Wintermute DeFi Governance Digest: August 2024 | Week 1
6 AUGUST 2024 | RESEARCH | AUTHORED BY IGOR
This week’s proposals include Compound launching a delegate race to distribute voting power to active delegates and the Uniswap community asking for more fee tiers on Base; along with votes from Lido to launch the delegate platform, and Arbitrum to activate ArbOS 31, as well as agree to take a break from new incentive programs.
Proposals
Compound (COMP)
Proposal: Compound Delegate Race Application
Author: Doo_StableLab
Summary: This proposal suggests a way to improve governance participation by increasing the governance power of chosen delegates. The initial proposal was posted almost two weeks ago, and since then Compound has been in danger because of voter apathy.
Key Points:
- In a similar manner to Uniswap, Compound decided to run a Delegate Race to help proposals get a quorum.
- The idea is to delegate 250k COMP from the treasury using Franchiser contracts.
- All delegates who applied will be scored to get up to 50k COMP, up to 80k COMP total delegation per delegate.
- Active delegates with large delegate power should solve the issue of having 2+ proposals per month that can’t pass quorums.
- It will also help in the case of events similar to the infamous proposal 289, when because of the low governance participation, a vote to transfer 499k COMP from the Comptroller was approved, highlighting the need for more active community involvement.
- As a result, DAO members should have an opportunity to stop any malign proposals and support benign ones.
Our Take: We support the usage of idle protocol assets to improve voter apathy.
Uniswap (UNI)
Proposal: [RFC] [RFC] Proposal to active 2, 3, 4 bps fee-tiers on Base
Author: aadams
Summary: To regain market share on Base, Whetstone Research suggested Uniswap add 2, 3, and 4 bps fee tiers. The activation of this proposal can help Uniswap, and start the fee compression race.
Key Points:
- Aerodrome has a lower fee tier for ETH/USDC in comparison to Uniswap on Base.
- It causes more retail flow to Aerodrome through aggregators, and also attracts MEV bots.
- If Uniswap adds these fee tiers, then it can create a liquidity fragmentation, plus competitors could decrease fees even lower which will increase LP losses.
- Obviously, to go with the proposed idea, some additional work should be done because LP revenue model for these protocols is different.
Our Take: We’re keen to see more potential approaches to competition on the DEX level. And the current one is a good starting point, although not without more research.
Votes
Lido (LDO)
Proposal: Establish a Public Delegate Platform and Delegate Incentivization Program
Status: Live.
Created: Aug 1, 2024.
Ends: Aug 8, 2024.
Leading Consensus: Approve platform & incentives – 15M LDO (100% of total votes).
Summary: In response to issues with passing quorums for on-chain votes and in general to increase governance participation, Lido decided to launch the delegate platform. On top of this, all delegates with 2M+ LDO on the platform could get additional incentives.
Arbitrum (ARB)
Proposal: [Constitutional] ArbOS 31 “Bianca” (Stylus, RIP-7212 Support, Nova Fee Router)
Status: Live.
Created: Aug 1, 2024.
Ends: Aug 15, 2024.
Leading Consensus: For – 9.54M ARB (99.96% of total votes).
Summary: This on-chain vote will update Arbitrum One to ArbOS 31 with various improvements, the largest ones are the activation of Stylus (WASM VM) and support for a new elliptical curve which is more friendly to modern devices, incl. iPhone. The new VM will unlock an opportunity to deploy code on Rust and C++, and in general decrease execution costs.
Arbitrum (ARB)
Proposal: [Non-constitutional] Incentives Detox Proposal
Status: Live.
Created: Aug 2, 2024.
Ends: Aug 9, 2024.
Leading Consensus: For – 33M ARB (81.35% of total votes)
Summary: We previously mentioned this proposal for a break period to analyze the results of current incentive programs before launching new ones.