch vaults, Lido preparing for the Pectra hardfork; along with votes from Compound to update the Governor contract, Arbitrum to claim Nova gas fees, as well as transfer funds according to the STEP program.

Proposals

Compound Finance (COMP)

Proposal: Compound <> Morpho <> Polygon Collaboration

Author: Gauntlet

Summary: This proposal suggests launching Morpho Vaults in collaboration with Compound and Polygon in an attempt to increase market share.

Key Points:

• Currently, Compound v3 has $30M TVL on Polygon compared to $300M from Aave.


• Polygon previously proposed earning yield on bridge funds using Morpho, but it got massive pushback from the community.


• Polygon returned to Aave and proposed a $3M joint liquidity incentive program, but the DAO disapproved it.


• So, what we see now is probably an attempt to run the same program but with Compound instead of Aave.
  

• Gauntlet will help curate these vaults, and lending protocols (Moonwell, Seamless, Ionic) already run similar vaults.


• The program includes $3M in a mix of COMP and POL for distribution in 120 days.

Our Take: This proposal sounds like a bold experiment and collaboration to gain market share after Aave DAO decided to disapprove of a similar proposal and deprioritize the Polygon instance in general.

Lido (LDO)

Proposal: Ensuring Compatibility with Ethereum’s Pectra Upgrade

Author: Maksim_Kuraian

Summary: This proposal is the first step for Lido to be ready for the coming Pectra hardfork, focusing on compatibility instead of supporting new features.

Key Points:

• This proposal will consist of two onchain votes: pre and after Pectra activation.


• With the first one, Lido plans to change a few system contracts that collect data from the Beacon chain.


• The vote after Pectra will include updates of necessary consensus parameters, like new limits for a number of exited and appeared validators./li>
  
• This proposal also has a fallback option, where all deposits are paused before the Pectra activation until the following vote.

Our Take: We support Lido preparations for Pectra, as well as looking forward to their strategy to support Pectra benefits later.

Votes

Compound (COMP)

Proposal: Compound Governor Contracts Upgrade

Status: Finished.

Created: Jan 28, 2025.

Ends: Feb 2, 2025.

Leading Consensus: For- 723.6k COMP (100% of total votes).

Summary: This vote updates the Governor contract by switching from the custom contract originally written by Compound Labs a few years ago to the OpenZeppelin implementation with multiple improvements.

Arbitrum (ARB)

Proposal: Approve the Nova Fee Sweep Action

Status: Live.

Created: Jan 31, 2025.

Ends: Feb 7, 2025.

Leading Consensus: For – 94.9M (94.96% of total votes).

Summary: This vote claims gas fees collected on Arbitrum Nova by sending them to the DAO treasury.

Arbitrum (ARB)

Proposal: Non-Constitutional: Stable Treasury Endowment Program 2.0

Status: Live.

Created: Jan 31, 2025.

Ends: Feb 14, 2025.

Leading Consensus: For – 33.47M (94.4% of total votes).

Summary: This vote authorizes the transfer of 35M ARB to diversify the Aribtrum treasury using RWAs.