Proposals

Osmosis (OSMO)

Proposal: Introduce a Protocol Taker Fee for Osmosis swaps

Author: White Marlin Staking

Summary: Introduce a default 0.15% protocol taker fee on top of Osmosis DEX swap fees and distribute collected fees to OSMO stakers and the Osmosis community pool.

Key Points:

• This proposal requests to introduce a 0.15% taker fee on top of current/future liquidity pool fees, making swaps more expensive for users.
• This is different from most DEXs who activate a fee switch that keeps trading costs the same for users and instead takes a percentage of liquidity provider fees.

• The taker fee parameter will be controlled by governance and can be reduced on pools to ensure competitiveness (e.g., stablecoin swaps).
• For multi-hop swaps, the new taker fee will be charged on all pools.
• Given the wide range of listed assets and pools, the fees collected from such a change would result in many tokens.

Therefore, it is proposed that:

• All fees collected in OSMO are to be burned, removing this OSMO from the supply.
• Of all fees paid in other assets, 67% are to be distributed to OSMO stakers (subject to validator commission rewards).
• The remaining 33% of non-OSMO fees are to be converted to one of Osmosis’s whitelisted quote assets and then deposited into the Osmosis community pool.

With the introduction of a taker fee, Osmosis will be able to introduce fee reduction mechanisms such as:

• VIP programs to reduce fees based on trading volume.
• Fee reductions based on OSMO staked amounts.
• Fee rebates for referral systems (a portion of protocol fees from a user’s trading activity is shared with their referrer).

Our Take: The introduction of a protocol fee that is passed directly onto users is an interesting experiment that differs from common mechanisms that take this fee from liquidity providers. It will be important for Osmosis to keep an eye on the taker fee’s effect on trading volume.

GMX (GMX)

Proposal: GMX Multiplier Points

Author: Coinflipcanda

Summary: This proposal introduces 2 possible changes to multiplier points to address diminishing governance power and fee reward share for new stakers who have yet to accumulate multiplier points.

Key Points:

• Multiplier Points (MPs) are accrued over time for users who stake GMX and are intended to encourage long-term staking by giving stakers increased governance power and fee earnings.
• Multiplier Points currently accrue at a rate of 100% APR for both GMX and esGMX staking, however, users who decide to unstake GMX have a proportionate amount of their MP burnt.

Across Arbitrum and Avalanche, the current balance of staked tokens on GMX are:

• GMX 6.73M (42.2%)
• esGMX 1.77M (11.1%)
• MPs 7.44M (46.7%)
• This implies that nearly 50% of all fee distributions sent to GMX stakers are accruing to MPs, creating a highly unfavourable environment for new GMX stakers who wish to accrue fees and governance power.

In order to create a more sustainable and inviting environment for new stakers, this proposal introduces 2 potential changes:

• Adjust the APR accrual of MPs to 50% from 100%. This will lower the rate of governance power dilution and protocol fee share for new users.
• Implement a cap on MPs such that users at the upper limit no longer accrue multiplier points while new users are able to begin accruing MPs and improving their share of governance power and fee share.

• Option 2 would also force users at the upper limit to purchase more GMX from a different wallet and begin staking to continue accruing MPs.

Our Take: GMX’s Multiplier Points system has seen great success in incentivizing long-term stakers, however, we do agree that it discourages new users from entering the system.

Lido (LDO)

Proposal: Stake all Treasury ETH in Lido

Author: Steakhouse

Summary: Steakhouse is proposing to deposit 20,304 ETH from Lido’s Treasury into stETH.

Key Points:

• Steakhouse (a contributor to Lido’s Finance Workstream) has proposed to deposit 20,304.357 ETH from Lido’s Treasury into stETH.
• This will increase the amount of ETH staked with Lido by ~0.29%.

• With an expected annual yield of 4–6%, the deposit into stETH is expected to generate ~$2M in revenue for the protocol. This is equivalent to one more month of runway for Lido.
• Building a core treasury in productive assets is expected to safeguard against risk and help offset operating expenses for protocol development.
• If stETH < 0.98 ETH, stETH will be bought on the market instead of directly staking the ETH.

Our Take: The shift to productive treasury assets is an ongoing theme among protocols as they actively try to cover operation costs. One concern with this proposal is that it introduces a high protocol correlation risk which could result in significant losses if an adverse event were to occur.

Votes

Curve (CRV)

Proposal: Increase crvUSD Debt Ceiling and Add wstETH Market

Status: Live.

Created: June 1, 2023.

Ends: June 8, 2023.

Leading Consensus: Yes — 496M veCRV (100% of total votes).

Summary: Deploy wstETH market with 150M crvUSD debt ceiling and increase PegKeeper limits to 25M crvUSD each.

dYdX (DYDX)

Proposal: Launch dYdX Operations subDAO V2

Status: Live.

Created: June 1, 2023.

Ends: Jun 5, 2023.

Leading Consensus: Yes — 18M DYDX (100% of total votes).

Summary: The dYdX Operations subDAO is requesting $6.6M in funding for the next phase of the Operations subDAO. The next phase including hiring an Operations Lead, Technical Project Lead, and a Site Reliability Engineer who will be responsible for helping decentralize the launch of dYdX v4.

1inch (1INCH)

Proposal: Discontinue Swap Surplus Collection

Status: Ended.

Created: May 29, 2023.

Ends: June 3, 2023.

Leading Consensus: Yes — 18M Unicorn Power (96.17% of total votes).

Summary: This proposal ratifies removing the DAO’s ability to collect Swap Surplus that occur from trades on 1inch. Moving forward, the Swap Surplus will be redirected back to users on the platform.