LFGHO 2024 Summit - DAO Governanace: How the Aave Community Shapes the Future of GHO

[Music] thank kaik uh so hello everyone uh I'll just give a quick intro of myself and then we'll intro each of the panelists and jump straight into uh our panel topic and then we'll leave some questions to the end for the audience if you have any right so so a bit about me so previously I was part of the RV Genesis team that's the fifth engineer engineering hire uh at RV companies and then since then uh I've I've been part of the RV Grand style as a reviewer and then also now I'm building my own company called x23 where we apply large language models to web3 data so that's me um and I'll be facilitating this chat I will now call on um fig to give an intro just a quick intro about yourself and background yep hello everyone I'm Wonder of look found in we actually started in it in the a three years ago so time flies by and I also happen to do on the on the a liquidity committee so yeah awesome Andrew yeah so my name is Andrew uh I'm am a developer relations engineer at a Labs uh I actually have a very similar story to Fig my launch in web 3 career was actually three years ago at an eth Global hackathon um hacking on the a protocol and yeah nowadays I work on documentation developer support hackathons uh anything related to developer relations for a and go awesome finally Paul yeah hello everyone I'm Paul um I worked with Andrew and David in in a a few years ago then now for a few years I've been working on bgt lately mainly working on on the new governance V3 awesome very cool so I think we got a good a good uh covering of of the space at least the a protocol space on the panel um so I'll go through some questions to diving a bit deeper maybe let's start with Andrew about let's say your a companies um so maybe give us an overview of how how RV the new RV governance and go interact and sort of what significance does RV governance have uh with the go stable coin yeah so I governance plays a very pivotal role uh with the go stable coin um I would actually highly encourage people to go to Ether scan and look at the actual go token source code uh because you might be surprised at you know how critical a role governance plays uh because essentially the go token is has this concept of buckets and a facilitator has a Bucket Level and they're able to Mint go up to a certain level and basically all of those decisions about what facilitators um are enabled and what bucket capacities they have are all controlled by a governance um and I'm sure we'll dive into the panel like specifically about the features of a governance um that have been developed in the recent months that kind of lead to more participation uh but at a high level Obby governance basically uh controls the go stable coin Supply uh and also the uh within the context of the a protocol also has control over the interest rate mechanism and the different parameters that have to deal with supplying collateral and borrowing the go token um so essentially every aspect of the go token is controlled by other governance okay awesome that's that's a that's a good overview in yeah we'll definitely dive a bit deeper into those details a bit later um but but let's just touching on that the the interaction between governance and go how how are the changes made to let's say go parameters at the moment Andrew yeah so uh go parameters basically follow the exact same governance process as the core a protocol uh so a has a very structured process for essentially how something goes from an idea to actually being executed on chain um the a documentation goes through in detail basically all of the steps involved from uh basically posting on governance Forum getting feedback to snapshot to an actual onchain vote uh and now with a governance B3 um actually having voting on Cross chain so being able to vote on networks other than ethereum mnet uh we still having ethereum mnet be like the executor of a governance um so essentially that's how governance proposals come uh to the community is through this process of a governance which has onchain and offchain components um and once they reach that final stage of onchain execution uh that's when actual parameter changes are made to go awesome and most of the governance uh changes they'll start on governance. rv.com right yes exactly that's governance forum and yeah that's the the main way to introduce ideas to the community yeah okay perfect um and just quickly before I ask another question to another panelist what what do you want to see built by devs uh related to go yeah so we have a lot of uh exciting prize tracks payments facilitators vaults and Integrations um and really at a high level uh the projects that I think we're looking for are trying to boost the adoption and understanding of go um currently go can be minted on Shain uh but it's kind of limited as to what you can actually do with this token um because it is a stable coin it has a lot of utility for you know different payment use cases uh or basically any onchain action which involves you know transferring value but right now it's just doesn't have a lot of adoption or understanding or people excited about you know the unique properties of go so definitely trying to highlight what makes go unique and then also get it in the hands of users by building you know really nice looking and functional applications awesome awesome Andre is also one of the judges for The hackathon as well um so if you have questions yeah feel free to put them in the chat and and we'll go through them a bit later all right so moving on so Paul uh works for bgd labs um and they were the creators of the gov V3 um so so Paul how about give us a quick overview of what's new in in governance V3 for AR Yeah so basically maybe like first on on governance V2 to have a bit of context like you you had all the process in ethereum right like you created the proposals there you voted there and they get executed then once we started deploying on on new networks we on some of them we had Bridges using the native Bridges to move the result of the of the voting to there so there it could be executed and and the changes could be done in the protocol and so on right but this could only be done in some cases and some others was controlled by by multi-c so this was kind of not fully decentralized right so the way of of B3 now what we have is a fully decentralized system where in all the networks where AB is deployed it's controlled by the governance on ethereum so basically it's using ethereum as a kind of settlement layer while using the other networks uh that are cheaper are maybe more optimized and so on to boat so this way you have like AB can subsidize the boat so it's even free to vote on those networks right like uh we already have had three proposals with uh more users voting there even if their their um their balance is lower they can vote because it's not expensive to do it so we expect more more participation on this so this is one part of it like creating the proposals on ethereum boarding on polygon and executing on Optimus maybe and then we also have another important part that is we have an increase in in voting assets with this new system we have a way of utilizing the full balance of a so you can before you could only vote with a and stake a right but now we are also adding a A in the future we will probably add more flavors of a so everyone that uses a in any kind of other protocol can still use their balance so it's we don't lose um uh people to vote um other new things is for example we have now a representative system because um for example saves safe wallets uh smart contracts that have balances and so on they can they can choose a representative to vote for them in another Network this way it's it's another way of of fully utilizing balances that are somewhere that could not V could not actively vote before um yeah so this is this would be the the government system and this also works uh because uh we created uh A multi-chain system that we call the a delivery infrastructure which basically is an aggregator of bridges that have a different consensus in the different networks this is a way of um removing part of the centralization of the bridges so we don't actually have to trust a single Bridge right like we don't have a point of failure so for example on polygon we are using ccip we are using layer Z hyper Lane and the native Bridge right so once um a message to start a boat uh goes to polygon it gets bried by the four and then a consensus of 30 or four is done on on polygon to check that the messages are actually correct so once this is done the boat gets started so basically I think it's a big overview of of how this works yeah that's awesome yes I guess uh in summary is like more decentralization and then better participation uh by more people make it make it easier or cheaper for everyone to participate out of interest you said there was more participation for the recent proposals what what layers or um chains we're getting more partic got the most participation do you know uh for now I think the the three of the four proposals that we have had uh since New Year's uh in in fact the last week uh has been the boat has been on on polygon because right now the only active voting networks are polygon Avalanche and ethereum we always have ethereum just in case all the bridges and all the other networks get get hacked or whatever it doesn't work can always vote on the same network and then activate a flag that will there's an oracle that will signal on the other network which enables some uh some way of saving the situation but yeah so all the proposal the current proposals have been voted on on polygon and if in the last two three proposals on the old system we had around 15 people voting mostly delegators in the current ones we have had like 30 something uh okay voters a lot of them voting with one token like one token two token something yes quite nice yeah yeah very cool and that's probably important information for the hackers as well to just to know that you know most of the the votes are happening on polygon for V3 so it's important to deploy to polygon if you want to experiment with gd3 um so what are some things that devs can build on top of or integrate with the new governance of e3 uh that you'd like to see to go in some way currently for examp in in my opinion like we are missing a bit of visibility on on representation like it's it's very good like we have the the full delegation system and and the new representation system and so on right but we don't have visibility on who is representing who how much of the votes are being represented by someone uh this kind of stuff right which I think is quite useful uh that's lot analytics type stuff yeah yeah this and then maybe some some mechanic to to reward participation to to increase it would be nice maybe with with go yeah this this would be good I think like basically around build building stuff around increasing participation in governance which is quite quite important it can be about visibility of of the proposals on trying to explain in a Better Way what this proposal is doing what the effects will be uh this kind of stuff right because most of the proposals are like quite technical like increasing the interest rates of some token somewhere whatever like that you need a degree in mathematics to to understand yeah this uh this would be kind of cool yeah okay got it all right so yeah I guess there's a lot of experimentation that could be had with uh making governance more fun I guess fun for voters all right that's cool um moving on uh to Fig figu uh so so you mentioned you were on the what was it again the liquidity um helping with the peg restore the peg for go um so I guess one of the let's say elephant in the rooms is with the with the go dpeg or with the yeah the current the current price of go uh can you quickly explain sort of what happened and how is it being restored uh currently yeah sure so maybe just to add something um I not only did we start at an A hund but we're also an a grand recipient so maybe maybe some interesting conversation on these two but to get back to the peg U more globally right now what happens that Pro was launch uh uh it needed a bit more features to ensure stability especially because it's a very popular uh tool considering that a is a popular app lot of inlows that happened but with the interest rates that froze uh around treasury bonds uh what happened was that there were more interesting ways to farm than just holding gold so a lot of people were basically minting it because it was one of the easiest and cheapest ways to Mint it they were selling it for other assets so what we've been doing uh in the liquidity commit for starters was uh creating new uh incentive strategies to basically uh create uh deeper liquidity B for people to buy and to sell into the go uh this is not just simple 50/50 Pur but more complicated liquidity shaping that was led by Tok Bri on the committee in order for us to have liquidity without uh biasing it towards uh what was happening in term of transfers and the second thing we've done a lot is creating incentives to basically have more go that is sparked in it uh meanwhile we get first uh stability module that's coming and then the new interest rates so it's a progressive thing uh you can solve it one way what we're really happy about is that uh the when the committee really started strengthening especially around Tok Bru we were able to invert the trend uh from deviating from the bag back to re R rting toward holds it so it's a progressive thing hopefully will be done in a few weeks if not a few months at best but we're getting really close to it and at that point on score is back to $1 it will be able to shine as much as it's supposed to yeah awesome that's that's an awesome so essentially it was around deepening the liquidity for for people that wanted to swap in and out of of go am I getting that right it's one part of it uh it's deepening the liquidity but more than that it's creating what we call Healthy liquidity because what happens that if people provide a lot of liquidity but you have sell pressure you end up at some point where there's 90% that's CU towards uh uh against go so it's extremely hard for people to sh out efficiently that's the first part and the second thought is the way you want to scre liquidity is a way to incentivize your behavior so you want to reward people who are going to buy go and you want to I don't want to say punish but you want to uh prevent people from selling too much go at every time so right now it's entirely liquid right just to be clear but uh we basically created a system that rewards people who are moving back or who are actually moving into go okay so incentivizing yeah moving into go that's that's a pretty powerful thing um and you've received a grants oh you're reive an a grant from the a grant St for for that work which is awesome um but it's not for that work it's not for that work it's a we at Paladin we built a protocol that's called Jahan that's an Optimizer on top of go so it's basically the cheapest place for people to meet go the way we do is we socialize the St a and so people who have St a can come in and deposit it on our platform and people who own go uh wants go go can basically come and visit our platform and unless you're a huge Stak holder it's probably going to be cheaper on our platform what we're trying to build with this is the I want to call it a premium Club in a sense where it's going to be the cheapest place for people to access uh go simply by using the the unionized St a got it unionized St a I like it uh very cool with with that in mind what what do you think devs can build to help with uh restoring the go Peg like what would you like to see that's a really good question um no it's actually a really good question because go is built in a manner where long term there's going to be hundreds of opportunities around it it's also harder as right now uh a as da is the only uh uh I don't think it's Guardian the right name but the only one that owns buckets and that can actually M go that's I think is an important part uh because it limits the thing we can experiment around interest rates around different lending lending types Etc uh I do think uh what will help the most go is the generic answer will be just building bu but the truth is that we need to do more Global actual use cases for go simply like people can hold and use go as much as they want the closer we get to you can me you can basically just deposit your crypto assets on a and mint or even without minting it like you the flash style pay your rank pay your groceries Etc that's the closer you get to quote unquote Mass adoption and I think anyone in crypto dreams of being able to use go that way yeah that's really good point Andrew I think you had an idea that you wanted to chime in as well yeah actually um I I think that's a really uh good segue to say like the the utility of go comes from essentially what you're able to do with it how you're actually able to utilize it both within the world blockchain cryptocurrency web 3 and also just in day-to-day life um and I think that that's you know one of the big things that will help go long term is essentially just becoming more uh you know abundant uh in in the applications which you can actually utilize it for um and also emphasizing why go is unique compared to not only other stable coins but different types of payment currencies that exist today um so I think really the big um thing which differentiates go is essentially that it's tied natively to the a protocol um and the a protocol has a very flexible way to essentially collateralize different tokens and then borrow go um so as Pig mentioned uh the a facilitator is currently the only live facilitator uh but we do have Bounty tracks to essentially uh try to get people to build new types of facilitators and also new types of Integrations with the a facilitator and I think that those two things are really what differentiates go um and makes it really attractive to build on is the fact that it is tied so closely to this a liquidity protocol which offers all of these features that been developed over the years and all of this infrastructure for governance y for sure for sure so so I guess touching on that um we want hackers to build build cool essentially with with use utilizing go um and then also some ideas around uh let's say facilitators either uh becoming facilitators or integrating with the facilitators and any Alpha to share on that whether Andrew or Fel pole on like how how how should the hackers be thinking about facilitators whether should they even try to become a facilitator or should they try to integrate or what sort of steps should be taken anyone want to jump in I'm I'm down I'm probably not going to give the most governance proper answer I'm going to give like the the idealistic one in the sense that uh I'm not saying thousand one to become a facilitator but I think a should strive to have as many facilitator as it can at some point there's a ton of risk management considerations of course but uh if a building is building a new stable coin and even a new currency eventually uh and wants to become the central bank for it the only model is to have multiple hundreds and hundreds of banks that are actually around it going to enable it to become bigger and bigger a is Big it has a crazy reach and that's why so many people are here but that's why am here and that's why all of us are here right but uh we need much more than this if we want to deeply inra go uh and a into the ecosystem as a whole there's there's a ton of things that can be played around I think one that hasn't been talked about a lot it's probably something between uh credit delegation and what go can do especially because if you're minting go with another stable coin you can actually do it at a high LTV so you could do high a credit delegation with very low liquidation risk which creates some really interesting things you can do between different accounts and different partners so yeah that's a good that's a good idea actually um so so for those that don't know credit delegation is is one of the the features in RV it's not used as much as it it should be um but I recommend the hackers yeah really looking into credit delegation it's a pretty cool feature especially if you socialize um the credit in some way it's really cool um Andrew I think you had a some some ideas around facilitators as well yeah so um I mean what fig said at the beginning about how you know that's not really you know the governance approach to basically you you want to create all of these different facilitators and I would actually counter by saying that I I think that is probably the most optimal approach for a governance in the sense that any time a new facilitator is added to go essentially there is a risk and a reward and really you know the role of a governance is essentially to minimize the risk and maximize the reward and I think how you do that is essentially Building Systems which are like more robust and experimenting so I think that you know by having just one facilitator or having a very select you know core of facilitators with very high credit lines um essentially you're kind of putting go into this bucket you're saying it can only be used for these things whereas if you create a lot of different experience experiments with very you know low risk to the Dow by managing risk parameters and also trying to essentially amplify the value of decentralization making sure that decentralization is at the core of any of these facilitators um I think that's really how you expand the design space and so I would encourage people to think about how go could be integrated into any smart contract if there's a smart contract that you use today whether it be a liquidity pool um you know different types of any type of liquidity Market anytime there's funds basically stored inside of a smart contract and think about how could this potentially be utilized um to facilitate borrowing go or minting go against this type of collateral um and you know any type of experimentation is good experimentation um that's cool that's that's a good one Paul did you have anything to to add to this no facilitators I I agree like in the end it it relies all of this it relies on on on finding use cases or or even creating them right like on on the situation we are in like creating maybe even more more more powerful because in the end everything can can be done and not much is done yet yeah yeah yeah okay sure very cool um just I'm being wary of time now I think think we're running out of time um but let's say let's go around the circle again for some hack ideas that you'd want to see I mean we've covered quite a bit of go and some governance things some facilitator stuff uh do you have any hack ideas that haven't really been mentioned yet uh maybe start with Andrew I think you probably have the most ideas yeah well I actually have a full presentation coming uh in a few hours which is the main the main point of the presentation is actually going through the Bounty tracks and giving specific ones so I won't try to list the laundry list uh I'll just plug my talk there okay all good yes so 10 Andre talk if he want want to hear all his ideas um paulig did you have anything you want to add no I think it's it's fine yes there was one question in the chat that I think might be good to to answer it was why is the fact that go is native to a is an advantage um and I think it really comes down to the features of the a protocol uh essentially the a protocol allows you to have multiple collateral positions and multiple borrow positions within a single address um and this type of flexibility really does not exist for any other type of stable coin uh so I think that that's really the key advantage to being native to a is essentially that you can Leverage The flexibility and this really robust framework of risk parameters to really fine-tune how you're able to create really Advanced positions with lots of different collateral assets lots of different borrow assets um and then also leveraging the a governance infrastructure which we've talked about here I think there's also another element with which is really important it's how go potentially can be a cash machine and we have to say it I think it's important what represents for a the way a works a lot is that historically people deposited governance token and other different crypto assets and then mained stable coins against them right and a would take a certain BPS of the interest rates what happens with go is that instead they certain BPS of the interest rates a as a doubt just takes all of the interest rates and can redistribute them so there is a lot more flexibility about the way the fee can be shared around the system and something we haven't discussed much is I think the Avida would highly be interested at least personally I would be into what can be done with the different Fe systems for example from a facilitator standpoint there's a ton that can be done and I look forward to see what people will build on this F awesome very cool all right I think we're just out of time I think there's one one one question that just came in on the chat uh do you have any thoughts on utilizing facilitators to create a cross Chain Bridge with a native token of go using tools such as ccip anyone want to take that question yeah I think like this like uh the ADI could be used to basically Bridge um go right like go is controlled by by the governance it's if if we deploy go uh in other chains it will also be controlled by the governance on those chains right and as we already have this um cross chain communication system which uses different different Bridges like the aggregation of different Bridges which is more decentralized and just using one it could be cool to see like the use of this for for the the bridging as it's already there right and I think it could be used even without like changing it at all most probably so you referring to the um ad R delivery yeah infrastructure what's it called yes ADI ADI yeah awesome yes so Cena who asked the question yeah check out ad um if you want to yeah there there is a method there to to add um allow senders which are the the addresses allowed to to do cross chain communication on there so basically the need would be maybe at some other alloud sender for this specific kind of uh of token bridging and that's it awesome all right guys so just aware of time and KK is just joined joined the chat it was an awesome discussion and also thanks for making my life easier by monitoring the chat and just reading the questions directly so really enjoyed this thing Andrew I can't wait to uh see your talk about all the ideas that people can can work on and Pull and fake thank you for that amazing discussion and David thank you for moderating all good thank you for having us awesome [Music]