Wintermute DeFi Governance Digest: February 2023 | Week 2

14 FEB 2024 | RESEARCH | AUTHORED BY CALLEN

This week’s proposals include Aura Finance approving a franchise called Hyperlock on Blast, dYdX lowering their proposal threshold, GMX reducing the growth rate of Multiplier Points; along with votes from Pyth to ratify the Pyth DAO constitution, Jito reducing the voting quorum and delegating 12M JTO to delegates, and Uniswap recognizing canonical V2 deployments on all chains where V3 is deployed.

Proposals

Aura Finance (AURA)

Proposal: [RFC] Hyperlock – an Aura Franchise

Author: Philjfry

Summary: This proposal seeks to ratify Hyperlock as the first Aura DAO franchise. Hyperlock is a meta-governance and yield-boosting layer for Thruster – a DEX on Blast.

Key Points:

• Hyperlock is a meta-governance protocol, yield-booster, and liquidity marketplace built on top of the Thruster – a DEX on Blast.


• To bootstrap liquidity and scale quickly, Thruster will be launching with a veToken system (veTHRUST).

• Similar to Aura Finance, Hyperlock will aim to aggregate veTHRUST and pass back its value to Hyperlock users i.e. Boosted LP yields, voting rights, and protocol fees.


• Hyperlock will be developed and managed by Aura contributors and a separate foundation entity.


• This includes leveraging Aura’s smart contract base, front-end elements, brand association, and a loan of ~$200k from the Aura DAO to cover critical operations.


• In return, vlAURA holders will receive HYPER tokens, a share of HYPER’s supply streamed over 3 years to the Aura DAO, liquidity incentives for HYPER/AURA v3 farms on Thruster, and a share of protocol fees collected on Hyper.

Our Take: This is an interesting mix of DeFi Lego layers at the inception of Blast’s mainnet launch. We looking forward to seeing their effects on liquidity bootstrapping and Hyperlock’s dominance over time.

dYdX (DYDX)

Proposal: [DRC]: Parameter Change – Reduce minimum proposal deposit amount and Increase maximum deposit period

Author: Kam

Summary: Chorus One is proposing to reduce the current minimum deposit amount for creating proposals on DYDX from 10,000 to 2,000 DYDX and extending the minimum deposit period from 2 days to 7 days, as the current 2-day period may be too short for community members to meet the new minimum requirement.

Key Points:

• Currently, the dYdX Chain requires a deposit of 10,000 DYDX (~$28,600) for a proposal to be created; a rather large amount for most community members.


• As a result, there has been a lack of on-chain participation from users who either cannot afford to create a proposal but also from larger DYDX holders who prefer to stake such a large amount.


• Therefore, this proposal requests to reduce the proposal threshold from 10,000 DYDX to 2,000 DYDX making it easier and more attractive for anyone to create proposals.


• Furthermore, this proposal also requests to increase the max deposit period from 2 days to 7, giving community members more time to create a proposal with the help of others.

Our Take: We support the reduction in the proposal threshold. There are currently only a few unique proposers in the dYdX Ecosystem and hopefully, such a change will improve this metric.

GMX (GMX)

Proposal: Reduce APR of Multiplier Points

Author: Seraph

Summary: This proposal requests to adjust the growth rate of Multiplier Points on GMX, making GMX’s base fee more attractive to new users and adding additional activities to earn Multiplier Points.

Key Points:

• Last year, the GMX community voted on capping the total boost a user can get from Multiplier Points (MP) at 200%. The goal was to make investing in GMX and staking GMX more attractive to new users.


• This proposal continues such discussion and goals by now adjusting the rate at which MPs accrue to GMX stakers.

• Currently, MPs accrue at a 100% APR for GMX and esGMX staking in order to incentivise long-term staking. However, given GMX’s growth, maturity, and evolution as a protocol, maybe it’s time to adjust the growth rate of MPs to make the base rate more attractive.


• This proposal provides 3 options:

–> Reduce APR to 75%

–> Reduce APR to 50%

–> Retain the current 100% APR

• A reduction in the growth rate of MPs will allow for better base yields for GMX stakers and make acquiring GMX more attractive.


• Furthermore, the reduction will align better with incentivizing additional activities that will begin to earn MPs in the future such as trading, providing liquidity, referrals/front-end integration, and potentially other developer activities.

Our Take: GMX has seen tremendous growth and is beyond the bootstrapping stage. A heavy reduction in the growth rate of MPs should certainly make GMX’s base yield from staking a lot more attractive for new GMX holders.

Votes

Pyth (PYTH)

Proposal: Ratification of the Pyth DAO Constitution

Status: Ended.

Created: Feb 7, 2024.

Ends: Feb 14, 2024.

Leading Consensus: Yes – 627.7M PYTH (99.9% of total votes).

Summary: This onchain vote ratifies the adoption of the Pyth DAO Constitution – a decision framework for the Pyth DAO and governing framework for $PYTH holders. The Constitution contains the creation of a Pythian Council and a Price Feed Council and their responsibilities; along with the proposal process, token holder powers, community values, and the council election process.

Jito (JTO)

Proposal: Modifying JTO Quorum & Delegating 12 Million Token Voting Power

Status: Finished.

Created: Feb 8, 2024.

Ends: Feb 11, 2024.

Leading Consensus: Yes – 103.8k JTO (100% of total votes).

Summary: This vote requests to change Jito’s proposal quorum to 10M JTO from 30M JTO to execute proposals. Given this quorum is still rather high due to technical requirements on Realms, the Jito Foundation plans to delegate 12M JTO in Voting Power to upwards of 20 or more delegate applicants.

Uniswap (UNI)

Proposal: Deploy Uniswap V2 on all chains with V3

Status: Live.

Created: Feb 11, 2024.

Ends: Feb 17, 2024.

Leading Consensus: For – 25.8M UNI (100% of total votes).

Summary: This vote ratifies the canonical recognition of Uni V2 deployments on all chains where Uni V3 has been deployed. There is currently only one recognized canonical deployment of Uni V2 which is on Ethereum Mainnet.