Blockchain at Michigan Delegate Profile
Wallet Address: 0x13BDaE8c5F0fC40231F0E6A4ad70196F59138548
ENS: michiganblockchain.eth
Twitter Handle: @ UMichBlockchain
Website: General Site
Areas of Interest: Tooling, Improving Protocol Decentralization; Improving Governance Participation
Organization Overview:
We are Blockchain at Michigan (BAM), a student-run organization at the University of Michigan, involved in building blockchain leaders for nearly five years. The organization contributes to the space via education, consulting, and governance. Our team has actively participated in governance voting and spearheading proposal development for three primary protocols: Uniswap, Aave, and Compound. Each protocol is assigned a designated expert, responsible for continuous monitoring of the protocol’s developments on forums, social media, and voting platforms like Snapshot. At committee meetings, protocol leads share updates with the entire governance team on active proposals and debate the pros/cons to reach a collective decision on how to vote with our delegated tokens. We have a high proposal participation rate, having reviewed and voted on nearly all incoming proposals for each delegated protocol. Prior to publicizing proposals, we collaborate with numerous stakeholders from investors, DAO service providers, and other protocols to draft proposals properly. Our team has also successfully led the establishment of proposals from start to finish. For example, we recently wrote and helped pass a proposal to launch Uni v3 on Avalanche via collaborations with Ava Labs and LayerZero labs.
We are excited to work with ARB token holders by offloading their need to continuously monitor Arbitrum governance. Our team is well-versed in the blockchain space and have been following the Arbitrum ecosystem for some time. Delegating tokens to forward-thinking groups like Blockchain at Michigan directly decentralizes protocols. By delegating to our organization, you permit your tokens to be effectively and actively used for furthering innovation on a rapidly expanding protocol. We aim to have the Arbitrum DAO serve as a role model for decentralized community participation in the development of the leading rollup on Ethereum.
We believe in:
- Empowering a multichain, interoperable future that the Arbitrum foundation is progressing via the development of permissionless, transparent Optimistic Rollups, especially with the release of Arbitrum Orbit
- Fostering an inclusive community that encourages diversity, education, and open-minded discussions to produce the best ideas
- Sustainability by ensuring the long-term success of the protocol along with governance token value accrual for the benefit of the DAO, without negatively impacting dapp users
Sample Voting Issue #1: Flipside/Uniswap Incentive Program
- Vote: For
- From a financial perspective, we are in support of a grant-based system that is self-sustaining, just as the one posed by Flipside. If both analytics development and economic gain for the protocol can be established, then we see a win-win situation. Flipside’s tool to calculate and visualize v3 returns has been helpful to numerous liquidity providers–although it sometimes displays inaccuracies. The development of an ecosystem of analytics tools from the community in general would therefore be beneficial to Uniswap as a whole, especially due to the ambiguity and complexity surrounding the concentrated liquidity mechanisms. We would, however, amend the control and distribution of funds. Instead of fully prescribing funds to Flipside, it would be best to form a conglomerate of DAO and treasury service providers, like Llama, Chaos Labs, etc. Each member would be required to disclose why they should be part of this committee, along with a resume/track record of activity in the space. This way, the grant committee will be more diverse, and each contributor will be compensated fairly.
- The ability to have an efficient and successful implementation is improved by providing Flipside a single seat. There will always be a battle between decentralizing control in the name of security, while simultaneously preserving speed via centralization. We believe in a balanced middle path, where we don’t stifle efficiency but still have reliable actors moderating a system. For this proposal, we hold the position that there should have been a preordained election process in which each candidate posits their credentials in the forums. Thereafter, the community votes on the committee via a Snapshot vote, with each of the committee members hailing from different organizations. This will foster a democratic election process, putting a handful of community-elected representatives in charge of the granted capital. Such a process would also remove the need of an oversight committee, as the DAO itself can act as the failsafe. And the mere establishment of a 7-member committee enables a decent degree of efficiency–it’s certainly faster than letting the entire DAO vote on capital allocation decisions.
Sample Voting Issue #2: FEI RARI Hack Reimbursement
In April 2022, Rari was hacked for $80M due to a reentrancy vulnerability in its Fuse lending protocol. After much debate, an initial snapshot vote (FIP 106) to reimburse affected users was passed in May 2022. However, a subsequent on-chain vote to repay Fuse bad debt (TIP-112) failed to pass a month later. Finally, the Fei Protocol team raised another vote (TIP-121b) for full reimbursement, which passed and was executed in September 2022.
When considering reimbursement for a hack, it’s important to consider from both a user’s and the protocol’s perspective. If users were aware of the risks involved in participating in the protocol and had signed an agreement stating so, they may not be eligible for full reimbursement. However, if the protocol failed to warn users about potential risks, a split or full reimbursement could be considered.
It’s also important to consider the sustainability of the protocol. Full reimbursement may not be practical, as the protocol needs time and resources to repair the codebase and restore its brand. A split reimbursement may be a preferable option. To execute a split reimbursement program, the funds could be aggregated to a multi-sig wallet controlled by a community-elected committee, which would be vested over a certain time frame. This would allow the protocol time to deal with the aftermath of exploitation while ensuring users’ funds are safe.
In the case of the FEI RARI Hack, a split reimbursement would likely be a better option.
We would like to highlight some other issues that emerged during the governance process discussed above. Specifically, the first vote, which approved full reimbursement, was actually just a temperature check. This is a recurring issue, as we have seen similar drama in other decentralized governance processes, such as the choice of bridge for BNB chain deployment for Uniswap. To prevent outcomes from being flipped by new and unseen voters in the second voting stage, it would be helpful to restrict voting entities to those who participated in the temperature check or a whitelist.
Another concern is that the voting procedure is not fully transparent, and the bandwagon effect can undermine the independent ethos of decentralization. A blind voting system (like through the commit-reveal scheme) would help eliminate these concerns and ensure a more equitable and transparent governance process.
Languages we speak and write: English, Mandarine
Possible Conflicts of Interest: We are active governance contributors to Uniswap (3.5M UNI), Aave (80k AAVE), and Compound (50k COMP).
Please reach out to us at defi-delegates@umich.edu or via Twitter @ UMichBlockchain if you have any questions or are hoping to learn more before delegating to us!