Uniswap X marks the spot

the Tally newsletter, issue 107

welcome back to the Tally newsletter, your weekly source for DAO governance insights. i'm coolhorsegirl and i’m so happy to be here. 🟣

this week, we’re talking UniswapX, which lives in the in-between of onchain and off-chain, and that has its pros and cons. decentralization maxi or not, it leads to an interesting debate over how much things like MEV-resistance weigh versus censoribility.

also, Arbitrum grants program is getting down to it with a proposal to fund milestone 1. ENS is considering expanding permissions in its endowment, and NounsDAO has some potential new traits on the table. let’s get into it 👇

🤿 deep dive: UniswapX marks the spot

it’s time we talked about UniswapX—Uniswap’s gasless ERC20 swap settlement protocol that aggregates all liquidity sources—after they announced it at ETHCC, and at Tally we’ve certainly got some big fans of UniswapX. let’s talk about why UniswapX is SUCH a big deal in the discussion of what lives onchain versus off and decentralization as a whole.

UniswapX is a protocol that's owned by the Uniswap DAO's timelock contract and has a fee switch controlled by the DAO. it's not an AMM, but it complements the AMM by more effectively working against problems that the AMM can't (namely, MEV and gas-intensive swaps). the protocol will improve on Uniswap by offering private offchain RFQs (requests for quotes), which prevents MEV attacks like front-running and sandwiching.

there are onchain components like the execution of trades and the management of liquidity. then there are also offchain components (APIs and user interfaces) that interact with the X protocol that are not owned or controlled by the DAO. several parts remain up for debate in regard to DAO ownership—that discussion is live on Uniswap’s forum now.

mind you, this isn’t a crazy new thing—CowSwap has done something similar for years, but CowSwap acts as an offchain liquidity aggregator on top of DEXs. UniswapX, rather, is an offchain liquidity aggregator built on top of Uniswap v3 (and only Uniswap). it’s a beautiful, well-tested method.

it seems like the offchain components, though, make UniswapX less decentralized than Uniswap, and that has consequences, like censoribility. for example, while Uniswap could not be shut down (due to company decision, the SEC, whatever), UniswapX could (theoretically) be shut down. How? For one, Uniswap Labs could permission the RFQ system to allow some access to liquidity and not others. whether that centralization matters will vary from one decentralization maxi to another, but hey, the whitepaper is only 3 pages—definitely worth a read on one of the most up-and-coming projects in crypto, especially one related (we don’t know how much, yet) to a DAO.

⌛️ onchain proposals

onchain DAOs are decentralized autonomous organizations that operate entirely on the blockchain, using smart contracts and other blockchain-based technologies for its operations and decision-making processes. Tally believes that true DAOs operate onchain.

💚 Arbitrum

AIP-3 [Non-Constitutional] Fund the Grants Framework Proposal Milestone 1

summary: this proposal requests 3,360,000 ARB (0.07% of the total treasury) to fund the first of three milestones in a comprehensive plan to build an Arbitrum DAO pluralistic grants grogram. at the end of milestone 1, pluralistic labs will have delivered: DAO native workshops, the grants program, and the grants program report.

voting ends: august 14th

🚊 ENS

[EP4.1] [Executable] Approve further actions and strategies for the Endowment

summary: this proposal introduces additional actions and strategies to the ENS endowment, which enhance the endowment’s performance, adaptability, and diversification. permissions granted to kartpackey require regular updates, and this is one.

voting ends: august 3rd

🟡 NounsDAO

Lowering the USDC amount held by the Payer contract from the current 500,000 USDC to 200,000 USDC

Summary: with the first version of the upcoming upgrade the treasury assets are currently held by the tokenbuyer and the payer contracts are not included in the forking calculation so members who decide to fork wouldn't receive their fair split. this would amend to ensure fair forking.

Voting ends: August 6th

Integrate 8/8 Anniversary Art 2023

summary: to celebrate the 2-year anniversary of Nouns DAO, 6 contributors submit 8 new heads and 2 new accessories for approval and addition to the protocol.

voting ends: august 6th

Support Creative Commons

summary: CC0, a "no copyright reserved" option in which all copyright is relinquished and dedicated to the public domain, requests 100ETH to maintain licenses.

voting ends: august 6th

📝 what we’re reading & listening to

📄 “New U.S. Senate Bill Wants to Regulate DeFi Like a Bank” by danny nelson stringent anti-money laundering requirements on defi protocols could be the shift to the forefront of relevant regulatory questions for DAOs.

🎥 “Designing Effective Governance” from porter smith of a16z

a cool history lesson with some insight into the future from the firm at the forefront of it all the history, and some comparisons between web3 governance systems and those we’re used to, your time-tested democracy.

🐦 “DAOs are meant to be…” (and the discourse below) from lemiscate

ah, the age-old question…should DAOs have a CEO/board? it’s a nuanced one, but this is a simple take on what it means to truly differentiate from a typical web2 organization.

💫 DAO talk: do you even decentralize, bruh? || DT weekly ep. 48

🤭 meme of the week

Tally is excited to support @arbitrum DAO's upcoming security council election! check out this tweet for a sneak peek of the interface thousands of delegates will use to decide the (6) members of the Arbitrum DAO security council! and learn more about the council here.

~ coolhorsegirl 🐴

p.s.- everyone loves a dog pic, don’t they? introducing my flatmate’s new french bulldog, gherkin (that’s what the british call a pickle).