​​Governance Rush 🌾👨‍🌾 2/2

So how much does this governance cost? 🤷

We have been on the governance train since over 2 years ago! Check this post, for instance - hottg.com/blockchain_lobsters/441. Back then, governance participation was just a mere single digit percentage of token holders. Even when there were some incentives, the market didn’t want this… Now we are in a bullish market, governance actually yields strong yCRV rewards like in YFI, so it makes more sense to participate! The levels of inclusion and in the double digits now of token holders.

But like with any governance, it’s still basically plutocracy. Smart people will say “go for Quadratic voting sir” and they will be right, but it doesn’t fix things 100%. See this cool metric: twitter.com/AndreCronjeTech/status/1297757154691162112. The participation is still quite low, and hundreds of millions of intertwined economic effects are in the hands of a few (responsible) people. Which is how it has always been, so that is not a surprise. But the question is how to activate those other people?

So what fixes this apathy? 🤔

The experiment I am eyeing - PowerPool

This won’t fix everything either. But it’s pretty interesting.

So when Anton made a twitter post about asking on how to increase governance participation - many thought “ser just give extra rewards”: twitter.com/k06a/status/1298347312603897857. Moreover, staking LP tokens is also not the best idea at all times as galaxy brain Tarun points out: twitter.com/tarunchitra/status/1298359745426993159. And as we see from Andre’s post, even big yCRV (real dividends!) do not turn traders into passionate protocol participations. Most people just won’t do it.

So some have been thinking of creating parliaments, or let’s say or “Trade Unions” in a way where minority holders would be able to participate and make their small voices heard. Meta-DeFi Democracy as PowerPool calls it: medium.com/@powerpoolcvp/powerpool-the-tool-for-meta-defi-democracy-8bb82f02f40. For the minority token holders, PowerPool expands utility of governance tokens by adding cashflow and influence farming — an opportunity to continually grow token stake. For like what, a few billion dollars protocols? Kinda scary.

One has to note that buying and selling introduces new issues. However, it’s not as easy to find enough lending weight in any protocol to really get the majority of the quorum with flas loans. VoteLock of CRV went ahead and figured out this attack vector right away, and other governance coins are thinking of how to implement measures to prevent such attacks. Super interesting!

I might try to dump my CVP testnet tokens on you! So keep that in mind.

🦞 I would like to turn this little post into proper research with data, governance votes, participation across protocols, and so on. Willing to subsidize your time with coins. Please let me know if you can join this! We can look into how forks abuse the notion of a governance token and yield no meaningful returns, and all that stuff. Thanks for reading 🙂

PS: a cool post by Arthur must-read - https://blog.bitmex.com/dreams-of-a-peasant. Although seems like he spends more time farming than improving his casino xoxo

crypto eli5

Forwarded from Crab Notes 🦀

​​Governance Rush 🌾👨‍🌾 2/2

So how much does this governance cost? 🤷

We have been on the governance train since over 2 years ago! Check this post, for instance - hottg.com/blockchain_lobsters/441. Back then, governance participation was just a mere single digit percentage of token holders. Even when there were some incentives, the market didn’t want this… Now we are in a bullish market, governance actually yields strong yCRV rewards like in YFI, so it makes more sense to participate! The levels of inclusion and in the double digits now of token holders.

But like with any governance, it’s still basically plutocracy. Smart people will say “go for Quadratic voting sir” and they will be right, but it doesn’t fix things 100%. See this cool metric: twitter.com/AndreCronjeTech/status/1297757154691162112. The participation is still quite low, and hundreds of millions of intertwined economic effects are in the hands of a few (responsible) people. Which is how it has always been, so that is not a surprise. But the question is how to activate those other people?

So what fixes this apathy? 🤔

The experiment I am eyeing - PowerPool

This won’t fix everything either. But it’s pretty interesting.

So when Anton made a twitter post about asking on how to increase governance participation - many thought “ser just give extra rewards”: twitter.com/k06a/status/1298347312603897857. Moreover, staking LP tokens is also not the best idea at all times as galaxy brain Tarun points out: twitter.com/tarunchitra/status/1298359745426993159. And as we see from Andre’s post, even big yCRV (real dividends!) do not turn traders into passionate protocol participations. Most people just won’t do it.

So some have been thinking of creating parliaments, or let’s say or “Trade Unions” in a way where minority holders would be able to participate and make their small voices heard. Meta-DeFi Democracy as PowerPool calls it: medium.com/@powerpoolcvp/powerpool-the-tool-for-meta-defi-democracy-8bb82f02f40. For the minority token holders, PowerPool expands utility of governance tokens by adding cashflow and influence farming — an opportunity to continually grow token stake. For like what, a few billion dollars protocols? Kinda scary.

One has to note that buying and selling introduces new issues. However, it’s not as easy to find enough lending weight in any protocol to really get the majority of the quorum with flas loans. VoteLock of CRV went ahead and figured out this attack vector right away, and other governance coins are thinking of how to implement measures to prevent such attacks. Super interesting!

I might try to dump my CVP testnet tokens on you! So keep that in mind.

🦞 I would like to turn this little post into proper research with data, governance votes, participation across protocols, and so on. Willing to subsidize your time with coins. Please let me know if you can join this! We can look into how forks abuse the notion of a governance token and yield no meaningful returns, and all that stuff. Thanks for reading 🙂

PS: a cool post by Arthur must-read - https://blog.bitmex.com/dreams-of-a-peasant. Although seems like he spends more time farming than improving his casino xoxo

hottg.com/crypto_eli5/856

4.6K viewsAug 27, 2020 at 10:06