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The Tally Newsletter, Issue 16

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The Tally Newsletter, Issue 16

January 27, 2021

monetsupply
Jan 27, 2021
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The Tally Newsletter, Issue 16

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Welcome back for issue 16 of the Tally Newsletter, a publication focused on all things decentralized governance. We’ll keep you updated on key proposals, procedural changes, newly launched voting systems, shifting power dynamics, and anything else you need to know to be an informed citizen. 

This week, we cover:

  • Tornado Cash considers enabling token transfers

  • New Loopring token model puts L2 front and center

  • Kyber Network pursues decentralization with v3 changes

Plus, brief updates from around the ecosystem.


Tornado Cash Prepares for First Governance Vote

TL;DR: A contributor has proposed to enable transfers for the TORN governance token.

In the few weeks since the launch of Tornado Cash’s TORN governance token, pseudonymous contributor Rezan has proven the impact of focused action. Having taken the initiative to launch the Tornado Cash forum, they have now formulated the first TORN governance proposal.

Twitter avatar for @bantg
banteg @bantg
TORN users want to enable token transfers. Lock tokens into governance to signal your support.
torn.communityProposal #1: Enable TORN transfersBackground The TORN token was proposed by the Tornado cash team back in December. The token was airdropped to the Tornado cash users. However, beside claiming and voting, the token can’t be transferred to an arbitrary address. Starting from the 1st of February 3am UTC (Timestamp: 1612148437 to be ac…
6:04 PM ∙ Jan 26, 2021
42Likes8Retweets

TORN tokens were initially made to be non-transferable. This has become an emergent trend among new governance protocols, with the likes of B.Protocol and Inverse Finance also choosing to forgo transferability. 

One potential benefit is reduced regulatory risks for the creators or sponsors, as transfer restrictions guarantee that the issued tokens won’t have monetary value. If independent contributors then use decentralized governance to enable transfers, the sponsors could disavow responsibility. 

Beyond regulatory arbitrage, non-transferable tokens also have potential for better aligning users. They enforces a long (or potentially perpetual) time horizon for holders making governance decisions, which could result in better decision making. On the flip side this could be counterproductive, as voters don’t have immediate value at risk (token price declining) to disincentivize bad decisions.

For the Tornado Cash community, these philosophical questions may be largely beside the point as TORN holders get a clear payoff from being able to sell their airdropped tokens. But before this initiative can move forward, a whale holder with more than 1,000 tokens in a single address will be needed to sponsor the proposal.

Twitter avatar for @RezanC0de
Rezan @RezanC0de
We need a whale with more than 1k tokens on a single address to submit the proposal (DM me if you do). Then we will need 25k votes in total for the proposal to pass.
11:55 AM ∙ Jan 26, 2021

We’ll be watching closely to see if a community that is anonymous by design can rally to pass their first proposal, without the social signalling and back channel communications that typically underpin protocol governance.

Loopring Adopts Updated Token Model

TL;DR: Loopring’s new revenue system will distribute payouts on their zkrollup L2, and favor active users over passive token holders.

For a layer 2 platform priding itself on gas efficiency and ease of use, it was anachronistic that Loopring’s previous staking mechanism was both cumbersome and expensive. Users had to pay substantial gas fees to deposit and withdraw tokens, and funds were locked for 90 days from when they were deposited or claimed as rewards. 

With Loopring’s v3.6 upgrade now live in production, the old staking mechanism is being retired in favor of direct payouts on layer 2. 

Twitter avatar for @loopringorg
Loopring @loopringorg
We are thrilled to present the new LRC token model. Loopring Layer-2 is a scalable, Ethereum-secured protocol, product suite, and economy. $LRC is now placed firmly at its core 🌆 medium.com/loopring-proto…
medium.comLRC Tokenomics v2The Loopring protocol token, LRC, has been part of the protocol since our inception over 3 years ago. It’s design and usage have remained largely the same over this time, while the protocol and…
1:10 AM ∙ Jan 27, 2021
157Likes41Retweets

In addition to dogfooding adoption of their L2 solution, the revised token model also has potential to incentivize more valuable contributions. The previous staking system’s lock mechanism was effective in curtailing circulating token supply, but this ultimately offered little value to Loopring other than temporary price support for LRC. 

Going forward, protocol fees will be distributed directly on L2 and split between liquidity providers, insurers, and the DAO treasury. The initial split will favor liquidity providers with 80% of protocol fees, which will help bootstrap liquidity by redirecting earnings from LRC holders back to users. 

LRC holders will no longer be rewarded for simply holding their tokens, but will instead have several ways to earn through providing value to the network. Holders can earn a share of 10% of protocol fees by staking their LRC to insure users against technical risk. And half of the 80% revenue allocation to liquidity providers will be reserved for LRC trading pairs, giving holders another incentive to put their tokens to use. 

Future decisions about fee rates and revenue allocation will be made by Loopring DAO, which will initially be using Snapshot to manage voting. The current Loopring zkrollup architecture can’t support all governance responsibilities, so token reward distributions and other key functions will continue to rely on the Loopring team.

Kyber Network Announces v3 Upgrade

TL;DR: The network upgrade will place KyberDAO at the center of future decision making.

Kyber Network’s last substantial upgrade, in mid 2020, saw the launch of the KyberDAO as an initial governance mechanism for KNC holders. While Kyber was able to build substantial participation through their voting incentive payouts, what they have gained in breadth was not matched with depth.

As an example, to date KyberDAO has not created a governance forum or other key infrastructure that helps community members craft proposals. And the vast majority of proposals have comprised either periodic fee allocation votes or asset listings suggested by the core team. 

In addition to substantial changes to the liquidity protocol itself, Kyber’s latest update puts much greater emphasis on decentralized governance and community leadership.

Twitter avatar for @KyberNetwork
Kyber Network @KyberNetwork
9/ Along with the new architecture, a proposal to upgrade the @KyberDAO and $KNC token will be made and voted on, with the aim to greatly enhance KNC's governance power, create multiple streams of utility, support new innovation, and increase the overall value of the network⬆️
Image
2:19 PM ∙ Jan 21, 2021
63Likes8Retweets

A core part of the transition is moving Kyber from a single product towards a multi faceted liquidity protocol. With many more potential projects to invest in, it’s imperative that KNC holders can help set the direction for future growth. 

The Kyber team’s announcement post also hints at voters’ responsibility for determining user incentives. Taken together with the proposed migration to a new KNC token contract, it seems likely that the core token economics of deflationary supply through partial fee burning will be reassessed. With competing exchange platforms such as Balancer and Sushiswap embracing inflationary economics to bootstrap liquidity and network effects, Kyber may have no choice but to follow suit. 

As a final note, Binance currently controls over 40% of KyberDAO voting power, and has shown strong preference for maintaining the status quo with respect to token economics. Potential impacts to their KNC staking product may be a key factor in the proposal’s ultimate support from voters.


In brief:

  • Swerve struggles to corral multisig signers:

Twitter avatar for @SwerveFinance
Swerve Finance @SwerveFinance
Calling our multi-sig holders who have still not taken action after multiple attempts to reach out/reminders to approve a tx for us to conclude a small test on BTC pool. @Arthur_0x @im_manderson @0xKiwi_ @SBF_Alameda Please fulfil your obligation as a multi-sig holder.
11:38 AM ∙ Jan 26, 2021
19Likes4Retweets
  • Enzyme Finance (formerly Melon) launches their updated asset management platform:

Twitter avatar for @enzymefinance
Enzyme Finance @enzymefinance
Today, we're excited to announce Enzyme; the asset management layer for: 1. Savers who don't have time to stay on top of all the DeFi opportunities 2. Portfolio Managers who want to build, scale & monetise investment strategies 10 new features 👩‍🔬 medium.com/enzymefinance/…
medium.comIntroducing EnzymeYou spoke, we listened! Enzyme (formerly known as Melon) is directly inspired by our users and the DeFi community at large. We couldn’t be more excited to unveil it with you. It’s no exaggeration to…
3:24 PM ∙ Jan 21, 2021
325Likes99Retweets
  • Sushiswap revenue mechanism is exploited for 81 ETH:

Twitter avatar for @RektHQ
rekt @RektHQ
Old loopholes opened up give a hacker a small reward. 24 hours of DIGG/WBTC swap fees snatched by an opportunist. It ain't much, but is it honest work? We spoke to the @SushiSwap team to find out what went wrong.
rekt.newsBadgers DIGG SushiBadgers are known to take the same routes when they are out foraging for food during the night. This creates well-worn paths through fields and woods.When a badger’s usual path is disturbed or obstructed in some way, this confuses the animal, and results in them rebasing to the incorrect pairing.
4:12 PM ∙ Jan 26, 2021
159Likes47Retweets
  • Opium Network derivatives platform launches governance token:

    Twitter avatar for @Opium_Network
    Opium @Opium_Network
    Our number one priority has always been to decentralize the ownership of and control of Opium Protocol🔐 Today, we have reached an important milestone towards achieving that goal🚀 We proudly introduce the Opium governance system that is governed by $OPIUM medium.com/opium-network/…
    medium.comOpium GovernanceThe goal of Opium is to create a synthetic derivatives protocol that can be used by anyone. Our number one priority has always been to decentralize the ownership of and control over Opium Protocol…
    5:02 PM ∙ Jan 27, 2021
    36Likes10Retweets
  • Keep takes first steps towards decentralized governance with community multisig:

Twitter avatar for @keep_project
Keep #tBTC @keep_project
We're moving tBTC contract governance to our community. Our first community election has wrapped up, and we have 8 community members stepping up to take on a role as a community multi-sig. 🔐 Join the community and see what else is happening at chat.keep.network
chat.keep.networkJoin the Keep Discord Server!Check out the Keep community on Discord - hang out with 14,380 other members and enjoy free voice and text chat.
6:14 PM ∙ Jan 26, 2021
18Likes6Retweets
  • 0x Protocol v4 approved by ZRX voters:

Twitter avatar for @willwarren89
Will Warren 🍵 @willwarren89
0x protocol v4 has been approved by ZRX token holders! Ultra gas efficient, RFQ engineered for professional market makers, and new extensible architecture for assembling DeFi legos. blog.0xproject.com/say-hello-to-0…
Image
6:49 PM ∙ Jan 26, 2021
111Likes19Retweets
  • MakerDAO’s new Uniswap LP vaults reach capacity in hours:

Twitter avatar for @nomos_paradox
Nik Kunkel @nomos_paradox
Uniswap WBTC-ETH and USDC-ETH LP token Vaults are live! Users can now get leverage on Uniswap LP yields
Image
4:11 AM ∙ Jan 27, 2021
133Likes16Retweets

Thanks for joining us for this week’s Tally Newsletter! Be sure to check out the Tally governance app, and join us on Discord for the latest updates!

Anything we missed? New developments or protocols you’d like to see covered? Drop us a line at newsletter@withtally.com

Best,

Nate, Tally

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The Tally Newsletter, Issue 16

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