DeFi Governance Digest: 25 Apr 2023

Proposals

Uniswap (UNI)

Proposal: Deploy Uniswap v3 on Moonbeam (2023)

Author: AbdullahUmar

Summary: The proposal suggests deploying Uniswap v3 to Moonbeam after the recent BSL expiration. This presents an opportunity to discuss the details of new v3 official deployments.

Key Points:

At the beginning of the month, Uniswap’s v3 business license expired, which created an opportunity for projects to fork the v3 code and add support for concentrated liquidity.
For this reason, actions have been taken to understand which future v3 deployments will fall directly under the Uniswap umbrella and be governed by UNI.

Previously, the deployment on Moonbeam had already been greenlighted, but Nomad didn’t do anything due to the exploit of their bridge.
This time, GFX Labs will be responsible for the deployment, and Wormhole will be used as a bridge.

Our Take: The current proposal discusses the first deployment after the business license expiration of a significant DeFi protocol. To a certain extent, we believe that proposal can create the initial form of the protocol’s multi-chain strategy after the end of the license.

ENS (ENS)

Proposal: [Draft] Approval of ENS Name Normalization Standard

Author: raffy

Summary: This proposal aims to approve updating the used Unicode standard to normalize emoji sequences. If accepted, it’ll reduce the amount of domain spoofing and increase user security.

Key Points:

Domain spoofing is pretty usual in Web2, for example, someone can send a person a link to coinbаse.com (‘a’ is Cyrillic in this case), and a victim will expose login credentials for Coinbase.
Using ENS now, fraudsters can just as well impersonate another person whose ENS is public.

The proposed standard will be relatively backward compatible, as only 1% of current ENS domains require normalization.

Our Take: A large number of scams are launched using fake tokens from large projects, and the ability to have a spoofed ENS can instill more confidence. In addition to protection against spoofing, this proposal will also give consistency in different UIs, which will improve the user experience.

Abracadabra (SPELL)

Proposal: [RFC] — Implement Chainalysis Crypto Incident Response Plan for Abracadabra’s Smart Contracts

Author: Arnone

Summary: This proposal requests to adopt Chainalysis Incident Response to protect Abracadabra in the event of a hack or exploit.

Key Points:

If last year’s bridges were the main target of exploiters, we see an increased number of attacks on various DeFi projects this year.
Several recent attacks (Euler, Sentiment) have shown that it is possible to negotiate with attackers, but projects usually need some leads leading to them.

War rooms help only with post-mortem and vulnerability patching, while the tracking of the attacker concerns the team or independent investigators.
Recently, Chainalysis also entered this market through a partnership with Morpho.
For $100k, Abracadabra will implement a multi-year CIR protection plan.

Our Take: Protocol security is important not only before deploying a new version of its contracts but also regularly, as new attack vectors may be found (read-only reentrancy) or minor updates may contain a bug. Usually, additional security is achieved through a bug bounty or insurance, so the new approach to this issue is quite interesting.

Votes

GMX (GMX)

Proposal: GMX V2: Chainlink Oracles

Status: Live.

Created: Apr 18th, 2023.

Ends: Apr 25th, 2023.

Leading Consensus: For — 1.6M GMX (96.19% of total votes).

Summary: Seeing the upcoming launch of v2, GMX proposes to use new Chainlink low-latency oracles in exchange for 1.2% of the protocol fees. The current design uses a FastPriceFeed most of the time, which receives prices from Binance, Bitfinex, and Coinbase using keeper bots.

dYdX (DYDX)

Proposal: DIP 22 — Increase Maximum Funding Rates (8h) to 4% and Fix Data Bug in the V3 Perp Contract

Status: Finished.

Created: Apr 18th, 2023.

Ends: Apr 23rd, 2023.

Leading Consensus: For — 78.6M DYDX (100% of total votes).

Summary: This proposal will fix a data availability issue and increase the maximum funding rate to 4%. In some cases, the current maximum rate does not allow dYdX v3 to effectively converge perpetual market prices with spot market prices.

PancakeSwap (CAKE)

Proposal: Discussion Proposal for CAKE Tokenomics v2.5

Status: Finished.

Created: Apr 19th, 2023.

Ends: Apr 21st, 2023.

Leading Consensus: ❌– No, keep 6.65 CAKE/block for Syrup Pool emissions. — 289M CAKE (56.42% of total votes).

Summary: This proposal is a temperature check for the community to decide if PancakeSwap should reduce the CAKE inflation after the launch of PancakeSwap v3. Due to the popularity of not decreasing the current inflation, the project team will likely come up with other ways to achieve this goal over time.