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The Tally Newsletter, Issue 33

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The Tally Newsletter, Issue 33

May 26, 2021

monetsupply
May 26, 2021
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Share this post

The Tally Newsletter, Issue 33

newsletter.tally.xyz

Welcome back for issue 33 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: 

  • Gitcoin’s push for decentralization with the GTC token launch

  • Index Coop struggles with failure to meet quorum on key votes

Plus brief updates from around the ecosystem.


Gitcoin Launches Governance Token

TL;DR: The GTC token will be used to oversee the Gitcoin grants program, as well as manage treasury assets and support work on sybil resistance.

While Gitcoin has become a central force for Ethereum development and funding, the core bounties and grants programs were developed and administered by a private company. Grants funds are held in a community multisig with outside members, but this setup still drew some concern over excessive centralization. 

Gitcoin has taken a great stride towards addressing this with yesterday’s launch of the GTC governance token. 15% of the token supply has been granted to past donors and grantees on the platform, with another 35% allocated to the genesis team and investors over a 2 year period. 

GTC holders will be the ultimate source of authority over Gitcoin’s grant rounds, with a mandate to ratify the size and allocation of funding between different areas. They will also control a treasury comprising 50% of the GTC token supply, which will help counterbalance the voting power of protocol insiders and incentivize future participation. 

Twitter avatar for @owocki
ΞWoki in Quadratic Lands 🌈🌅 @owocki
"The legitimacy & moral right to governed is only justified/lawful when consented to by the ppl governed. 👨‍⚖️🏦 SUPER proud that todays GTC distribution will have ~100% delegated governance set BEFORE token distribution. 🌈 I hope that more DAOs do this in the future! 🌱
Image
7:27 PM ∙ May 25, 2021
88Likes9Retweets

Early governance participation has been boosted by a thoughtfully designed token claims process. While claiming on the Quadraticlands site, users are automatically prompted to delegate their tokens, with a list of prospective stewards pulled directly from the Gitcoin community forum. 

Twitter avatar for @owocki
ΞWoki in Quadratic Lands 🌈🌅 @owocki
super proud of the distribution of voting power for GitcoinDAO 🗳 this is exactly what i had hoped for when we baked delegation into the token drop experience 🌈🌱 withtally.com/governance/git…
Image
2:21 PM ∙ May 26, 2021
63Likes1Retweet

This seems to be working as intended, with nearly 5% of the fully diluted token supply already active for voting (nearly 33% of the community’s initial allocation). The distribution of votes is also more balanced than many other protocols, where top ranked delegates frequently gain their voting power from only a handful of large token holders. 

GTC holders’ first call to action is quickly approaching. As part of their governance responsibilities, voters will have the opportunity to review and ratify Gitcoin’s Grants Round 10. But beyond this, they also face the tasks of treasury management (including GTC tokens as well as donated AKITA tokens) and maintaining/building on sybil resistance. Gitcoin’s work on identity is a particular area of interest, as it points towards potential for future governance mechanisms that are based on personhood and participation rather than proof of capital (like current 1 token 1 vote mechanisms).

Index Coop Reruns Key Votes After Failing to Reach Quorum

TL;DR: The failure to increase leveraged token supply caps led to a large price dislocation on secondary markets.

The vast majority of protocol governance systems utilize some form of quorum requirement. This ensures that unfavorable proposals can’t be snuck through the voting process without sufficient backing from the community. But while most protocols have generally seen healthy participation rates, occasionally a lack of voter turnout causes serious issues.

In the past we’ve seen this most frequently in protocols using on-chain governance. Most notably, Uniswap’s first two proposals failed to reach the minimum 40 million vote requirement, and MakerDAO has seen periodic governance delays due to failure to pass quorum. This can be partly explained by the friction involved in on chain voting, which requires users to pay transaction fees to submit their vote choice. Uniswap’s initial proposals were also fairly controversial, so it could be argued the quorum requirement worked as intended by blocking proposals with insufficient support. 

Index Coop’s latest struggles with voter participation are notable as they don’t fall under the explanations above. Index currently uses off chain Snapshot polling to gauge user support, eliminating the need for paying transaction fees to submit votes. And the most recent proposals were fairly uncontroversial, involving day to day operational matters that would be expected to be rubber stamped by governance. 

Twitter avatar for @indexcoop
Index Coop @indexcoop
A quick post-mortem of the ETH2x-FLI price dislocation 👇 medium.com/indexcoop/unde…
medium.comUnderstanding the ETH2x-FLI PremiumWith the downturn of Black Wednesday and the dislocation of ETH2x-FLI price from NAV, we recognize that there is frustration with the product and the lack of communication from the Set and Index Coop…
10:54 PM ∙ May 24, 2021
115Likes22Retweets

The first proposal was a motion to deprecate the Coinshares CGI index product. Considering the product had barely any use and was running into liquidity issues with component assets, this vote was mainly just a formality to save the protocol from further investment and management overhead. 

The second and third failed proposals would have increased the maximum supply limit for Index’s successful FLI leveraged tokens. These votes were arguably more important, as they impact product stability. Arbitrage bots keep the market price of FLI tokens in line with underlying deposit value, but when the index reached its supply cap it was no longer possible to mint additional tokens to balance supply and demand. This caused the market price of the FLI products to rise far over the value of underlying assets, with any users who bought at a premium facing likely losses once prices return to normal.

Index quickly resubmitted the three votes earlier this week, and all are on track to pass later today. In the short term, Index is considering delegating authority over supply caps to a multisig or other more agile decision making body, which should prevent this issue from recurring. But this represents a cautionary tale for protocols relying on governance agility, proving that gasless voting may not be enough to incentivize active participation. Vote delegation is an alternative tool that can help increase engagement from passive owners, who may be limited by lack of time to review proposals rather than friction of paying transaction fees.


In Brief:

  • Tally welcomes synthetic index protocol Cryptex as a supported governance:

Twitter avatar for @CryptexFinance
Cryptex @CryptexFinance
👀 @voteWithTally withtally.com/governance/cry…
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7:02 PM ∙ May 25, 2021
9Likes5Retweets
  • MakerDAO community member proposes disabling MKR borrowing on Aave:

Twitter avatar for @ahbartsch
Aaron ⟠ Bartsch @ahbartsch
Just posted a proposal over at @AaveAave to consider disabling MKR borrowing. Please have a look and join the discussion if you are interested. governance.aave.com/t/proposal-dis… @StaniKulechov @lemiscate
governance.aave.comProposal: Disable MKR borrowingHi Everyone, Aaron from the MakerDAO community here. Recently we tried to enact staking rewards into the protocol in order to incentivize MKR holders to participate more and move their MKR from more speculative ventures but unfortunately MKR voters did not approve. Another primary concern is that …
2:25 AM ∙ May 26, 2021
35Likes6Retweets
  • Marketmaker Wintermute makes push into defi ETFs with investment in asset management protocols:

Twitter avatar for @EvgenyGaevoy
wishful cynic @EvgenyGaevoy
5. Wintermute is making a bet on the crypto index/etf space with a long term view to accelerate adoption. We started by partnering with four leading projects in this space (alphabetical order, not playing favourites😉): @indexcoop @ndxfi @PieDAO_DeFi @powerpoolcvp
4:16 PM ∙ May 25, 2021
24Likes2Retweets
  • Gauntlet Network makes first adjustments to swap fees as part of their Balancer v2 engagement:

Twitter avatar for @gauntletnetwork
Gauntlet @gauntletnetwork
We released our first set of fee changes on @BalancerLabs V2 today!
8:46 PM ∙ May 25, 2021
68Likes8Retweets
  • Yearn pitches new YFI vault type with lower fees to MakerDAO community:

Twitter avatar for @defipulse
DeFi Pulse 🍇 @defipulse
The @iearnfinance community has proposed a new YFI-based vault-type to @MakerDAO which would have a higher liquidation ratio and lower stability fee similar to ETH-C. What do you think? Weigh in on this Signal Request
forum.makerdao.com[Signal Request] New vault-type for YFI with a higher LROverview Following up on the update from @nadia at the G&R-call on May 6th I had the pleasure to join a call with the Yearn-team to find out what they are missing in our portfolio so far. One of their needs is a YFI-based vault-type similar to ETH-C with a higher Liquidation Ratio to get a lower St…
2:00 AM ∙ May 21, 2021
21Likes2Retweets
  • Curve veCRV holders to receive airdrop for authorized fork on Fantom, similar to previous arrangement with BSC based Ellipsis:

Twitter avatar for @Cryptoyieldinfo
Cryptoyieldinfo @Cryptoyieldinfo
$HOOP on Fantom. veCRV Holders A snapshot of all veCRV holders will be taken weekly and ~0.46% (24% over a year) of the HOOP supply will be distributed to Curve veCRV holders. - 1% Initial drop to all FROYO holders, retroactively from May 10th 2021, on launch of HOOP $CRV 🔥
Twitter avatar for @FTMAlerts
Fantom Community Alerts 🚨 @FTMAlerts
(1/7) It looks like the team over at @HoopFinance is getting pretty close to pulling the trigger on a public launch. I strongly recommend you guys join their discord if you haven't already $FTM Web: https://t.co/yYGDoJSYaK Discord: https://t.co/ltvOk3122x 👇
5:44 PM ∙ May 22, 2021
66Likes8Retweets
  • Yearn votes on rotating out two signers from their core multisig:

Twitter avatar for @bantg
banteg @bantg
[Proposal] Change Two Multisig Signers
gov.yearn.financeYIP-62: Change Two Multisig SignersAuthors @banteg @lehnberg @milkyklim @tracheopteryx Summary A proposal to exercise the ‘Change Multisig Signers’ power held by YFI holders as defined by Governance 2.0[1] in order to change two signers who have served yearn well and rotate in fresh blood to improve signing speed. Status This pro…
3:45 PM ∙ May 20, 2021
47Likes3Retweets
  • Rari invalidates snapshot proposal that failed to follow governance framework:

Twitter avatar for @RariCapital
Rari Capital @RariCapital
[VOTE] - Invalid The Snapshot proposal to engage with Layer3 does not follow the governance framework and is voided. We look forward to a forum post to begin the discussion process! Snapshot: vote.rari.capital/#/rari/proposa… Governance framework:
notion.soNotion – The all-in-one workspace for your notes, tasks, wikis, and databases.A new tool that blends your everyday work apps into one. It’s the all-in-one workspace for you and your team
1:51 AM ∙ May 25, 2021
7Likes1Retweet

Opportunities: 

  • Flipside Crypto’s Bounty Brief newsletter collates funding for defi data analysis 

  • One week left for Uniswap Grants Program’s data analytics dashboard bounty:

Twitter avatar for @uniswapgrants
UNI Grants @uniswapgrants
only 1 week left for UGP's Open Call for @Uniswap V3 Data Dashboards! 🧧 $50,000 of bounties in UNI up for grabs 🤝 @DuneAnalytics & @flipsidecrypto supported ⏫ finalists fast tracked for potential grant submit your dashboards now! 👇🏻 docs.google.com/forms/d/e/1FAI…
docs.google.comUGP V3 Analytics BountiesThe goal of this open call bounty program is to create and distribute publicly available, accessible, and easily digestible data dashboards for community usage. With all the excitement around V3, we wanted to provide the UNI community an opportunity to engage with data experts all around the world u…
4:01 PM ∙ May 25, 2021
49Likes11Retweets
  • Compound Grants Program shares request for proposals:

Twitter avatar for @compoundgrants
Compound Grants @compoundgrants
Did you know we have RFP's? Check out the full list here! compoundgrants.org/Request-for-pr…
Image
11:17 PM ∙ May 24, 2021
14Likes2Retweets

Thanks for joining us for issue 33 of the 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 33

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