DeFi’s newest power player: Universities
The Tally Newsletter, Issue 86
Welcome back to the Tally Newsletter, a weekly publication focused on DeFi and DAO governance. We’ll keep you updated on key proposals, procedural changes, newly launched voting systems, and shifting power dynamics in the Tally ecosystem. We’ll also recommend the most important reads and listens of the week to ensure you’re an informed citizen of web3.
I’m coolhorsegirl, a DeFi native excited to bring you the latest, weekly. With prior experience at Index Coop and across the defi ecosystem, I’m interested in DAO governance and general DeFi innovation aimed at maximizing decentralization.
This week, we’re diving deep into DeFi’s recent trend: University student groups receiving massive governance delegation from VCs. In fact, a16z just announced that 6 of their 7 delegates in their first cohort for Optimism would be university groups. A million tokens (per delegate) is a lot of power, and some question whether uni groups are the right delegates for the job. Let’s get into it.
🤿 Deep Dive: DeFi’s newest power player: Universities
Universities are becoming some of the most active participants in DeFi governance. More recently, they’re becoming some of the most powerful.
Last week, Ross Shuel announced a16z’s very first cohort of Optimism delegates, each of whom will receive 1 million OP. 6 of the 7 delegates are student university groups from Northeastern University, Purdue, University of Southern California, Carnegie Mellon, Georgia Tech, and North Carolina A&T. The final delegate is GFX Labs. This strong lean towards university groups marks a continued trend toward reliance on university groups in governance. One thing I found interesting: the delegation includes no university groups outside the States. (They certainly exist, at least in the UK…)
The VC powerhouse used a rubric to assess potential delegates. Key to successful delegation is commitment to voting (yes, voter apathy is a thing in DeFi) and background/expertise, each specific to the protocol that’s tokens would be delegated.
Nearly 2 years ago now, Messari’s Jack Purdy tweeted about a rise in delegation to university group in Uniswap protocol. Then, of the 15 largest voters on a Uniswap proposal, 6 were Universities. Coindesk reported on the phenomenon in October.
University groups’ recent rise in power is not free from criticism mostly around perceived bias and lack of experience experience. Some fear they promote the interests of certain stakeholders at the expense of others due to their often limited scope. Twitter keyboard warriors also argue that these students are not experienced enough to make informed decisions on complex governance issues and that their participation in governance voting could lead to unintended consequences.
In response, Shuel emphasized a16z’s aim to deepen the influential voter pool to increase decentralization. In a blog post celebrating its commitment to delegation, a16z said “Crypto is about removing gatekeepers.” Whether delegating to university groups is the right way to do this, we’ll see—delegation to a16z’s first cohort of Optimism delegates will happen by the end of March.
⌛️ On-chain Proposals
On-chain DAOs are decentralized autonomous organizations that operate entirely on the blockchain, using smart contracts and other blockchain-based technologies for its operations and decision-making processes. Tally believes that true DAOs operate on-chain.
Gitcoin
[S17] Gitcoin Passport Budget Proposal
Summary: After passing on Snapshot, this on-chain proposal transfers the funds. Asking for 404,750 GTC for classic growth outcomes: up the number of passport holders, communities integrating with passport, and improve the developer experience facilitating this.
Voting ends: March 1st
[S17] Gitcoin Public Goods Funding Proposal
Summary: Also already passed on Snapshot. This fund will go towards defining and launching the Core Gitcoin Grants Program in April (soon, tm). Notably, a 68% decrease in asking budget from last season.
Voting ends: March 2nd
[S17] Gitcoin Allo Budget Proposal
Summary: Passed on Snapshot. Fresh out of ETHDenver, the Allo team is focusing on work for both Allo Protocol and Grants Stack, each with associated S17 outcomes. 136,200 GTC ask to maintain full budget and reserves with some leftovers from last season.
Voting ends: March 3rd
📝 10 Things To Read or Listen To
Article: “The Challenges of Offboarding in DAOs” by Doo Wan Nam
Article: “Disambiguating Autonomy” by BlockScience
Article: “The Problem of Measuring DAO Maturity” by Juan Esquivel
Thread: “The 10 most promising projects in NFTfi” by IMF.eth
Thread: “a16z announces first cohort of Optimism delegates” by Ross Shuel
Twitter Space: “Decentralization - DAOs & Online Communities” by MemeBrains
Twitter Space: “How to Launch a DAO” by Origami
Podcast (video): “The State of the Nation” from CityDAO
Podcast: “a16z’s Big Token Energy” from DAO or Never
Podcast: “The Current State of DAOs in the Bear Market with Chase Chapman” on Mint
💫 DAO Talk: zero to DAO // the DAO up | Weekly Ep. 36
🤭 Meme of the Week
For ETHDenver attendees: Tally is beyond excited to unveil our official hackathon bounty information! If you think you have what it takes to build on the Tally API and bring home that sweet cash bounty, we’d love to see it. More info here.
Not interested in the bounty but still looking to connect in Denver? Hit us up in Twitter DMs!
p.s.- Just enjoying summer in Australia at my favorite riverfront bar (it has a pool!). Trying not to let the Denver FOMO hit too hard.
