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The Tally Newsletter, Issue 55

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The Tally Newsletter, Issue 55

December 10, 2021

monetsupply
Dec 10, 2021
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The Tally Newsletter, Issue 55

newsletter.tally.xyz

Welcome back for issue 55 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 Sushiswap’s governance upheaval, plus brief updates from around the DAO ecosystem.

Also a small request for our readers - Tally is working to create solutions for DAOs’ greatest challenges. We would greatly appreciate your help filling out this short survey https://bit.ly/3DeFT7Y (survey closes on December 15) so that we have a better understanding of the DAO problem space. 


Sushiswap in Turmoil Over Team Compensation and Protocol Direction

TL;DR: Internal issues at Sushiswap have reached a breaking point, triggering several proposals to realign governance and management.

In the past week, Sushiswap has seen internal tensions spill into the open. While this conflict is specific to the Sushi project, it bears similarities with operational struggles around chain of command and team relationships that impact many other DAOs as well (see MakerDAO’s recent contributor offboarding proposals).

The flurry of activity was partly kicked off by the firing of core contributor AG. Additional attention was driven by former member BoringCrypto, creator of the Bentobox software underlying Sushi’s Kashi lending as well as Abracadabra’s MIM stablecoin. While personal enmity seemed to play a role in the comments, there were also concerns raised about transparency and funding accountability.

Twitter avatar for @Boring_Crypto
BoringCrypto @Boring_Crypto
What happened with the @BitDAO_Official deal? Sushi team got bonuses out of that and some received more than others.
4:01 PM ∙ Dec 4, 2021
96Likes1Retweet
Twitter avatar for @Boring_Crypto
BoringCrypto @Boring_Crypto
I've heard stories that a core team member lost a lot of $SUSHI in the CREAM hack and asked to be reimbursed by the Sushi treasury and this almost happened without community consultation. What happened here?
4:01 PM ∙ Dec 4, 2021
144Likes4Retweets

On the other hand, some claimed that contributors had been undercompensated compared with the value they’d provided to the Sushi ecosystem. CTO Joseph Delong went as far as to propose a retrospective payment of 200,000 SUSHI (over $1 million) to each of the roughly 20 core contributors (excluding himself). 

Twitter avatar for @josephdelong
Joseph Delong @josephdelong
This was a test to show less than 1% of the issuance going to the core team is controversial. You failed btw.
Image
Twitter avatar for @josephdelong
Joseph Delong @josephdelong
I created a new proposal for Sushi Core https://t.co/Cpurasqc74
10:53 PM ∙ Dec 5, 2021
71Likes5Retweets

While it seems this was mainly a stunt to drive attention to long festering compensation issues, it roiled the SUSHI token price and led to a torrent of activity and competing proposals on the Sushiswap forum. This included several forum posts (some of which have been removed), culminating in a proposal to remove Joseph as CTO which was followed by his resignation.

Twitter avatar for @josephdelong
Joseph Delong @josephdelong
I wrote an article detailing my failures in leadership at Sushi 🍣 mirror.xyz/0x8f99B0b48b23…
Image
4:09 PM ∙ Dec 10, 2021
996Likes89Retweets

Among the leadership failures Joseph called out, some apply broadly to many organizations within the DAO ecosystem:

  • Lack of clear authority to hire and fire core contributors, leading to decline in work quality and intractable personal conflicts

  • Failing to scale management functions within organization (eg hiring more PMs), which causes inefficiencies

Amid this upheaval, some of the investment funds with significant SUSHI holdings stepped in to propose new governance and organizational structure. While Sushi has been billed as a community led project free from VC influence, this could represent one of the positive benefits of involvement from fund companies, who have strong incentives to safeguard their investment through direct contributions and proposals.

Twitter avatar for @jdorman81
Jeff Dorman, CFA @jdorman81
Clearly, there have been internal issues at $SUSHI. Today @arca is releasing a re-structuring proposal of Sushi-Core to address this, & the lack of transparency, so SUSHI can scale & continue to ship world class community-owned DeFi products. Thread 👇 forum.sushi.com/t/sushi-dao-re…
forum.sushi.comSushi DAO Restructure ProposalBy Alex Woodard(Arca) & Dean Eigenmann(Dialectic) Summary Since Maki transitioned to an advisor role, Sushi moved to more of a flat organizational structure. However, DAOs and Digital Asset projects are still very nascent and require structure to continue to grow. Over the past year, Sushi has see…
12:32 AM ∙ Dec 7, 2021
400Likes80Retweets

The restructuring proposal seems to have a good deal of buy-in from the community and contributors, and includes the following elements to help Sushiswap improve organizational effectiveness and governance oversight:

Sushiswap Forum

While there is currently a bit of a power vacuum within Sushiswap core team, this episode may help put the DAO back on a path to success. By combining empowerment of the core team leadership with greater oversight, Sushi’s DAO structure could become a competitive advantage rather than an organizational handicap.


In Brief: 

  • Tally’s Safeguard mechanism for multisig oversight receives OpenZeppelin audit:

Twitter avatar for @DennisonBertram
Dennison Bertram (in NYC) @DennisonBertram
Whooho! Our Audit for Tally #SafeGuard, originally built for @Uniswap and now audited by @AaveGrants Composable Sub DAO's are here!
Twitter avatar for @OpenZeppelin
OpenZeppelin @OpenZeppelin
The @voteWithTally team asked us to review and audit a set of contracts with the goal of improving common governance contracts and giving more flexibility. We looked at the code and now publish our results. https://t.co/7WYWpOiqUO
7:08 PM ∙ Dec 6, 2021
9Likes2Retweets
  • Enso Finance launches vampire attack on 6 index protocols, with PieDAO responding by blacklisting contract addresses:

Twitter avatar for @ConnorSB13
Connor @ConnorSB13
@PieDAO_DeFi responds to @EnsoFinance by creating blacklist: github.com/pie-dao/PieVau… Great post by @MickdeG010 why this is a bad idea... forum.piedao.org/t/proposal-cle… As said in enso manifesto "Do not limit integrations. Promote them" & "Do not build walled gardens"
forum.piedao.org[Proposal] Clear statement from PieDAO to not limit user freedomSummary DeFi is about empowering users and giving them the freedom to use their funds in any way they see fit even if it means users can easily move on to another protocol. This proposal aims to give pie holders predictability that they will never be limited in their actions in any way unless its de…
2:54 PM ∙ Dec 9, 2021
19Likes1Retweet
  • Gearbox Protocol begins DAO launch with radical decentralization:

Twitter avatar for @GearboxProtocol
Gearbox Protocol @GearboxProtocol
And so it begins - DAO-First Launch 🤩 𝒜𝓁𝓈𝑜 𝓀𝓃𝑜𝓌𝓃 𝒶𝓈 𝓉𝒽𝑒 𝓃𝒾𝓃𝑒 𝒸𝒾𝓇𝒸𝓁𝑒𝓈 𝑜𝒻 𝒽𝑒𝓁𝓁 Initial core team won't retain control of any contract, the code will be open-source, & community will decide even the initial pools. Join the ceremony & become a DAOoor
Image
10:02 AM ∙ Dec 8, 2021
202Likes41Retweets
  • Dfinity’s on-chain governance considers DMCA takedown request:

Twitter avatar for @LefterisJP
Lefteris Karapetsas | Hiring for @rotkiapp @LefterisJP
Censorship resistance is a cornerstone of decentralized systems. @dfinity 's Internet computer is learning it the hard way. Its smart contracts (called canisters) can apparently be removed by on-chain governance. A heated debate going on the forums rn: forum.dfinity.org/t/upcoming-pro…
Image
Image
1:03 PM ∙ Dec 8, 2021
283Likes47Retweets
  • Osmosis protocol considers Stargaze’s proposal for coinvestment into liquidity bootstrapping pool:

Twitter avatar for @sunnya97
Sunny Aggarwal #IBC_MAXI @sunnya97
Probably the most interesting and exciting "DAO to DAO" interaction in @cosmos yet! Let's see if the @osmosiszone community goes for it!
commonwealth.imDetails and Parameters of Stargaze LBP on OsmosisThis proposal includes the details regarding the loan of OSMO to Stargaze’s multi-sig and the parameters of the LBP. By voting Yes on this proposal will signify approval for both a loan of OSMO to Stargaze, and Stargaze will then launch an LBP with the following parameters with that funding. This p…
10:20 PM ∙ Dec 4, 2021
259Likes43Retweets
  • GFX Labs withdraws leadership of Fei Protocol - Rari Capital merger:

Twitter avatar for @labsGFX
GFX Labs @labsGFX
We are withdrawing our @RariCapital @feiprotocol merger proposal from consideration. We are proud of our work and both communities, and we want to thank each community for considering our proposal.
7:59 PM ∙ Dec 3, 2021
92Likes9Retweets
  • Terra’s Anchor protocol faces $30 million in faulty liquidations, potentially linked to critical security issue within core mint/burn mechanism:

Twitter avatar for @FreddieRaynolds
FreddieRaynolds @FreddieRaynolds
.@terra_money issued a critical security update this evening to their node operators. Seems that someone is abusing the $UST mint/burn mechanism to liquidate borrowers on @anchor_protocol by engaging in low risk price manipulation.
Twitter avatar for @wengzilla
Ed 🌖 @wengzilla
Today, @anchor_protocol users experienced multiple rounds of liquidations. Currently, my best guess is that this was not a malicious actor but a buggy price oracle. (1/9)
7:58 AM ∙ Dec 10, 2021
5Likes1Retweet

Thanks for joining us for Tally Newsletter issue 55. 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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