Wintermute DeFi Governance Digest: October 2024 | Week 4

23 OCTOBER 2024 | RESEARCH | AUTHORED BY CALLEN

This week’s proposals include Optimism enabling onchain treasury execution, Ethena integrating Hyperliquid as a hedging venue, EtherFi allocating up to ~$17.4M in ETHFI incentives towards CEX adoption of weETH, and Astroport deploying vxASTRO 2.0; along with votes from Arbitrum conducting a Treasury token swap program and Uniswap launching a growth program trial.

Proposals

Optimism (OP)

Proposal: Governor Update Proposal #3: Enable onchain treasury execution

Author: Agora

Summary: This proposal requests to upgrade Optimism’s Governor contracts to allow for the onchain execution of treasury proposals.

Key Points:

• While Optimism votes are currently conducted onchain they rely on the Optimism Foundation for execution.


• Agora is proposing to upgrade Optimism’s Governor contracts to allow OP token holders to receive control over the spend/transfer of treasury assets.


• In addition to these changes, a new Timelock contract will be deployed and hooked up to the governor contract, introducing a delay before a successful proposal can be executed.


• The Timelock will have a 3-day delay.


• If approved, the Optimism Foundation will attempt a treasury transfer dry run to make sure the setup is working as intended.


• After the dry run, the Timelock will be funded with OP tokens.

Our Take: We support this proposal as it improves the decentralization of Optimism and finally places some control in the hands of OP token voters.

Ethena (ENA)

Proposal: Hyperliquid Ethena Liquidity and USDe Integration

Author: Shoku

Summary: This proposal requests to integrate Hyperliquid as an eligible venue for Ethena to allocate some of its hedging flow.

Key Points:

• Hyperliquid has seen tremendous growth with over 200k total users, typical daily volumes between $1B-4B, and open interest over $1B.


• So far in October, Hyperqliquid has regularly accounted for roughly 40% of onchain perpetual volumes.

• This proposal requests Ethena to integrate Hyperliquid, making it an eligible venue to direct hedging flow and thus allowing for further expansion of the USDe supply.


• Ethena’s Risk Committee suggests that Ethena will keep their total exposure to 10% or below of Hyperliquid’s OI per asset as an initial rollout.

Our Take: This is a great expansion for Ethena that is onchain and more transparent than their CEX counterparts. Hyperliquid has historically had favourable funding rates for Ethena’s product.

Ether.fi (ETHFI)

Proposal: Incentives on Centralized Exchanges

Author: EtherFi Admin

Summary: EtherFi is proposing an allocation of up to 10M ETHFI tokens to incentivise and support the listing of weETH as collateral on centralised exchanges for perpetual trading.

Key Points:

• ETH Perpetual markets remain one of the highest daily volume markets in crypto, underscoring the strong demand for levered ETH products.


• This is further highlighted by Ethena’s dashboard, indicating ~$300M in ETH LST collateral being used across Binance, Bybit, and Bitget.

• The core objective of this proposal is to expand the use cases of weETH while driving user adoption on CEX platforms.


• To achieve this, up to 10M ETHFI (~$17.4M USD) will be allocated to support the listing and usage of weETH on the Top 10 CEXs.

Our Take: This is a great avenue for expansion for weETH especially in a time where CEXs seem to be more receptive to onboarding large DeFi assets with inherent yield opportunities.

Astroport (ASTRO)

Proposal: Deploy vxASTRO

Author: Donovan

Summary: This proposal requests to deploy the long-awaited vxASTRO 2.0 implementation for Astroport across Neutron, Terra, Osmosis, Injective and Sei.

Key Points:

• vxASTRO 2.0 marks the next phase of Astroport’s evolution, introducing new tokenomics that addresses several concerns and introduces new improvements.


• vxASTRO (Voting Escrowed xASTRO) was inspired by veCRV and gives ASTRO holders the ability to lock up their staked tokens (xASTRO) in exchange for boosted LP rewards and governance power of emissions decisions.

• However, vxASTRO 2.0 introduces some new changes, specifically, vxASTRO can be locked for an indefinite amount of time with a minimum lockup of 2 weeks.

–> xASTRO and vxASTRO will have 1:1 voting power on general governance decisions, however, vxASTRO will have full control over ASTRO emissions.

–> LPs who hold vxASTRO will no longer receive boosted ASTRO emissions.

–> The launch will also see the introduction of a vote market called “Tributes” where any protocol can provide external incentives to vxASTRO voters in exchange for ASTRO emissions.

• Clearly, the largest difference between the traditional veToken system is that there are no long-term lockups and the centralisation of voting power is reduced by eliminating the LP boost.

Our Take: vxASTRO 2.0 has been a long time coming and we look forward to seeing it in action and its effect on attracting liquidity across various IBC chains.

Votes

Arbitrum (ARB)

Proposal: [Non-Constitutional] Arbitrum Token Swap Pilot Program

Status: Live.

Created: Oct 18, 2025.

Ends: Oct 25, 2025.

Leading Consensus: Against – 65M ARB (58.32% of total votes)

Summary: This proposal requests to establish an Arbitrum Token Swap Pilot Program which will conduct a treasury swap with selected and eligible protocols within the Arbitrum ecosystem. The idea is that Arbitrum should capture the upside of the protocols it helps promote and grow through various incentive programs while creating increased alignment.

Uniswap (UNI)

Proposal: Uniswap Growth Program Trial

Status: Finished.

Created: Oct 17, 2024.

Ends: Oct 22, 2024.

Leading Consensus: In support – 33M UNI (98.48% of total votes).

Summary: This proposal requests to establish the Uniswap Ecosystem Incentives Initiative and onboard AlphaGrowth to conduct marketing and growth efforts, and secure ecosystem grants for Uniswap. This is a 6-month trial program with an estimated total cost of $420k USD.