Proposals

Threshold (T)

Proposal: TIP 54: tBTC & T, better together

Author: mhluongo

Summary: This proposal introduces a buyback-and-make model for T and tBTC, as well as an updated tBTC fee program to optimize for growth.

Key Points:

• Currently, T stakers are responsible for decentralizing the custody for tBTC and in return, they earn ~15% APY on their staked principal.
• tBTC users are charged a 0.2% fee every time tBTC is minted or burnt. These fees are transferred to the DAO’s treasury and controlled by governance.

• However, there has been no real direction as to what to do with the accrued revenue.
• This proposal requests to introduce a buyback-and-make model that takes all accrued tBTC fees and posts a single-sided liquidity position into a T/tBTC pool (80/20 T/tBTC), effectively buying back T.
• As tBTC fees grow, more T is bought back and locked into a DAO-owned LP position, deepening liquidity for both T and tBTC.
• In order to grow tBTC and subsequently, protocol fees. This proposal requests to lower the tBTC minting fee to 0.1% from 0.2%.
• Furthermore, a minting/redemption fee rebate will be introduced where users will receive a rebate in T based on their 30-day minting/redemption volume.

• An initial 13M T will be allocated for the fee rebate program.

Our Take: Utilizing protocol fees to improve on-chain liquidity for both T and tBTC while earning swap fees is a great move. Furthermore, the rebate program helps in undercutting existing competitors and offering one of the cheapest venues for minting and redeeming native BTC on Ethereum Mainnet.

MakerDAO (MKR)

Proposal: Request for GOV12.1.2 edit to the stability scope to quickly implement Enhanced DSR

Author: Rune

Summary: This proposal requests to fast-track the implementation of the Enhanced Dai Savings Rate (EDSR) to improve utilization.

Key Points:

• The Enhanced Dai Savings Rate is a system that temporarily increases the effective DSR available to users when DSR utilization is low.
• The enhanced rate is based on both the current savings rate as well as the DSR utilization rate. As utilization increases, the enhanced rate will decrease.

• EDSR is a one-time, one-way temporary mechanism, meaning it can only decrease over time and cannot increase even if utilization goes down.
• This change comes from the lack of sustained growth in demand for DAI and is expected to spur DSR integration across other DeFi protocols, providing greater access to the wider DeFi ecosystem.

• Ultimately, the goal of EDSR is to attract a larger user base who are willing and ready to farm subDAOs and participate in larger Endgame offerings.

Our Take: Should this change be approved, the EDSR will be among the highest and arguably safest options for users to farm yield on a stablecoin. As a result, we expect a large increase in demand from both users and protocols who are able to integrate DSR.

Cosmos (ATOM)

Proposal: Signaling Proposal: Add the Fee Abstraction Module to the Cosmos Hub

Author: RoboMcGobo

Summary: This proposal requests to implement a fee abstraction module developed by Notional Ventures into Cosmos, allowing for non-native transaction fees on Cosmos.

Key Points:

• The fee abstraction model was developed by Notional Ventures and funded by the Osmosis Grants Program, as a method of solving fee abstraction issues in the Cosmos Ecosystem.
• With Replicated Security live, ATOM stakers will continue to receive an ever-growing set of different tokens from transactions paid on consumer chains; many of these rewards will be small and not worth the fee to swap them.

• To solve this, the Abstraction Fee Module would allow transaction fees to be paid in IBC assets instead of ATOM and use the tokens from the transaction fees to buy ATOM and distribute them to ATOM stakers.
• However, this module would only support tokens that have a liquidity pool on Osmosis.
• All non-ATOM transaction fees will be pooled together into a contract and exchanged into ATOM via Osmosis using an exchange rate determined by a 1-hour TWAP. The subsequent bought ATOM will then be dispersed to ATOM stakers.

Our Take: This module introduces a novel mechanism that allows users to pay transaction fees in IBC assets rather than solely ATOM. While the added buy pressure to ATOM is an interesting benefit, arguably a more compelling benefit is that onboarding assets to Cosmos will no longer require ATOM to perform transactions.

Votes

Ribbon Finance (RBN)

Proposal: RGP-33: Merge Ribbon Finance into Aevo

Status: Live.

Created: July 18, 2023.

Ends: July 25, 2023.

Leading Consensus: Yes — 13M RBN (99.67% of total votes).

Summary: This vote ratifies the merging of Ribbon Finance into Aevo, transferring Ribbon’s DOV functionality, rebranding Ribbon under Aevo, and migrating the token from RBN to AEVO on a 1:1 basis.

Balancer (BAL)

Proposal: BIP-371: Adjust Protocol Fee Split

Status: Live.

Created: July 21, 2023.

Ends: July 25, 2023.

Leading Consensus: Yes — 468k veBAL (100% of total votes).

Summary: This proposal ratifies the protocol revenue split for the DAO Treasury and veBAL holders. Specifically, L1/L2 core pools: 50% bribes (voting incentives), 32.5% to veBAL holders, 17.5% to the DAO treasury, and L1 non-core pools: 82.5% to veBAL holders and 17.5% to the DAO treasury.

Aave (AAVE)

Proposal: [TEMP CHECK] GHO Stability Module

Status: Finished.

Created: July 20, 2023.

Ends: July 23, 2023.

Leading Consensus: YAE — 593k AAVE (100% of total votes).

Summary: This proposal requests the approval of introducing a Peg Stability Module for GHO. The GHO Peg Stability Module will include controllable debt ceilings, exogenous asset listings, pricing strategies, price bounds for swap freezes, and a capital allocator.

1inch (1INCH)

Proposal: [1IP-33] Implement Dynamic Fusion Mode Resolver Whitelist Based on Unicorn Power Threshold

Status: Finished.

Created: July 19 2023.

Ends: July 24, 2023.

Leading Consensus: Yes — 8.7M UP (81.23% of total votes).

Summary: This proposal ratifies a dynamic whitelist for Fusion Mode Resolvers. Resolvers will become whitelisted once their delegated UP (Unicorn Power) is greater or equal to 10% of the network’s total Unicorn Power. It’s expected that the change will improve competition amongst Resolvers and provide more efficient prices for users.