Wintermute DeFi Governance Digest: September 2024 | Week 1
2 SEPTEMBER 2024 | RESEARCH | AUTHORED BY CALLEN
This week’s proposals include Morpho discussing the transferability of their token, Threshold proposing to merge with WBTC, and Aave developing a GSM that supports integration with BlackRock’s BUIDL; along with votes from GMX to launch GMX Liquidity Vaults (GLV) and Uniswap launching round 2 of their Delegate incentivization program.
Proposals
Morpho (MORPHO)
Proposal: Inviting the Morpho Community to Discuss Transferability
Author: Morpho Association
Summary: This proposal requests discussion around enabling the transferability of the MORPHO token to further advance Morpho’s mission of making financial infrastructure a public good.
Key Points:
- On July 15, 2022, the Morpho Association deployed the MORPHO token as a non-transferable asset.
- Non-transferability enabled the Morpho DAO to grow the Morpho Protocol and allow users and contributors aligned with Morpho’s long-term vision to gain ownership of the network.
- Since then, a considerable amount of MORPHO has been distributed to users, strategic partners, risk curators, and more, with over 2,000 wallets holding MORPHO.
- Furthermore, Morpho’s active contributors have grown substantially and there are over 20 third-party front-ends, applications, and products.
- This proposal now requests the community to decide whether it’s an appropriate time to enable transferability for the MORPHO token.
Our Take: Morpho has seen great growth and adoption while attracting a diverse set of users, risk curators, contributors, and integrations. Enabling the transferability of MORPHO will allow the protocol to transition into its next growth phase.
Threshold (T)
Proposal: #saveWBTC – a merger with Threshold’s tBTC
Author: Maclane
Summary: This proposal requests to mint an additional 15% of the T supply (~$36.4M) to BitGo to formalize a merger with WBTC, given their recent changes in custody.
Key Points:
- Recently, BitGo announced its plan to transfer control of the WBTC product to a joint venture with BiT Global to expand the jurisdictional and institutional custody of the underlying BTC.
- This announcement has proven controversial due to the involvement of Justin Sun, with many in the ecosystem, expressing concern over his “affiliated projects show worrying signs of possible misappropriation” of collateral.
- This proposal requests to merge with BitGo by granting them 1,655,250,000 T tokens (~$36.4M), minted by the Threshold DAO, in exchange for WBTC minting/redeeming privileges.
- This would make BitGo the largest stakeholder in the Threshold Network.
- The merger essentially transitions WBTC’s current mint/redeem infrastructure to Threshold’s decentralized infrastructure which involves removing all other Merchants.
- All WBTC DAO privileges (e.g., freeze function, etc) will be transferred to the Threshold DAO, tBTC minting will be disabled, and all existing WBTC TVL will be migrated to Threshold’s decentralized custody.
Our Take: Threshold’s proposal introduces some nice decentralization properties to WBTC, however, significantly reduces BitGo’s authority over the product.
Aave (AAVE)
Proposal: [Temp Check] BUIDL GSM
Author: Aave Labs
Summary: This proposal requests to build and deploy a GHO Stability Module (GSM) to support BlackRock’s BUIDL infrastructure.
Key Points:
- The GHO Stability Module (GSM) is designed to ensure the stability of GHO in scenarios of increasing or decreasing demand. It effectively provides a 1:1 swap between GHO and other assets in the stability module.
- In the case of GHO:USDC this can result in a surplus of USDC that remains idle as users swap from USDC to GHO./li>
- Aave Labs proposes to build a new instance of the GSM that supports external integrations related to control mechanisms, specifically supporting BlackRock’s BUIDL.
- BUIDL is deployed on the Ethereum Network and provides onchain access to traditional finance assets which are managed by BlackRock and have over $500M in issuance.
- BUIDL is priced at $1 per token and pays daily accrued dividends directly to holders in the form of new tokens each month.
- By integrating BUIDL into a GSM, the Aave DAO can begin expanding into RWA yield sources.
Our Take: This is a great integration for Aave, allowing the DAO to directly capture RWA yields outside of just the current DeFi market.
Votes
GMX (GMX)
Proposal: Implementation of GMX Liquidity Vaults (GLV) for Enhancing Liquidity
Status: Live.
Created: Sep 1, 2024.
Ends: Sep 4, 2024.
Leading Consensus: For – 51k GMX (99.99% of total votes)
Summary: This vote requests to implement GMX Liquidity Vaults (GLV) that offer a new way for users to easily provide liquidity to GMX across multiple pools, using a single vault instead of individually separate pools.
Uniswap (UNI)
Proposal: Uniswap Delegate Reward Initiative – Cycle 2
Status: Live.
Created: Aug 27, 2024.
Ends: Sep 3, 2024.
Leading Consensus: For – 35.87M UNI (100% of total votes)
Summary: This onchain vote establishes round 2 of the Uniswap Delegate Reward Initiative that aims to reward up to 15 eligible delegates. Each eligible delegate will be able to earn up to $6K USD in UNI per month.