Cream Finance Partially Delists FTT Amidst Governance Contention

Cream Finance – a lending protocol for nascent DeFi tokens – has hosted a governance poll around the collateral parameters for FTX’s FTT token in light of severe borrowing abilities.

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.

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.


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.

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.

Compound Introduces Autonomous Proposals for Delegated Governance

Compound – the leading US lending protocol – has launched Compound Autonomous Proposals (CAPs).


Autonomous Proposals are a new type of smart contract allowing users with at least 100 COMP tokens to submit a governance draft. When 100,000 COMP is delegated to the proposal address, a function is called which triggers a formal governance vote.

Given the current threshold of 100,000 COMP needed to create a proposal, CAPs allow smaller holders to make proposals while mitigating the risk of spam due to a 1% of tokens needing to be delegated towards the vote. While CAP tokens are locked during the delegation period,  proposers can either wait for the proposal to pass or terminate the proposal, ending the CAP and returning the COMP to the creator’s wallet.

For perspective, the change to 100 COMP for a CAP is a reduction of 1/1000 of tokens required. In US dollars, that is equivalent of 180,000,000 USD for a formal governance proposal as opposed to 18,000 USD needed to start a CAP.

The launch of CAP’s was kicked off by a vote to set the Pause Guardian to a 4-of-6 community multisig, signalling the first of many community-oriented proposals to further decentralize control of a leading DeFi protocol.

Alongside CAPs, Compound also released documentation on the allocation of the 775,000 COMP set aside for future incentives. With 500,000 COMP allocated to Coinbase Earn campaigns, the remaining 225,000 will be allocated to a community-owned Resovoir contract for future governance incentives.


With the launch of CAP alongside a reduced COMP emission schedule, it’s clear that Compound is taking a strong stance on progressive governance. With the ability for smaller tokenholders to be more active in governance, we expect Compound’s delegation feature to see a lot more use in the coming months.

In the meantime, be sure to stay up with Compound by following them on Twitter.

The post Compound Introduces Autonomous Proposals for Delegated Governance appeared first on DeFi Rate.

Aave Raises $3M for Aavenomics Governance Migration

Aave – a sector-leading lending protocol – has closed a $3M round on the back of LEND tokens in lieu of their upcoming Aavenomics upgrade.

Positioning themselves as a protocol for money market creation, Aave’s latest round saw $3M worth of contributions from Three Arrows Capital and Framework Ventures when LEND was $0.10 per token. Since then, LEND has soared to over $0.25 per token ahead of an Aavenomics governance upgrade in which LEND will migrate to AAVE with a suite of new protocol incentives.

This comes in tandem with other reputable funds like ParaFi and Spencer Noon’s DTC Capital, both of which have made it public that they also hold significant positions in LEND. DeFi Rate has also received intel that many other prominent DeFi funds have been accumulating positions in LEND, giving good credence to the DeFi token‘s parabolic growth in recent weeks.

Aavenomics Teaser

The raise foreshadows the launch of Aavenomics – a governance upgrade in which the migration to AAVE will introduce new protocol incentives through staking and yield farming. In short, users will stake AAVE as insurance against protocol deficits in return for both AAVE rewards and the vast majority of protocol fees. The staking module is expected to offer both vanilla AAVE staking in tandem with an 80/20 AAVE/WETH Balancer pool. This gives flexibility for those looking to stake with just AAVE while incentivizing those to provide market liquidity to Balancer in exchange for BAL rewards and swap fees.

AAVE staking comes in tandem with yield farming rewarding from protocol usage, similar to COMP and BAL liquidity mining schemas which have driven exponential growth in recent weeks. While the details have yet to be released, we expect users to earn AAVE rewards from lending and borrowing any of Aave’s 20+ supported assets along with special liquidity incentives similar to Synthetix‘s LP rewards.

Distributed Governance

Outside of vast protocol incentives, AAVE governance will distribute key decision making to tokenholders though onchain voting. Using Aave Improvement Proposals (AIPs), AAVE holders will dictate key protocol, market and risk policies for both Aave and different money markets like the Uniswap Money Market. Aave has vocalized that its governance process is meant to stimulate large amounts of discussion before going to an onchain vote, contrary to what we’ve seen so far with Compound and it’s 48-hour window voting periods.

These upgrades will be publicized in a formal Aavenomics governance paper in the next two weeks, kicking off a countdown to Genesis Governance in which LEND tokenholders will be able to vote on the start of AAVE migration in tandem with the proposed incentive allocations mentioned above.

Credit Delegation

Last week, we covered Aave’s proposal for Credit Delegation, essentially letting any two parties enter into undercollateralized lending agreements to use a counterparties capital as collateral to draw a line of credit with aTokens. While the program is set to be largely limited to OTC trading desks and exchanges to start, Credit Delegation is another example of Aave’s continuous innovation in the vibrant DeFi sector.

Aave Continues to Shine

As if it wasn’t clear enough, Aave has solidified itself as a force to be reckoned with in the great crypto landscape. With top firms publicizing their token holdings in tandem with the upcoming Aavenomics, it’s clear that the protocol for money market creation has a very bright future lined up for the coming months.

It’ll be interesting to see how the lending wars pan out, with protocols like Aave, Compound and bZx fighting for TVL in a rapidly growing sector full of strong incentives.

If one thing is for sure, DeFi Rate plans to play a big role in Aave governance and will be introducing a formal protocol bid upon the launch of Genesis Governance in a few week’s time.

To stay up with Aave, be sure to follow them on Twitter or join the conversation on Discord.

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The post Aave Raises $3M for Aavenomics Governance Migration appeared first on DeFi Rate.