DeFi Governance Digest: 2 May 2023

Proposals

CoW Swap (COW)

Proposal: Utilization of MEV Blocker Kickbacks from CoW Settlements

Author: fleupold

Summary: This proposal discusses the distribution of kickbacks received after using MEV Blocker. The current amount of kickbacks for CoW DAO is $170, and there is an idea to use them for the buyback of COW.

Key Points:

MEV Blocker is a new MEV protection solution built by Gnosis Team and Beaver Build. Its idea is that builders perform backruns of user swaps and return a part of these operations’ profit to traders.
At the moment, kickback volumes are quite small ($7.8k), which can be explained by the small number of users or infrequent large swaps of popular tokens that could create a backrun opportunity.

Such a proposal makes a lot of sense, even though the current number of rewards is relatively small. In the past, a large ENS trade was carried out through CoW Swap.
With the launch of MEV Blocker, Gnosis continued to work on MEV-resistant tools.

Our Take: MEV capturing mechanisms have already been discussed for SushiSwap (the YCabal proposal) but were only implemented with a limited feature set. Given the completely new landscape after The Merge, it will be interesting to see where such products go from here.

Euler (EUL)

Proposal: The Future of Euler Protocol

Author: Matt_StableLab

Summary: This discussion focuses on the possible relaunch of Euler after the exploit and the return of funds. The current consensus is that the team needs to wait a while and possibly make significant changes to the protocol.

Key Points:

Euler allowed the creation of lending pools permissionlessly, using Uniswap v3 as an oracle for long-tail assets. On top of that, they had features such as native leverage lending and an innovative liquidation engine based on Dutch auctions.
On March 13, everything changed, and almost $200M was drained from Euler through a vulnerability in an unaudited function. By April 4, the exploiter had returned the stolen funds.

Commentators are actively promoting that after the relaunch, the project needs to launch on BNB and Base chains, as planned before the attack. Another suggestion is a rebranding along with a relaunch after some time.

Our Take: Euler managed to recover all the stolen funds, and now its team can set a precedent for relaunching the protocol after a big exploit. One of the protocols, which lost and returned $600M, restarted quite quickly without rebranding.

MakerDAO (MKR)

Proposal: Proposal for the MakerDAO Treasury to invest in the BENJI token (Franklin OnChain U.S. Government Money Fund)

Author: rgolubov

Summary: Franklin Templeton is proposing a $100M initial allocation of BENJI tokens to be included as a portion of the USDC PSM. This proposal will allow the protocol to get a new source of income, uncorrelated with the crypto market.

Key Points:

BENJI is a tokenized version of shares of Franklin Templeton U.S. Government Money Market Fund that invests in the US government securities.
Previously Franklin Templeton tokenized some of its shares on Stellar (with a 2M+ token supply) and relaunched this product as BENJI with a current supply of 276M tokens.

A week ago, the BENJI token was launched on Polygon.
An open question that still remains is how the tokens will end up with MakerDAO. Will it be a bridged version from Polygon, or will the token also be launched on Ethereum?

Our Take: Despite the swap of 100M USDC to BENJI not playing a significant role in diversifying DAI collaterals, it is still an attractive opportunity to earn income from real-world assets. MakerDAO currently uses 9 RWA assets as collateral and is a pioneer in adopting this asset class.

Votes

Aave (AAVE)

Proposal: [TEMP CHECK] Aave V3 GHO Genesis Parameters

Status: Live.

Created: Apr 29th, 2023.

Ends: May 3rd, 2023.

Leading Consensus: Option A — 283k AAVE (99.17% of total votes).

Summary: This proposal is a temperature check for the community to decide between two options for the genesis parameters of the GHO stablecoin. The difference in the options is how aggressive the go-to-market strategy will be, which should take into consideration the imminent launch of a stablecoin from Curve.

Friends With Benefits (FWB)

Proposal: System Upgrade: Establishing A Software Company

Status: Live.

Created: Apr 29th, 2023.

Ends: May 3rd, 2023.

Leading Consensus: Approve this plan — 7.1k FWB (85.11% of total votes).

Summary: Proposals that change the legal structure of the DAO are pretty rare. In this particular case, it is planned to establish a Software C-Corp and an Unincorporated Nonprofit Association.

Uniswap (UNI)

Proposal: Create v3deployments.uniswap.eth subdomain and populate its text fields

Status: Live.

Created: Apr 28th, 2023.

Ends: May 4th, 2023.

Leading Consensus: For — 16.4M UNI (100% of total votes).

Summary: This proposal will create an ENS subdomain to record all canonical deployments of Uniswap v3. Thus, information about all Uniswap v3 deployments will be available to anyone in a decentralized way and not just through the website UI.