The Tally Newsletter, Issue 60
January 14, 2022
Welcome back for issue 60 of the Tally Newsletter, a publication focused on defi and DAO 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:
Rabbithole’s Entry into the DAO Governance Space
ENS DAO Holds Workstream Elections
Plus some quick updates from around the DAO ecosystem.
Rabbithole Learning and Discovery Platform Launches Metagovernance
TL;DR: Rabbithole will use voting power earned from protocol quest offerings to empower community governance.
Over the past year, Rabbithole has become an important user acquisition tool for DAOs and defi platforms. It offers a learning and discovery platform similar to Coinbase Earn, where users can earn a small share of tokens for proving knowledge about the sponsoring project. But unlike Coinbase’s offering, which frequently just involves video explainers and short quizzes to prove retention, Rabbithole encourages learning by doing - users must actively use and interact with the underlying project to earn their reward.
As part of their revenue model, Rabbithole keeps a small share of the tokens granted for user rewards. But with significant funding already in place, they have taken the forward looking approach of holding these DAO governance tokens on their balance sheet, which has led to a significant accumulation of voting power in supported projects.
With their latest announcement, Rabbithole has now committed to putting these tokens to work and further deepening their relationship with users and client projects. This will involve active delegation, voting, and participation, all directed by the Rabbithole community of users with proven DAO and defi engagement.
Based on Rabbithole’s past quests, they can already begin using their token stakes to engage with 7 of the most prominent DAOs on Ethereum. And as they continue to expand their quests program, this practice of holding tokens for governance engagement can become an important selling point for projects - helping to acquire not only users, but also contributors.
ENS Forms DAO Working Groups
TL;DR: Voters are deciding on up to 3 initial stewards for each of the DAO’s workstreams.
ENS is kicking their governance operations into high gear with the upcoming launch of workstreams. While working group structures have been adopted by several other DAOs including MakerDAO and Gitcoin, ENS is taking a unique approach to team formation versus predecessors. Where other projects allow individuals or preexisting groups to propose new workstreams, the ENS DAO has taken the opposite approach of first ratifying working groups before confirming members.
The initial proposal for working group formation passed with an overwhelming majority, and ENS holders are now considering open elections for up to 3 members of each of the 4 inaugural teams. Open elections for members brings some potential benefits but also comes with risk.
On the benefit side, this method is radically transparent and helps ensure working group members remain accountable to token holders (new elections happen every 6 months). There is also the possibility that this onboarding process will draw from a wider group of contributors, although name recognition and public profile may have a large impact on the eventual election winners. Besides the risk of working group elections devolving into a popularity contest, coordination may suffer if the elected members can’t work well together within or across teams.
Elections end within the next day, so we should begin to see initial results soon. According to the previously approved working group framework, representatives from all 4 teams will coordinate on a collective funding request proposal to the ENS DAO in the coming weeks, which should demonstrate if this novel team building style is conducive to high stakes coordination. Assuming this style of contributor elections works well, it could offer an important safeguard against the risk of contributors capturing parts of DAO organizations.
In Brief:
Blockchain at Berkeley student organization launches grants program:
Dydx governance considers controversial market maker rewards changes, with questions raised about possible self-dealing among large market makers that also participate in governance:
Friends with Benefits DAO undertakes code of conduct review on member, representing one of the first cases of DAO disciplinary action:
Tether freezes 3 addresses with $160 million in USDT, representing largest seizure by a centralized stablecoin issuer to date:
Maker investigates NFT backed lending mechanisms
Thanks for joining us for Tally Newsletter issue 60. 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