[ARFC] Enhancing Aave DAO's Liquidity Incentive Strategy on Balancer

[Dydymoon]

Gm all ! As I couldn’t reply on the initial post which was closed by ACI very fast after the vote ended, I’ll answer here:

@MarcZeller

As authors of the ARFC and TEMP CHECK framework , we at the ACI are well-versed in the governance rules.

Besides adding buraucracy/governance filters with high holdings/delegation needed to post & multiple steps to pass a vote (2 forum posts + 2 snapshot + 1 on-chain AIP for most decisions), this framework might also be incomplete & misleading as explained below, creating situations like this one where the snapshot vote shows “quorum reached” when it could not be.

Moreover, yes ACI is the author, but it didn’t stop you from bypassing the framework in situations less complex than this one such as Direct to ARFC posts when estimated necessary.

@MarcZeller

Quorum is defined by 320k YAE votes. No YAE option reached this threshold, so the quorum was not met.

According to the voting guidelines established:

@MarcZeller

• 3 Vote Options: The vote should have at least three options: YAE (Yes), NAY (No), and ABSTAIN.

• 4 Quorum: The vote should reach a quorum of 320,000 YAE votes.

• 5 Differential: The YAE votes should exceed the second-largest vote option (either NAY or ABSTAIN) by at least 80,000.

The framework is ambiguous & incomplete in this case as it doesn’t include situations with several YAE options (or even other voting types involving several options), which can be restrictive for DAO decisions in some cases.

It does mention that the quorum should reach 320K YAE VOTE(S), meaning that:

• Snapshot parameters on the Aave space are incorrect & misleading for the governance participants because the quorum is calculated with the total votes cumulated there (all options included).

• If this was to remain unchanged, all proposals should include a reminder of the quorum needed for each option to be valid. (I know snapshot settings are not very flexible, but this shouldn’t prevent transparency in the proposal)

• Since it’s not specified in the framework, it’s safe to assume that 320K total votes can be reached with several YAE options (It was the case in the proposal with 311K YAE on Option 3 + 63K votes on Option 1 for a total of 374K / 376K of YAEs votes).

@MarcZeller

Proposal Cycle:

@Dydymoon

This AIP execution should fall under ACI’s Skyward program scope (cc @MarcZeller for confirmation).

I also requested the ACI assistance at the ARFC forum stage but the demand was ignored, only comment before the vote was “we’ll vote NAY” without arguing or suggesting an alternative.

@MarcZeller

Your past experiences in the Stake ecosystem and at TokenLogic underscore the importance of adhering to established guidelines. It’s evident that not following these guidelines, combined with a lack of team collaboration, has had repercussions on your professional trajectory.

This type of personal attack & insinuations were not needed.

For context, I contributed there for 3 & 6 months respectively & I decided to leave both places because of the working conditions which were not including the freedom to share my thoughts & didn’t fit my transparency criterias.

Imo that’s the most important when working in a decentralized ecosystem, so I avoid people trying to censor my thoughts before it’s even on the forum. (The fact that it happened a few times was actually one of the reasons why I left TL btw)

Anyway, I’m confident about my skills and the value I bring to the Aave DAO. Plus, it’s easy to see who knows their topic when looking at treasury management posts/comments, so this attempt to discredit me is sad but not a big deal.

Moreover, I did:

• Wrote in the TC that the ARFC would be posted by TokenLogic (but Matthew refused, so I posted it myself, as the OTC deal was time sensitive).
• Tagged both ACI & TL in the ARFC post to collaborate on their expertise domains.
• Replied to every comment with arguments & data/calculations
• Coordinated discussions with Aura stakeholders to validate the deal terms
• Revised & included a 3rd option aligned with Karpatkey’s comments

But the ACI:

• Ignored the Skyward assistance request
• Didn’t voted despite being a paid delegate
• Removed my ENS from snapshot space authors during the vote without notice
• Ignored Options 1 & 2 & redirected the repost to Karpatkey
• Closed the discussion by closing the topic before I could reply

I know anyone who reads the initial post & comments will agree that if someone lacked of team collaboration here, it wasn’t me.

Anyway, the revote imposed can be argued for the reasons described above, as the proposal can already be considered valid for the AIP stage.

@Karpatkey

This is an essential topic for the long-term strategic positioning of the Aave DAO; therefore, we are re-engaging the community towards reaching a consensus around Option 3.

However if the community prefers to revote, there are a few points to reconsider in Karpatkey’s post:

• As mentioned by @0xlide, a revote must include all options in the initial post, which explains pros & cons of each possibility, as it’s a complex topic.

• This post is about the revised option 3, but it’s missing the rewards utilization for long term accumulation part (AURA earned locked for vlAURA & replaced with USDC or AAVE from the treasury to bribe with BAL)

• Re voting is also a good opportunity to look deeper into the technical implementation & faisability of this option (where the auraBAL should be staked, how to optimize the rewards & bribes management etc), which would then not require another proposal.

• Once technicals are defined, “Specification” & “Next Steps” sections can be added to this post to be valid according to the governance framework.

• Confirm that the deal terms & TWAP calculations period are still aligned with the Aura DAO stakeholders agreements (if not done already).

Thanks @Karpatkey for proactively reposting. I would have been glad to co-author this proposal as this post contains the revised option 3 proposed together, but I don’t mind you posting it as long as it’s complete & helps move forward with the liquidity strategies.

@MarcZeller

Ensuring the long-term sustainability of the protocol and the capability to cover service provider expenses is of utmost importance to us. Unless this initial batch of proposals yields positive outcomes, the ACI will be reluctant to support further treasury spending on other protocol governance tokens.

It’s worth reminding that Option 1 does not require any extra investment, as it’s only optimizing existing holdings while preserving the DAO runaway.

Also, the AURA acquisition proposed in all options are smaller than the $2M CRV, and most of AAVE & GHO liquidity is on Balancer, so it’s more efficient for the DAO.

What alternative do you have in mind to optimize the Balancer liquidity strategies if none of the options is approved after the potential revote ?