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The Tally Newsletter, Issue 40

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The Tally Newsletter, Issue 40

July 14, 2021

monetsupply
Jul 14, 2021
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Share this post

The Tally Newsletter, Issue 40

newsletter.tally.xyz

Welcome back for issue 40 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: 

  • Uniswap Grants Program’s renewal proposal

  • The Defi Education Fund in the hot seat after token sales

Plus brief ecosystem updates from other projects.


Uniswap Grants Program is up for Renewal

TL;DR: Governance is considering a renewal for 6 more months, using the remaining UNI tokens already in the grants multisig.

When proposal 3 passed in December of last year, it represented a key win for Uniswap governance. The community had been struggling in the aftermath of two failed governance proposals, and there was some doubt that it was even possible to reach the 40 million UNI quorum threshold required to pass a vote. 

Tally

In the following months, the Uniswap Grants Program (UGP) got up and running with an initial $750,000 quarterly budget for project funding. The first quarter’s grants were awarded as a large batch in the spring, with funding for a broad range of projects including Tally’s open source Safeguard multisig tool.

Twitter avatar for @uniswapgrants
UNI Grants Program @uniswapgrants
thanks to @Uniswap community governance through @SnapshotLabs: 🦄15.5M UNI delegated ✅99.9% approval @Uniswapgrants will be doubling our Q2 budget to $1.5M, $500k of which will be used to match the v3 Bug Bounty Program!
Twitter avatar for @uniswapgrants
UNI Grants Program @uniswapgrants
~6 hours left to vote on UGP matching $500k to @Uniswap v3 Bug Bounty Program! in 7 days: 🦄 over 15M UNI in votes 🤝 over 540 individual participants 🤏🏻 only 4 votes to Deny this sets a new precedent for lightweight governance decisions - vote now! https://t.co/MWuavbRg3j https://t.co/fPgsafnTir
4:00 AM ∙ Apr 3, 2021
92Likes13Retweets

After one quarter of successful operations, governance approved an expanded grants budget of $1.5 million, including $500,000 for Uniswap v3 bug bounties. With no claims against the bounty fund, UGP was able to allocate a total of $1 million across several additional waves of grants in the second quarter. Some key grant funded projects include the fish.vote interface for community proposals and liquidity incentive contracts for Uniswap v3.

In addition to direct funding impact, the UGP has also served as a model for other protocols looking to better utilize their treasuries. 

Twitter avatar for @uniswapgrants
UNI Grants Program @uniswapgrants
🔥 welcome to the world!🦄 an amazing committee of @compoundfinance community members empowered by successful decentralized governance - can't wait to see what's next... 🤝🤝
Twitter avatar for @compoundgrants
Compound Grants @compoundgrants
@uniswapgrants hi big bro. I’ll be a grants program too soon. 👀
6:30 PM ∙ Mar 12, 2021

Compound adopted a largely similar framework for their grants program in the Spring. Others including PoolTogether and Aave followed, helping to funnel resources to alternative uses beyond liquidity mining.

Twitter avatar for @uniswapgrants
UNI Grants Program @uniswapgrants
in 2021 UGP deployed $1.75M to 52 grantees and while it was initially funded $750k per quarter, the multisig now custodies ~$8.3M we're asking @Uniswap community support to reinstate UGP with the remaining funds over the next 6 months! ✅vote here:
snapshot.orgSnapshot
10:10 PM ∙ Jul 13, 2021
68Likes12Retweets

With the original 6 month program term coming to a close, Uniswap governance is now considering a poll vote to renew the grants program for an additional two quarters. Among the changes for the renewed program are an expanded grants funding target and greater participation from committee members, who will now be compensated along with the program lead while taking a more active role in managing applications. 

Unlike most spending related proposals, this likely won’t end up with an on-chain vote as it doesn’t require any new disbursements from the Uniswap treasury. When UGP was first approved the 500,000 UNI provided represented 6 months of funding, but with UNI’s price appreciation the grants multisig currently has over ¾ of the initial amount remaining, worth $8 million.

Snapshot votes don’t have any built in approval or quorum thresholds which makes defining success more subjective. The simplest and most defensible option is to require the same quorum levels needed to pass an on-chain proposal. Assuming the poll receives 40 million votes in support over the next week, UGP will be on track for another two quarters of ecosystem funding.

Uniswap Grapples with Treasury Oversight

TL;DR: The Defi Education Fund’s recent UNI token sales have resurfaced community concern over spending and transparency.

While the UGP renewal has been generally well received, the community is currently grappling with widespread concern over another governance funded committee, the Defi Education Fund. 

The Defi Education Fund was initially proposed to fund political lobbying and policy advocacy in support of decentralized finance. While the overall goals had broad support, there was disagreement within the community over some key points. Concerns centered on limited transparency, lack of direct accountability to governance, and questions of alignment between the committee members and governance. The sheer amount of funds requested also raised eyebrows, with many preferring to allocate smaller amounts over time as the fund built up a record of performance.

The proposers took some steps to address this before moving forward with an on chain proposal, such as agreeing to hold funds primarily in an multisig rather than an off chain entity. But the vote counts for proposal 6 show that these changes were not enough to resolve community concerns.

Tally

In the vote’s aftermath, the prominent role of university student groups also came under the spotlight. 

Twitter avatar for @jamico__
Jeffrey Amico @jamico__
Thrilled to add @UMichBlockchain to our growing delegate network! 🚀 @CalBlockchain @StanfordCrypto @HarvardLawBFI @PennBlockchain @BlockchainatCU @blockchainucla @MITBitcoinClub The future of crypto is bright 😎
Twitter avatar for @UMichBlockchain
Blockchain at Michigan @UMichBlockchain
Ecstatic to announce that @a16z is delegating 2.5M $UNI and 50K $COMP to Blockchain at Michigan! We look forward to advancing the future of DeFi with some of our favorite friends @amico_jeffrey @CalBlockchain @HarvardLawBFI @PennBlockchain @ColumbiaCBA @StanfordCrypto and more
5:17 AM ∙ Jun 10, 2021
61Likes11Retweets

Student groups have great potential to drive active participation in governance. But with a16z providing support to so many of these voters, it raised questions about delegate independence and undisclosed coordination.

Uniswap Forum

Amid this generally backdrop of skepticism, the fund’s decision to sell half of their allocated UNI for USDC set off a storm of comments and activity.

Twitter avatar for @fund_defi
Defi Education Fund @fund_defi
With the help of @GenesisTrading, we sold 500k UNI for ~$10.2M USDC in order to fund the efforts of the Defi Education Fund. In the next 24 hours, we will be sending 500k UNI to Genesis and receiving ~$10.2M USDC in return.
9:55 PM ∙ Jul 12, 2021
103Likes22Retweets
Twitter avatar for @AndreCronjeTech
Andre Cronje @AndreCronjeTech
First time I hear about the "Defi Education Fund" and somehow they got a $10mm grant, sense check;
6:50 AM ∙ Jul 13, 2021
184Likes26Retweets

This culminated in a satirical thread on the Uniswap form, focusing on the shortfalls in the governance process leading up to proposal 6. 

Twitter avatar for @CryptoCobain
∞ CO฿IE @CryptoCobain
I wrote an unfortunately extremely long and serious followup to my Uniswap Governance Proposal Warning: takes ages to read and is actually boring. Read it here: gov.uniswap.org/t/proposal-rem…
Image
2:57 PM ∙ Jul 14, 2021
414Likes26Retweets

While the tone was mainly joking and light hearted, it brought a lot of community concerns to the fore:

  • Governance theater: Can large holders and funds improve decentralization through supporting many delegates? How can these relationships be more transparent?

  • Purpose of the treasury: The Defi Education Fund seems to have a US focus. Should an initiative like this be run through the treasury, which is meant to serve the entire international Uniswap community? And is it appropriate to fund general ecosystem priorities rather than focusing on Uniswap specifically?

  • Rigor and oversight: Many were surprised when the fund sold half of their allocated UNI, as this wasn’t clearly called out anywhere in the proposal. A proposal of this magnitude should offer more specifics to allow for thorough community analysis. 

Twitter avatar for @iamDCinvestor
DCinvΞstor @iamDCinvestor
$1.75M spent on grants to grow the @Uniswap ecosystem, requiring regular review from community governance for more funding excellent 👍 versus $20-30M spent on 5-year lobbying efforts, with effectively no working oversight from community governance big, big oof 🤦‍♂️
Twitter avatar for @uniswapgrants
UNI Grants Program @uniswapgrants
in 2021 UGP deployed $1.75M to 52 grantees and while it was initially funded $750k per quarter, the multisig now custodies ~$8.3M we're asking @Uniswap community support to reinstate UGP with the remaining funds over the next 6 months! ✅vote here: https://t.co/iH1vQXCcnM
4:30 PM ∙ Jul 14, 2021
30Likes2Retweets

While UGP seems to be meeting expectations, the Defi Education Fund has a ways to go to build trust with the wider Uniswap and defi communities they serve.


In Brief:

  • Optimism begins public launch with Uniswap app support:

Twitter avatar for @optimismPBC
Optimism @optimismPBC
🌹 Roses are red 💎 Violets are blue ⏰ You've all been waiting 🦄 @Uniswap on L2 optimismpbc.medium.com/announcing-uni…
optimismpbc.medium.comAnnouncing Uniswap V3 on OptimismAlmost two years ago at DEVCON V in 2019, we collaborated with Uniswap to build Unipig Exchange, the first-ever demo of Optimistic Rollup. Though just a proof of concept, it was a hit and started our…
7:37 PM ∙ Jul 13, 2021
1,890Likes502Retweets
  • LexPunk DAO begins work on form delegate disclosures and voting policies

  • Maker’s executive vote remains below the approval threshold after more than a week:

Twitter avatar for @bantg
banteg @bantg
MKR holders are not so keen on voting for rugging 50% of their revenue.
Twitter avatar for @MonetSupply
monetsupply.eth @MonetSupply
Attention @MakerDAO $MKR holders This executive vote has been waiting for support for a week: https://t.co/yUOLOz6MUr Please take a look and vote if you support it ✅🗳️
12:14 PM ∙ Jul 13, 2021
102Likes6Retweets
  • Gnosis Safe multisig is now available on multiple EVM chains:

Twitter avatar for @gnosisSafe
Gnosis Safe @gnosisSafe
The multichain future is here for Gnosis Safe! We're now live on @0xPolygon, @BinanceChain and @xdaichain, with @arbitrum joining soon. We're so excited to support the user and developer ecosystems on these networks. What will we build together now?
blog.gnosis.pmGnosis Safe is Live on Layer 2!Polygon and Binance Smart Chain (BSC) have joined xDai as Gnosis’ Layer 2 offerings, with Arbitrum coming soon Following our May announcement, the Gnosis Safe team is thrilled to launch today on…
2:08 PM ∙ Jul 13, 2021
280Likes51Retweets

Thanks for joining us for issue 40 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 40

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