Early 2022 Meta-Governance Status Report: Who Is Using Meta-Governance?

Meta-governance activities are quickly becoming mainstream in the cryptocurrency ecosystem, and DAOs can achieve optimal strategies for superior growth and value creation by leveraging the technology and resources of other DAOs.

Meta-governance is when Protocol A holds Protocol B’s governance tokens and uses those tokens to vote on Protocol B’s proposals. It’s worth mentioning that we don’t have a standard approach to meta-governance; a DAO will employ specific meta-governance mechanisms and strategies that best suit its operations and goals.

In order to understand recent meta-governance activity, this article asks a fundamental question. Who is using meta-governance in cryptocurrencies? To answer this question, we will examine the following DAOs and examine the source of their meta-governance voting power, who votes on their meta-governance proposals, and the transparency of their meta-governance process.

Early 2022 Meta-Governance Status Report: Who Is Using Meta-Governance?

Active meta-governance participants

Index Coop

Index Coop is a Decentralized Autonomous Organization (DAO) responsible for building and maintaining structured DeFi products and cryptocurrency index funds. Currently, the most successful meta-governance mechanism is designed by Index Coop.

Index Coop currently performs meta-governance for the following protocols (Yearn, Compound, Uniswap); currently, meta-governance is only used for some products in the DeFi Pulse index.

Index Coop generates meta-governance voting rights from its cryptocurrency index The DPI (DeFi Pulse Index), however, the DAO hopes to extend its meta-governance rights to DAOs in its other index products, such as MVI (Metaverse Index token). When Index Coop builds an index fund, a basket of notes in the index may contain governance tokens that are used to vote on governance proposals from other DAOs. This collection of governance tokens can add up to a substantial and sizable voting group.

The Index Coop DAO votes on meta-governance proposals. However, if the 5% quorum is not reached, then a five-member meta-governance committee will vote on specific meta-governance proposals that do not reach the 5% quorum, and the committee will only serve a 5-month term.

Index Coop operates a very transparent meta-governance process, starting from the nomination and election of Meta Governance Committee members, to the DAO’s meta-governance steps; Index Coop publishes this information in the Index Coop Community Handbook.

Convex Finance

Convex Finance is a protocol that allows its liquidity providers to earn transaction fees and claim incremental CRV without locking up CRV. Liquidity providers can increase their CRV and earn liquidity mining rewards with very little effort. Convex Finance primarily manages the Curve Finance protocol with over 50% of the Curve voting power.

Before Convex Finance, investors in $CRV (Curve Finance’s governance token) used to lock their $CRV in Curve Finance to increase their LP stake and vote on the ruler. However this poses an important issue for $CRV holders who do not have LP positions. Curve Finance has created a marketplace to match LPs with $CRV token holders to address the lack of LPs. $CRV holders will earn more after this transaction than by directly locking their tokens on Curve Finance. $CRV holders delegate their $CRV voting rights to Convex Finance in exchange for larger returns. Because of this strategy, Convex Finance was able to gain more than half of Curve Finance’s voting power.

Holders of Convex Finance’s governance token, $CVX, will actively control Convex Finance’s voting rights in Curve Finance. The entire Convex Finance meta-governance process is transparent, and this is its guide; the purpose of the overall meta-governance process is to manage CRV inflation by assigning weights to each pool’s “ruler” and invisibly decide which Curve Pool gets the bulk liquidity.

Redacted Cartel

Redacted Cartel, a sub-DAO of Olympus DAO, influences DeFi governance by leveraging Protocol Controlled Value (PCV), especially within the Curve ecosystem. Redacted Cartel currently manages Convex Finance, Curve and the Olympus DAO.

Redacted Cartel uses a bond mechanism to accumulate volatile assets like CRV or CVX in its treasury. Users can bind specific tokens in exchange for a discounted Redacted governance token, BTRFLY, and let Redacted Cartel govern the protocol; this design is successful because Redacted is the second-highest holder of CVX.While Redacted Cartel’s meta-governance process is not completely transparent, the DAO’s goal is to influence the governance of the entire DeFi ecosystem by implementing the meta-governance process they designed.

PowerPool

PowerPool is an exponential mechanism based on Ethereum and trying to accumulate governance capabilities. Its initial product is a liquidity-incentivized DeFi index, which includes the meta-governance of compound protocols and treasury technology that generates cash flow for index token holders, produced and weighted according to its community; Powerpool currently has access to Yearn Finance, Maker DAO, Uniswap, Compound, Aave, Nexus Mutual and Synthetix for meta governance. Powerpool’s governance power comes from the Power Index (PIPT), which includes DeFi governance tokens. When using CVP, PowerPool’s governance token, token holders can meta-govern the other protocols mentioned above while ensuring that their interests are aligned with PowerPool’s. Since the best interests of Powerpool are the main goal behind PowerPool’s meta-governance, the entire meta-governance process is completely transparent on the chain.

Rabbithole

RabbitHole is a learn-to-money protocol that rewards individuals for learning cryptocurrencies by doing practical tasks on the smart contract blockchain; this approach incentivizes individuals to fall down the cryptocurrency rabbit hole and start their journey in the ecosystem Journeys in the system.

Rabbithole’s meta-governance power comes from governance tokens held in its treasury; through Rabbihole’s meta-governance pod, the protocol allows members of the pod to access tokens from protocols such as Aave, Uniswap, Lido, Mirror, Compound, ENS, PoolTogether, and Gnosis. Governance proposals are voted on. The Rabbithole meta-governance process is transparent, as the main voting is done on Discord; designated protocol experts summarize proposals and make voting recommendations to the pod. All past meta governance voting events can be easily found here.

Those interested in participating in meta-governance

Wildfire DAO

Wildfire DAO is a meta-governance DAO that was developed to bring together and unify community members from across the ecosystem, form new teams, and handle token design, governance, and coordination in a transparent and collaborative manner. Wildfire DAO is currently seeking meta-governance across four categories of the cryptocurrency ecosystem: DeFi (Aave, Element and Balancer), Public Goods (ENS and Gitcoin), Creator Economy (SuperRare, Bankless DAO and PleasrDAO), and Infrastructure and Tools (Rocket Pool, DAOhaus and Pokt Network). With the first season of Wildfire DAO still kicking off, there is still a lot of DAO meta-governance activity to come.

Volta DAO

The Fantom Network’s Volta DAO is a decentralized protocol based on the VOLT token reserve currency. Each VOLT token is backed by a basket of assets held in Volta’s treasury, and there is currently no information on what is included in the basket of assets backing VOLT tokens.

Volta DAO provides governance tokens with exceptionally competitive ROY in return. With these tokens, the Volta DAO intends to participate in the governance and farming rewards of other protocols, generating substantial passive income funding streams to increase the value of Volta’s native currency, VOLT. While there is no substantive information about the Volta DAO meta-governance process, nor the protocol for which Volt DAO wants meta-governance, the DAO is committed to empowering this protocol by being one of the most influential protocols in the entire Fantom and Avax network and its user rights.

Orkan DAO

Orkan DAO is a sub-DAO of Strudel DAO; Orkan DAO is a meta-governance protocol and wants to initiate liquidity on the Fantom Opera blockchain. The Orkan DAO plans to purchase governance tokens from the protocol, issue bonds, utilize liquidity meters and lock-up mechanisms as exchange incentives. At the time of this writing, in order to guarantee the yield of spirit.finance, 25000USD will be paid to Spirit exchange voters every week. This tripled the number of market participants and quadrupled the liquidity of FTM-ORK. By providing an average annual percentage yield of 300% on the liquidity of the Orkan DAO governance token, the Orkan DAO is currently the best performing farm on the Spirit Swap platform. Orkan DAO is also targeting LiquidDriver to start guiding liquidity through meta-governance. Considering that Orkan DAO is a fairly new protocol, the Orkan DAO meta-governance design draws strong hints of inspiration from Convex Finance’s meta-governance strategy as a tool to bootstrap liquidity from Curve Pools.

Apollo DAO

Apollo DAO is a yield aggregation protocol built on the Terra blockchain, which bills itself as a decentralized hedge fund, uses its DeFi products to accumulate governance tokens for the entire Terra ecosystem, and uses this meta-governance power to send Apollo token holders offer enhanced yields, and Apollo’s governance model is heavily influenced by Curve and Convex Finance’s governance model. Borrowing from Curve’s governance model, Apollo coiners will stake Apollo tokens for a specified period of time (up to 2 years) to gain governance power, and according to the length of time, the lock-up of each Apollo token will receive Additional zApollo. Borrowing from Convex Finance’s governance model, individuals who hold the protocol’s governance tokens can give up their governance rights in exchange for enhanced returns. What is currently underway is the Apollo xAstro Lockdrop, where users can lock Astro/xAstro for a certain period of time in order to Get additional Apollo tokens after the lockup ends. Depositors will be able to withdraw their Astro deposits, along with all accumulated earnings, after the lock-up period expires, however users will temporarily hand over governance rights to the Apollo DAO in exchange for higher earnings. By combining the functions of Curve and Convex Finance, the Apollo DAO has begun to build a treasury that will determine the direction of liquidity in the Terra Ecosystem.

Summarize

By investigating the current state of meta-governance in the cryptocurrency ecosystem, it is clear that DAOs are leveraging meta-governance to leverage the traction, technology, community, and utility of other DAOs to advance their unique goals and visions.

Meta-governance is being used to steer liquidity, improve education for newbies in cryptocurrencies, and ensure that the value of various index products and governance tokens continues to increase.

I believe we are still in the early stages of using meta-governance; as time goes on, more use cases will be created until we truly unlock the value of the large-scale DAO vision we’ve built; meta-governance is to ensure We can build a bridge to the DAO ecosystem, and through meta-governance, these protocols we create separately can run together to build a cryptocurrency ecosystem where everything is possible.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/early-2022-meta-governance-status-report-who-is-using-meta-governance/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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