Catch up on the latest happenings within DAO communities and the most relevant news from the DeFi space.
Despite recent setbacks, the DAO ecosystem remains a vibrant and growing space. The number of decentralized autonomous organizations (DAOs) has remained relatively stagnant over the past week, with DeepDAO currently tracking 2,406 of such organizations.
According to the Web3 analytics platform, the aggregated governance within DAO communities stood at 25,618 as of August 28, 2023, four new additions from the previous week.
The USD value of the assets held in DAO treasures have continued to decline. Over the past week, the total assets in DAO treasuries crashed by over $230 million to close the week at $19.7 billion. Stretching this decline, DAO communities have lost nearly $3 billion in asset value in the last one month.
Major DAO Highlights
dYdX Extends Grants Program by Six Months
The decentralized community of the popular dYdX decentralized exchange, dYdX DAO, has voted to extend its Grants Program (DGP) for an additional six months. Dubbed DGP v1.5 extension, the program will prioritize infrastructure, MEV, validators, and community initiatives.
To date, the DGP has approved around 120 grants with over $3.7 million in funding. However, v1.5 will be kicking things off with approximately $2M ($1.8M DYDX and $277k USDC) in unallocated funding. Meanwhile, the DGP will be restructured with two funding buckets and a separate operations contributor.
FWB DAO Rejects Attempt to Create a Three Seat Leadership Council
A proposal seeking to facilitate a leadership transition within the Friends With Benefit DAO has met stiff resistance, with more than 58% of the participants voting against the idea.
The proposal argued that there was a need for the DAO’s leadership to transition from its current mayor and operating team structure to a community-led model. The community-centric model will feature three-man leadership council that will focus on “increasing developer and creator activity, and use cases for FWB including events, content, software, and tools.”
Some of the voters did not outrightly dismiss the idea for a leadership council. However, faulted the proposal for being “rushed” and “half-baked.” One person wrote: “I support the idea of a council. But the proposal needs to include oversight mechanisms plus more detailed job descriptions.”
Balancer Loses Nearly $900k to Exploit Despite Warning
Balancer, an automated market maker (AMM) and decentralized finance (DeFi) protocol, was exploited for nearly $900,000 on August 27, 2023. The exploit took advantage of a vulnerability in the protocol's code that allowed an attacker to withdraw more funds from a pool than they had deposited.
The vulnerability was disclosed by the Balancer team on August 25, 2023, and mitigation measures were taken to reduce the risk of exploitation. However, the attacker was able to exploit the vulnerability before the mitigation measures were fully implemented. The attacker has been identified as an Ethereum address that has received two transfers of Dai (DAI) stablecoin worth $636,812 and $257,527, respectively.
crypto-investors-brace-for-new-tax-reporting-requirements">Crypto Investors Brace for New Tax Reporting Requirements
The U.S. Treasury Department and the Internal Revenue Service (IRS) have released proposed rules that would require cryptocurrency brokers and exchanges to report certain information about their customers' transactions to the IRS. The rules are part of the Infrastructure Investment and Jobs Act (IIJA), which was passed by Congress in 2021.
The proposed rules would require brokers and exchanges to report details such as the name and taxpayer identification number of each customer, the gross proceeds of each transaction, and the address of the wallet where the cryptocurrency was transferred.
The proposed rules are still in the early stages, and the public is invited to comment on them until October 30, 2023. The IRS is expected to finalize the rules in early 2024.
Tornado Cash Co-founders Arrested in Money Laundering Probe
The US Department of the Treasury's Office of Foreign Assets Control (OFAC) added Roman Semenov, one of the co-founders of Tornado Cash, to its Specially Designated Nationals (SDN) list on Wednesday. Semenov was added to the SDN list for his alleged involvement in laundering over $1 billion in illicit funds through Tornado Cash, a decentralized cryptocurrency mixing service.
Roman Storm, Semenov's business partner and co-founder of Tornado Cash, was also arrested in Washington, D.C. on Wednesday. Storm was charged with money laundering and sanctions violations.
The arrests and OFAC designation are the latest in a series of actions taken by US authorities against Tornado Cash. In August 2022, OFAC designated Tornado Cash and 45 associated Ethereum wallet addresses.
The move was criticized by some privacy advocates, who argued that Tornado Cash is a legitimate tool that can be used for legitimate purposes. However, US authorities have argued that Tornado Cash can be used to launder money and facilitate other illicit activities.
DAO Governance Updates
- A proposal signaling support to temporarily freeze spending on Decentraland DAO’s Grant Program has been ratified by the community.
- Aura DAO has agreed to channel the 150,000 OP tokens from the approved Optimism Grant to enhance and expand the Balancer ecosystem on Optimism. The funds will be used to incentivize voting in the Balancer protocol's Optimism deployment.
- The Stablelab team is set to receive $26,000 in USDC to create the first draft of the 1inch DAO Constitution.
- Following a community voting round that ended almost unanimously, the RARE staking protocol will be deployed to the Ethereum mainnet.
Active Voting Rounds
- Yearn DAO is on the verge of launch V3. The community is currently voting on a proposal seeking to ratify the design specification of V3 and “endorse its deployment, specify parameters and initial configurations.”
- Rari Foundation has submitted a proposal in Arbitrum DAO to integrate Arbitrum One with the open-source Rarible protocol. The integration is expected to cost $200,000, with $100,000 allocated to Arbitrum's portion.
- Days after failing to garner enough support from the community, Decentraland DAO is back voting on a proposal seeking to position the Decentraland Community as the final arbiter in grants revocation decisions.