Wintermute DeFi Governance Digest: April 2024 | Week 3

16 APR 2024 | RESEARCH | AUTHORED BY CALLEN

This week’s proposals include Angle Protocol proposing to remove veANGLE’s ability to direct ANGLE emissions, Synapse requesting to lift the 250M SYN maximum supply cap, Radiant Capital requesting to increase the RDNT supply by 50% to support future protocol growth; along with votes from Diva Staking to enable the transferability of DIVA.

Proposals

Angle Protocol (ANGLE)

Proposal: AIP – 90: Revamp ANGLE token emissions

Author: Sogipec

Summary: This proposal requests to end the current programmatic ANGLE token emission schedule and transfer token emission authority to the guardian multisig.

Key Points:

• Since its launch, ANGLE token emissions have been fully transparent and trustless, following a predetermined emission schedule where ANGLE’s inflation rate reduces every week causing a halving every 1.5 years.


• Currently, veANGLE holders can direct these emissions by voting on whitelisted gauges weekly.

• However, contributors to the Angle Protocol believe that such a mechanism is inefficient as ANGLE token emissions are being directed to pools where the cost of capital is high (> 20%).


• This proposal requests to transfer ANGLE token emission authority to the guardian multisig, making the multisig solely responsible for directing new token emissions.


• The multisig will focus on incentivizing pools where the protocol can get the best ROI (TVL and/or liquidity concentration per $ of incentives sent).


• The end goal is to ensure that ANGLE emissions are strictly and rationally controlled and achieve a state where the dollar value of ANGLE issued is less than the revenue generated by the protocol.

Our Take: This is a big change for veANGLE holders who likely locked their tokens knowing they would be able to direct ANGLE token emissions, however, it comes at the benefit of ensuring ANGLE emissions are efficiently spent.

Synapse Protocol (SYN)

Proposal: SYN 2.0 – Major Protocol Upgrade Preparation

Author: Moses

Summary: This proposal requests to remove SYN’s token supply cap to allow for flexibility with upcoming protocol upgrades such as staking, dPOS validator consensus, and expanded token utility.

Key Points:

• The $SYN token has a maximum supply cap of 250M SYN with a circulating supply of ~185M SYN.


• There is currently no hardcoded emission schedule as it is set regularly by the DAO based on protocol objectives.

• However, with the upcoming launch of major protocol upgrades including staking, dPoS validator consensus, expanded token utility, and other protocol upgrades that require high economic security models; this proposal requests to remove the 250M hard cap.


• This will ensure long-term incentives available to promote economic growth and security while allowing the protocol to adapt to changing market conditions based on user demand and protocol needs.


• If this proposal is approved, there will be no immediate change to emissions and any further emissions will still require the DAO’s approval.

Our Take: This is a large change for the DAO to consider and, interestingly, the current gap between circulating supply and total supply is not sufficient for future upgrades.

Radiant Capital (RDNT)

Proposal: RFP-33: Strengthening Foundations for Growth and Innovation

Author: Radiant Capital

Summary: This proposal requests to increase the total supply of RDNT by 50% to support new chain expansions and the launch of Radiant V3.

Key Points:

• The initial 1b max supply and distribution of RDNT was crucial for the rapid adoption of Radiant.


• However, given the dynamic nature of DeFi and the need to adapt as a protocol, this proposal seeks to extend Radiant’s capabilities beyond the initial scope that was envisioned two years ago.

• This proposal requests to increase RDNT’s total supply by 50% to support Radiant V3 and further multi-chain expansion.


• Given the rise of L2s and non-evm platforms, Radiant aims to extend its reach to these emerging platforms to capture new users and liquidity.


• Radiant V3 will feature:

–> Isolated Risk Markets – allowing for the listings of emerging assets such as LSDs, RWAs, NFTs, and trending memecoins.

–> Simple 1-click Long/Short Strategies via Money Market Looping.

–> Reduction in gas fees when claiming RDNT rewards.

–> Dual Emissions – allows for more than just RDNT token incentives for markets.

–> Dynamic Protocol Fee Distributions – increasing lending rates when utilisation is high to restore balance.

• Of the 50% increase in RDNT supply (500M RDNT),

–> 25% (125M) will go towards Dynamic Liquidity Providers (dLPs) streamed over two years.

–> 40% (200M) will be allocated to the RDNT Emissions Reserve for future chain launches and Isolated Risk Markets; vested linearly over 3 years.

–> 35% (175M) will be allocated to the DAO Reserve to fund future contributors, liquidity expansion efforts, and various partner incentives; vested linearly over two years.

Our Take: This is a pretty big proposal for RDNT holders which will result in value dilution, however, RDNT contributors have proven their ability to capture market share on new chains.

Votes

Angle Protocol (ANGLE)

Proposal: AIP – 90: Revamp ANGLE token emissions

Status: Live.

Created: Apr 13, 2024.

Ends: Apr 16, 2024.

Leading Consensus: Against, do nothing – 9.9M veANGLE (99.98% of total votes).

Summary: This proposal requests to relinquish veANGLE holders’ control of ANGLE emissions to the guardian multisig. The multisig will focus on ensuring new ANGLE token emissions are done efficiently, reducing the protocol’s overspending on capital-intensive pools.

Radiant Capital (RDNT)

Proposal: RFP-33: Strengthening Foundations for Growth and Innovation

Status: Live.

Created: Apr 12, 2024.

Ends: Apr 19, 2024.

Leading Consensus: Against – 9.5M RDNT (66.94% of total votes).

Summary: This proposal requests to increase RDNT’s total supply by 50% to support the launch of Radiant V3 and Radiant’s expansion across new chains. The increase in supply will be vested linearly over the next 2-3 years.

Diva Staking (DIVA)

Proposal: [DIP-09] Unlock DIVA token transferability

Status: Pending.

Created: Apr 15, 2024.

Ends: Apr 20, 2024.

Leading Consensus: Pending.

Summary: This proposal unlocks the Diva Staking DAO’s $DIVA governance token. Currently, DIVA is non-transferable restricting its ability to be swapped, traded, or used across the Ethereum ecosystem.