Oh, (public) goodie!
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 talking public goods—specifically, those of which Optimism just retroactively funded with 10M OP. Clearly, the free-rider problem that prevents the widespread creation of public goods in TradFi is overcome by decentralization, and that’s something worth analyzing. We’ll also go over a few proposals from some big dogs—Aave, Compound, and ENS. Let’s dive in.
🤿 Deep Dive: Oh, (public) goodie!
And yet another reason why DeFi > TradFi: public goods, shared resources and infrastructure that benefit the entire ecosystem, actually exist, and in plenty. Optimism’s Retroactive Public Goods Funding (RetroPGF) Round 2 results announcement doled out 10M OP. Public goods have overcome the free-rider problem that restricts their widespread creation in TradFi—Let’s talk about ‘em.
First, the news fresh off the press: 10M OP to projects and people who have supported (note: we’re talking in past tense here. This is retroactive, unlike grants) the usage and development of the OP Stack. Recipients were split between education, tooling, and infrastructure initiatives. And of the 195 projects nominated for funding, all 195 got it, with the median OP received at 22,825 and top 10% receiving upwards of 140k each. Keep in mind, the price of OP is around $2.20—each project is getting a fairly fat chunk of cash. Check out the detailed breakdown of recipients.
These projects were built without guaranteed funding from Optimism—that occurred retroactively. So why be the one to build the thing when you could just wait for someone else to do it and save yourself the cost? And why is this so common in crypto?
Well, the free rider problem that plagues TradFi due to its reliance on centralization leaves public goods typically under-provided over there. Individuals have little incentive to contribute to their creation and maintenance, as they can often free-ride on the contributions of others. How does DeFi tackle that problem?
Some projects provide economic incentives. These are grants (like the famous public goods grants of Gitcoin and ENS) and funds (like RetroGPF). The psychology is simple: Since you can’t get money for free-riding, you might want to build the good yourself. Interestingly, DeFi is still investigating the retroactive versus seed model. We’ll see where that goes.
Projects rely on community-driven efforts that drive a greater sense of ownership and responsibility among contributors. If you think a good is cool, you can actually help build it rather than wait around to free-ride, and that may mean more to you than a payout.
Many public goods in crypto benefit from network effects, where the value of the good increases as more people use it. This creates a natural incentive for you to contribute to the good, as you benefit directly from its growth and success.
Contributing to public goods is good for your ‘rep. Whether it is pure virtue signalling (also present in TradFi, notably) or actual hard work that drives a good to launch, you can increase your standing for building a public good (at least on Crypto Twitter).
Exciting stuff, people actually wanting to contribute to the good of the ecosystem. It’s almost like decentralization solves some massive problems ;)
⌛️ 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.
Aave
Risk Parameter Updates for Aave V2 AMM Market (2023-03-29)
Summary: Freeze G-UNI DAI/USDC and G-UNI USDC/USDT given low liquidity in each. Recommended by Gauntlet, BGD Labs, Chaos Labs, and Aave Companies.
Voting ends: April 3rd
ENS
[EP3.5] [Executable] Activate new .eth Controller and Reverse Registrar
Summary: So the new name wrapper has launched. A new .eth controller will decrease transactions required for people tryna use it, from 4 to 2 transactions. And updating the reverse registrar which adds support for contract owners to retrospectively claim their reverse node.
Voting ends: April 5th
Compound
Compound V2 -> V3 Migration (Phase 2)
Summary: Proposed by Gauntlet and based on community feedback for strategic preference, this proposes a number of adjustments re supply/borrow of stablecoins versus COMP rewards.
Voting ends: April 4th
OpenZeppelin Security Partnership - 2023 Q2 Compensation
Summary: Pay OpenZeppelin what they’re owed, which happens at the beginning of every quarter (that means we’re officially in the year’s second fiscal quarter - omg).
Voting ends: April 5th
NounsDAO
Nouns Short Shorts - Bonus Pack
Summary: $65k to fund 7 more Short Shorts (little videos) and host an IRL festival event in LA to showcase ‘em.
Voting ends: April 8th
📝 10 Things To Read or Listen To
Article: “The Double-Edged Sword of Creator Tokens: Empowering or Endangering Artists in web3?” by coolhorsegirl
Article: “Self-Interest, Self-Sacrifice, and DAOs” by Doo Wan Nam
Article: “State of DAO Funding” by Ryan Holloway
Article: “The State of DAOs & Governance” by DAO Governance Collective
Thread: “Let’s get back to basics” by Aaron Soskin
Twitter Spaces: “Not Financial Advice w/ @mywebacy” from Opolis
Twitter Spaces: “Gitcoin Governance: The Case for Change?” from Gitcoin
Podcast: “Sam Altman: OpenAI CEO on GPT-4, ChatGPT, and the Future of AI” from Lex Fridman Podcast
Podcast: “Transforming Audiences into Communities with Reka from Guild.xyz” on Mint
Podcast: “The Future of Independent Work w/ Richie Bonilla” on Rehash
🤭 Meme of the Week
In Tally news, support for DAOs on Moonbeam is live! Head over to Tally’s Add-a-DAO page to launch your DAO in just a few clicks (it’s literally so easy, it took me 3 minutes topz when I added one). Also, Aribitrum delegation still going strong with 2 proposals live! The largest delegate is Treasury DAO followed by olimpio.eth and PlutusDAO. 3 of the 5 largest delegates are DAOs!
p.s.- Been absolutely ripping games lately and I’m on a win-streak of 4 right now in Catan. My strat is usually to amass sheep. I’m somehow always low on wood, but doesn’t matter if I can trade my hoards of sheep to the bank. Here’s how I went last week, just before I built my sheep farm on that 4-4-9 spot. Let me know if you ever want to play (lose) online—Catan or Majong ;)
