The 5 finalists with the most votes will be elected as the official members of Sashimi Governance Committee.
This paper is an update of Powerpool’s meta-governance vision
While we discussed Crypto ETFs in our Index Coop article, PieDAO’s take on DeFi ETFs is quite distinctive and worth looking at in greater…
We first want to give a large thank you to our community for supporting us in the development of the DeFi Money Market (HYDRA) ecosystem…
Decentralized Finance is the latest disruptor coming out of the blockchain and cryptocurrency space. DeFi connects decentralized financial…
Decentralized community governance isn’t always so decentralized.
This week, one bit of news really grabbed my attention: Dharma getting criticized for allegedly trying to capture Uniswap governance.
Dharma is the company behind a crypto payments and exchange app, a sort of Ethereum-based cousin of Square’s Cash App. Or at least that’s what I previously used to describe it — if you visit the website now you basically only see mentions of DeFi and some very trippy images.
The Dharma website design is now very… daring. And inspired by Uniswap in some ways.
Like Uniswap and Compound, Dharma is backed by some traditional Silicon Valley venture capitalists and Coinbase. It’s also one of the most vocal “community governance” members of both protocols — shocking, I know.
But I don’t mean to single out Dharma here. They have legitimate interests in the matter given their tight product integrations with DeFi, and on Uniswap they’re trying to do right by their users who missed out on the airdrop.
If you take a stroll through the Compound or Uniswap governance dashboards, you’ll probably see the general issues I see with these types of “decentralized community governance” protocols.
Most proposals are submitted by a small clique of stakeholders, usually the team or some highly-related company (another name that often pops up is Gauntlet, which is funded by Paradigm, Polychain… and obviously Coinbase). It doesn’t help that making a proposal on Compound requires a fully formed technical implementation and 100,000 COMP (worth $10 million or so).
Sure, you may discuss things on the forums as a small holder. But I have serious doubts that those public forums are where the real decision-making occurs. To be fair, the Compound and Uniswap forums could not be more different. The former is a place devoid of life or fun, the latter rages with discussion and accusations.
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The rich get richer
Somehow, I feel that the token distribution schemes had a very, very strong effect on that disparity. Uniswap’s “reward anyone who randomly used us in the past” was definitely much more equitable than Compound’s “let’s distribute tokens with no lockup to whoever manages to pull in the most capital.”
In general, there’s nothing really fair about yield farming launches — the richer you are the more tokens you receive and the richer you get.
Most of all, this is not inventing anything new. It’s a corporate board, plain and simple. Corporate boards benefit the team and the already-rich who can devote capital to the venture, it’s just that with DeFi you get tokens instead of shares.
Honestly, crypto has always been oligarchical. And that’s fine, that’s human nature. But if we really want to make something different, we have to realize that our actions are taking us down the same path that formed the modern world.
Maybe it’s possible to have a truly decentralized governance system — whatever that means — but it certainly won’t happen when we actively reward wealth with control. (And control with more wealth.)
The blame games are getting out of hand
A story that made me chuckle is the sincere belief shared by some that YFI fell because Alameda Research (the company behind the FTX exchange) shorted it.
The blockchain doesn’t lie, and CEO Sam Bankman-Fried didn’t exactly deny it, so maybe it’s true.
Of course the logical reason for a bull to get irritated about shorting is that by doing so, bears create extra selling pressure. And that’s probably true, but one also has to remember that they provide extra buying pressure on the way down. It’s quite well established that futures — which make shorting very easy — dampen the overall volatility of the market.
Emotions are running high, and anger is usually associated with the bottom of a market cycle, so maybe this news is actually good?
But there’s another blame game that makes very little sense and suggests people are still crazy. Andre Cronje, the founder of Yearn Finance, is once again being attacked because people “aped in” to one of his unreleased projects.
It was basically an impermanent loss mitigation proof-of-concept for other developers to try. People put huge sums of money and then lost it — one particular address put in 1,000 ETH and got back 74 ETH.
But despite Cronje’s giant, stark warnings (see below) people were still bashing this as yet another example of him “testing in prod” and making people lose money.
Except that, well, nothing actually happened. The system worked fully as intended, nobody got hacked. This is just what usually happens when you pile into some random smart contract.
So, errr, maybe read the sign. Then there’s nobody to blame and we can all enjoy DeFi again.
Announcing Bancor governance & the Bancor v2.1 upgrade!
v2.1 brings impermanent loss protection & single-sided exposure to AMMs
60+ initial ERC20 pools are protected
Staking in protected pools generates $vBNT, Bancor’s gov token
— Bancor (@Bancor) October 12, 2020
The upgrade introduces a governance token wrapper – vBNT – generated by staking BNT in specific whitelisted Bancor liquidity pools. The v2.1 upgrade will change the tokenomics of the existing BNT token by introducing an elastic supply used to enable single-sided exposure & impermanent loss protection.
Existing AMM pools generally require users to take on exposure to assets outside of a user’s native holdings, inevitably incurring impermanent losses. While there have been many approaches to liquidity provider incentivization, it’s fair to say that no one has solved the puzzle of impermanent loss quite yet. Bancor’s new announcement looks promising and seems to be a fresh take compared to what is currently live on the market.
How Does It Work?
In Bancor’s new model, liquidity providers would accrue liquidity protection over time while collection fees from swaps, theoretically making the prospects of being a long term liquidity provider much more attractive.
Bancor will use its protocol token, BNT, as the counterpart asset in every pool, starting with 60 possible whitelisted pools, half of which have already been whitelisted today.
To learn more about the new governance token and upgrades made to the AMM check out Bancor’s blogpost here.
If you’re interested in staking BNT to receive vBNT and partaking in Bancor governance, check out their detailed staking guide here.
In order for any of the exciting changes covered above to occur, BNT holders must vote in favor of the Bancor v2.1 proposal. Voting on the proposal began today and last for 3 days. A quorum of 20% of staked vBNT will be required to approve the proposal.
To stay up with Bancor, follow them on Twitter.
Uniswap is a decentralized protocol for automated liquidity provision on Ethereum and a catalyst for the growth of decentralized finance.
Crypto investors have a new reference point for evaluating decentralized finance projects, thanks to a new risk indicator from DeFi Pulse.
DeFi Pulse announced on Tuesday the release of the DeFi Pulse Economic Safety Grade, developed in partnership with blockchain simulation platform Gauntlet Networks, to give users a way to better understand the risks they’re taking when locking value in DeFi protocols.
1/ Introducing the DeFi Pulse Economic Safety Grade
Created in partnership with the fine folks at @gauntletnetwork, economic safety grades allow users to more easily quantify and compare the risks they face using on-chain protocols. pic.twitter.com/9Iaw8xrOF0
— DeFi Pulse (@defipulse) October 13, 2020
The Economic Safety Grade is calculated on a scale from 0 to 100 and measures a protocol’s risk of insolvency, with higher scores indicating a safer investment. It’s another sign of an industry working to break into the mainstream and become more accessible to novice users.
DeFi, short for decentralized finance, is an emerging industry based on a variety of blockchain-based protocols that use code known as smart contracts to provide financial services like loans or interest. Instead of relying on centralized third-parties like traditional banks, DeFi protocols use value contributed by users in the form of cryptocurrency deposits to provide financial services; users receive interest income in return.
DeFi Pulse has become one of the leading indicators for tracking the growth of DeFi and identifying quality protocols, using blockchain data to measure the total amount of value locked (TVL) in DeFi protocols and providing basic information about projects’ functionality.
The DeFi Pulse Economic Safety Grade measures the risk of protocols becoming insolvent—that is, when the value of contributed collateral is less than the total value of all loans that have been issued. If a protocol becomes insolvent, users that have contributed cryptocurrency to be used by the project are at risk of getting back less crypto then they put in, or, in a worst-case scenario, none at all.
Grades have been assigned to two DeFi projects so far, lending services Compound and Aave, which earned a 91% and a 95%, respectively. Scores are updated in real time based on potential price movements and borrowing patterns.
DeFi is still a young industry, having only recently caught the attention of crypto enthusiasts—it took nearly three years for TVL in DeFi to gather its first billion, which it hit on June 2020, but less than four months to go from $1 billion to $10 billion.
The next wave of growth will likely rely on drawing in users with little or no experience with crypto. If so, the DeFi Pulse Economic Safety Grade could be a valuable tool in helping those users stay safe, invest wisely, and stick around for the long term.
It has been a while, but the day is almost here!. Governance is about to be enabled for TLT Finance and you will be able to use your warm…
40% of all $CREAM collateral is a single centralized exchange token.
— Spencer Noon (@spencernoon) October 8, 2020
What started as a Compound fork has since seen niche demand in providing money markets for DeFi assets that are not listed on other major lending markets due to their nascency and high-risk nature. For example, Cream was the first lending protocol to support lending for YFI, SUSHI, SWRV and UNI.
Now, Cream has come under fire after $75M worth of FTT, the native token of FTX, was used to borrow and short leading DeFi assets like YFI over the weekend. FTX’s CEO Sam Bankman-Fried recently took to Twitter to defend the use of $FTT on CREAM following many prominent community members suggesting Cream should delist FTT.
4) Let me start with a few high level remarks:
first, that I understand where this is coming from, and some version of it isn’t crazy!
There’s a lot of FTT on @CreamdotFinance right now.
I think that some version of a cap on single assets put there would be reasonable.
— SBF (@SBF_Alameda) October 10, 2020
In his tweetstorm, he seemed to imply that any sort of governance vote on CREAM to change FTT lending parameters would be unfair as a single address holds over 75% of all votes. Sam also goes on to provide evidence that his centralized exchange token has a lower risk of price crash compared to the basket of DeFi tokens that are listed on Cream.
Popular anon accounts pointed out that with FTT being a centralized token, Sam could manipulate it in various ways for his own profit at the detriment of other users on Cream and more broadly the entire DeFi ecosystem.
Over 40% of Cream’s collateral is $78M of $FTT (25% of float)
What happens during a liquidation? Well considering $FTT only has a daily volume of $2M and a whole $6 of liquidity on Uniswap…
A downward price death spiral is created and that $78M will never be fully covered pic.twitter.com/nJnBksL1Pw
— ChainLinkGod.eth (@ChainLinkGod) October 8, 2020
The Snapshot proposal on Cream Finance decided to partially delist FTT by decreasing its borrowing power on the platform. This comes in agreement with reputable names such as Robert Leshner, founder of Compound Finance, suggesting a middle ground of adjusting FTT parameters on Cream instead of getting rid of it entirely.
An early governance vote is seeing one-sided voting to remove the asset; it’s in the platform’s best interest to calibrate (but not remove) FTT/SRM.
— Leshner (@rleshner) October 10, 2020
The decision to reduce the FTT collateral goes to show that decentralized governance really rallies around large scale DeFi price swings, however these decisions historically takes multiple days to resolve in order to give everyone a fair voice.
While FTT’s borrowing power reduction can be seen as a win to the DeFi community, let’s keep in mind that these protocols are designed to support uses exactly like this, and at the end of the day DeFi remains a whale’s game to trade however they see fit.
To get more updates on Cream, follow them on Twitter.
The post Cream Finance Partially Delists FTT Amidst Governance Contention appeared first on DeFi Rate.
We are thrilled to announce that Boardroom has closed a $2.2 Million Seed Round led by @standardcrypto with participation from @IDEOVC, @coinfund_io, @variantfund, @hiFramework, @slow, amongst others https://t.co/mvNhneXc1r
— Boardroom (@boardroom_info) October 13, 2020
Boardroom believes that crypto networks will overtake traditional forms of management and ownership structures. It aims to provide the tooling & infrastructure necessary to scale the new ownership economy through a trusted governance dashboard by supporting protocols like Compound, yEarn Finance, Powerpool, Rarible, Yam, Aave, Balancer, and Curve.
The seed round comes with participation from Variant, CoinFund, IDEO CoLab Ventures, Framework Ventures, and Slow Ventures along with community-based organizations and angels MetaCartel Ventures, Divergence, The LAO, Stani Kulechov (Aave), Kain Warwick, Jordan Momtazi (Synthetix), Tarun Chitra (Gauntlet), Spencer Noon (DTC), Bollinger Investment Group, and Free Company.
Managing governance across multiple protocols is becoming increasingly more complex as different standards and voting frameworks are being introduced every day. The Boardroom Hub gives users a simple way to participate across various protocols all through one dashboard, offering extensions and context on proposals to easily inform decisions and delegating voting power to trusted individuals.
Besides building tools for high-value digital stakeholders to scale their governance participation across various protocols, Boardroom also aims to serve as an aggregator of fragmented data relating to governance. The Boardroom SDK will give builders an easy way to access standardized governance data across protocols. This data can be integrated into any native UI, providing a foundation on which others can continue to build on top of.
Boardroom started as a hackathon project named Kora Governance, the first minimum viable version of Boardroom was launched 4 months ago. Since then, the idea has been able to greatly improve the product with the help of feedback from proven builders and industry leaders such as Stani Kulechov, Kainwarick, Tarun Chitra, MetaCartel Ventures, and more.
The Boardroom team has made it clear that their doors are open if any builders want to chat about governance systems and UX. If you’re interested in participating in giving feedback on Boardroom or otherwise engaging with the team, join their Discord here.
The raise goes to show that governance is continuing to grow in DeFi as platforms like Snapshot and Boardroom offer tools for teams to quickly plug into voting tools to better engage token communities in a simple, intuitive fashion.
To stay up with Boardroom, follow the project on Twitter.
The post Boardroom Raises $2.2M Seed Round for Governance Management appeared first on DeFi Rate.
Adjustment Roadmap and Seal Monetary Policy
Not for sale and exclusively distributed to RGT Prime members and yield farmers on RGT Finance