Proposals

Mars Protocol (MARS)

Proposal: Make Osmosis or Neutron the home of Mars Protocol

Author: John_Galt, NeutronAdmin, jose_delphi

Summary: Mars’ next evolution involves shutting down its own IBC chain and focusing on product development. This means finding a new chain to host the protocol, of which both Osmosis and Neutron have signaled their support.

Key Points:

• Mars has concluded that consolidation, collaboration, and alignment are necessary for Cosmos to compete with Ethereum alternatives.
• To date, Mars has had its own chain with several outposts across other IBC chains. This multi-chain model requires additional resources and effort to implement and maintain.

• Thus, they’ve decided to purely focus on building out a DeFi super-app and forego future chain development.
• Two proposals have been put forward by Osmosis and Neutron requesting Mars to make their respective chain Mars’ new home.
• Each respective proposal shares pretty much identical terms, however, Neutron’s proposal originally requested a 3-month exclusivity clause requiring any new feature of Mars to be deployed on Neutron first for 3 months before the feature is added to multi-chain deployments.
• Due to community feedback, this clause has now been removed.
• Each proposal requires both parties to establish a close working relationship.
• Osmosis/Neutron would grant $3M USDC to the Mars Protocol Foundation over two years to fund the development and growth of the Mars Protocol.
• In return, the Mars Protocol Foundation will grant 60M MARS tokens to Osmosis/Neutron which will be unlocked linearly over six years.
• Furthermore, 10% of the revenue of the Mars Protocol DAO will be directed and used to mutually benefit both Mars and Neutron Protocol (Osmosis did not require this).

Our Take: The overall decision to focus on Mars’ product and eliminate allocating resources to chain upkeep will likely prove fruitful in the future. We look forward to which chain the Mars DAO chooses, but looks like Neutron is a preferred option.

Aave (AAVE)

Proposal: [ARFC] Flashloans Update

Author: ACI

Summary: The space has significantly evolved since the launch of Aave v1 with the flash loan feature, and now most protocols provide fee-free flash loans. This proposal will lead to sunsetting flash loans on Aave v2 and whitelisting them on v3 to specific entities.

Key Points:

• Even though Aave was not the first protocol to invent and implement flash loans, it was Aave that managed to make it a DeFi primitive.
• Originally mostly used to collateral switch, this tool has become popular in MEV extraction (arbitrage, liquidations), and even exploits.

• The launch of Uniswap v2 with flash swaps opened up access to even more liquidity not only for large-cap tokens, which was more convenient to use for arbitrage.
• DODO and Balancer v2, in turn, offered their liquidity for flash loans without any fees.
• All this led to a decrease in interest in Aave flash loans which is why ACI has proposed to change the strategy.
• Instead of giving everyone access to the Aave liquidity in a flash manner, it’ll be limited to only whitelisted entities, which should strengthen relationships between these entities and Aave DAO.
• Also, in this case, flash loans could be more gas-optimized, which will positively affect the end users of approved protocols.

Our Take: The decline in interest in flash loans has been continuing for the last two years, so it will be interesting to see what effect this proposal will have.

Compound (COMP)

Proposal: Comet Vulnerability Disclosure (Patched)

Author: brrito

Summary: A bug hunter found a critical vulnerability in the Base WETH v3 market that Compound has fixed after his disclosure. According to the proposal, the bounty amount is in question.

Key Points:

• An independent researcher found a critical vulnerability, although it’s hard to use it profitably because of high gas costs.
• Both Compound and OpenZeppelin teams suggested paying the highest bounty in the size of $150k when brrito asked for only $125k in various assets.
• Because of some pushback from the community members and the governance apathy, the first on-chain vote failed.
• The security researcher came back with a new vote and asked for $100k in COMP.
• Although the specific vulnerability was not publicly disclosed, according to comments, it was related to the solvency invariant, due to which, under other pool parameters, it could lead to 100% TVL losses.

Our Take: The lack of reasonable bug bounty programs leads to more blackhats in the industry. Of course, expenses should not grow to immeasurable figures, but DAOs shouldn’t skimp on protecting user funds, especially regarding vulnerabilities in deployed contracts.

Votes

OlympusDAO (OHM)

Proposal: OIP-150: Decentralized Front-ends for Olympus

Status: Finished.

Created: Dec 7, 2023.

Ends: Dec 10, 2023.

Leading Consensus: Approve OIP-150–1.4M sOHM (99.99% of total votes).

Summary: This vote requests to implement a modified version of Liquity’s decentralized front-end model for Olympus products. This will eliminate one of the last centralization aspects of the protocol.

Synthetix (SNX)

Proposal: SIP-2043: End SNX inflation

Status: Live.

Created: Dec 8, 2023.

Ends: Dec 17, 2023.

Leading Consensus: Yes — 7 SNX-SCT (100% of total votes).

Summary: This proposal requests to end SNX token inflation as it no longer has a meaningful impact on staking. Synthetix has proven to generate substantial fees for stakers and with inflation set to 0, we look forward to seeing its effect on staked SNX.

Uniswap (UNI)

Proposal: Delegation of UNI to Active but Underrepresented Delegates

Status: Live.

Created: Dec 5, 2023.

Ends: Dec 13, 2023.

Leading Consensus: For — 46.2M UNI (99.9% of total votes)

Summary: To increase governance activity, the Uniswap DAO decided to allocate 10M UNI for 7 delegates using Franchiser. This proposal will increase the voting power of several established delegates and will also give votes to delegates who are more known for participating in other DAOs.