BIP-198, a proposal that seeks to create an Ecosystem Council to protect major participants and service providers within the Balancer ecosystem, was passed by Balancer DAO on Monday night. Out of the 270 votes the proposal received, approximately 93% of the voting power endorsed the idea.
It is not uncommon for regulators to go after participants in the crypto space. In October 2022, a Federal court ruled that the Commodity Futures Trading Commission (CFTC) could serve Ooki DAO through its website bot and forum post for allegedly offering illegal leveraged and margined trades without a Futures Commission Merchant designation or KYC program.
Drawing from such experiences, the creator of BIP-198, Danko, noted that “major participants and service providers (MPs-SPs) to the ecosystem were exposed to potential regulatory and legal liabilities.” The Ecosystem Council is meant to manage this risk. In the event of unbudgeted litigation costs or government fines, the council will seek independent legal counsel to confirm the use of funds from the self-insurance fund.
Speaking of the self-insurance fund, the proposal suggested adding an extra $750,000 to the purse, bringing the total value of the fund to $1.25 million.
Meanwhile, the MPs-SPs umbrella will cover the Balancer Foundation, Balancer OpCo, Orb Collective, Balancer Maxis, Balancer Grants, and Balancer Labs. Representatives from each of the actively-funded SPs will have an internal monthly meeting “to ensure all SPs are strategically aligned across the ecosystem.”
Balancer is an automated market maker (AMM) that enables users to trade cryptocurrencies with low slippage and high liquidity. The decentralized exchange (DEX) is governed by its community of token holders through the Balancer Governance Token (BPT) and its associated Balancer Improvement Proposals (BIPs).