Proposals

MakerDAO (MKR)

Proposal: Introduction of Smart Burn Engine and Initial Parameters

Author: Rema

Summary: MakerDAO’s Risk Core Unit Team are introducing a new Smart Burn Engine which allocates excess Dai from the Surplus buffer to acquire MKR, pairing it with additional DAI, and supplies both tokens to a Univ2 DAI/MKR market as Protocol Owned Liquidity (POL).

Key Points:

• The current Smart Burn Engine acquires MKR with excess DAI and subsequently burns the MKR in pursuit of creating constant buy pressure for MKR.
• The new proposed Smart Burn Engine uses excess DAI to purchase MKR and provide MKR/DAI liquidity to a Uniswap V2 pool. The acquired LP tokens are then sent to a protocol-owned address.

• This effort will lead to greater on-chain liquidity for MKR and more productive use of excess Dai reserves.
• The protocol will only begin to acquire MKR when the amount of DAI in the surplus buffer is greater than 50M + 5000 DAI (configured trade amount).
• The expected annual rate of MKR accumulation is 100M DAI per annum, however, given that MKR is paired with additional DAI, 200M DAI will be required.
• Importantly, the smart contract that executes the acquisition of MKR will need to be adjusted for changing gas prices and market conditions.
• With the recommendation configuration and assuming the surplus buffer is greater than 50.005M DAI, the protocol will begin buying 5000 DAI every 26.28 minutes within a 2% price range of the specified MKR Oracle price.

Our Take: Switching to a buy-and-POL model is a far more productive use of excess DAI. Not only will it improve on-chain liquidity, but the DAO is expected to own ~$200M of productive assets per year.

Mantle/BitDAO (MNT/BIT)

Proposal: Mantle x Lido strategic collaboration

Author: Seraphim

Summary: This proposal requests to allocate 40k ETH from the BitDAO treasury to stETH and bootstrap stETH DEX liquidity/integrations across Mantle L2. In exchange, BitDAO will receive a portion of revenue from its stETH on top of native stETH rewards.

Key Points:

• BitDAO has ~265k ETH in its treasury with a total treasury size of ~$3.4b USD.
• This proposal requests to allocate 40k ETH from their treasury to stETH and establish a strategic partnership with Lido.

• Not only will Mantle/BitDAO begin earning ETH staking rewards, but Lido is also proposing that the DAO will receive 35% of the revenue Lido collects from the 40k stETH for the next 12 months.
• It’s expected that the 40k stETH will be used to bootstrap liquidity across prominent DEXes that launch on Mantle L2.
• If successful, Lido will begin to develop a gasless bridging solution for stETH to Mantle L2.

Our Take: This proposal provides a solid stepping stone for Mantle to develop their ETH LST ecosystem. Being able to bootstrap DEX liquidity from very early on will enable other DeFi legos such as Aave, furthermore, the DAO will begin earning native ETH rewards on 40k ETH is roughly 15% of BitDAO’s total ETH balance.

Optimism (OP)

Proposal: Enable aOP as A Votable Token in Optimism’s Governance

Author: Fig (Flipside Crypto)

Summary: This proposal requests to count OP deposited as collateral in Aave as a votable token in Optimism’s Governance.

Key Points:

• Currently, only native OP is supported through Optimism’s Governance module and therefore is the only form of OP allowed to be used as voting power.
• This proposal requests to add the aOP token (OP deposited into Aave) into Optimism’s Governance infrastructure, including, Agora, Snapshot, Tally, Boardroom, and Discord.

• If approved, 227.79k OP supplied by 1,186 unique users will be unlocked for voting.
• It will also provide current active OP voters with greater utility for their OP tokens.

Our Take: Retaining governance voting power while being able to participate in DeFi adds great utility to a token. However, there are concerns with inflated token supply when accepting collateral receipt tokens within the voteable supply.

Votes

Venus Protocol (XVS)

Proposal: Update to Venus Protocol Tokenomics (3.1)

Status: Finished.

Created: June 21, 2023.

Ends: June 22, 2023.

Leading Consensus: For — 880k XVS (96.97% of total votes).

Summary: This proposal introduces new changes to the distribution of protocol revenue. Specifically, interest revenue will be redistributed as 40% Risk Fund, 40% Treasury Reserve, 10% XVS Vault Rewards (Buyback), and 10% Venus Prime Token Program. While liquidation revenue will be redistributed as 50% Risk Fund, 40% Treasury Reserves, and 10% XVZ Vault Rewards. Lastly, XVS vault rewards will receive 2x the current amount of XVS per day (from 525 to 1050) and the Venus Prime program revenue allocation will be reduced to 10% of product revenues from 20%.

Lido (LDO)

Proposal: Tiered Rewards Share Program: A Sustainable Approach to stETH Growth

Status: Live.

Created: June 23, 2023.

Ends: June 30th, 2023.

Leading Consensus: For — 30M LDO (100% of total votes).

Summary: If approved, this proposal will introduce a new rewards referral program targeted at growing stETH supply by rewarding large Lido ETH depositors. The program will be managed by the Rewards Share Committee.

Synthetix (SNX)

Proposal: V3 SNX Staking Pool

Status: Finished.

Created: June 22, 2023.

Ends: June 25, 2023.

Leading Consensus: sYes — 8 SNX-SCT (100% of total votes).

Summary: Due to the complexity that comes with current SNX staking (i.e., managing debt positions, being exposed to the market etc.), the team believes there is hesitation from SNX holders from staking their tokens. As a result, the proposal introduces a simple SNX staking pool that does not have market exposure. The new staking pool will initially receive SNX rewards in a trial period and is expected to receive a portion of trading fees in the future.