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Summary:

  • Celo governance considers adding MCO2 carbon credits to its reserve.
  • MakerDAO forum gets philosophical on the meaning of a DAO
  • Uniswap consensus check indicates desire to keep delegate voting

Adding Carbon Credits to the Celo Reserve

Celo.org is a blockchain focused on a mobile-first approach to blockchain, aimed at providing financial services in developing economies. Notably, the platform is host to US dollar but also Euro and West African Franc stablecoins.

The Celo reserve serves to collateralise stablecoins and consists of a blend of Celo (the platform's native token) along with BTC, ETH and DAI:

The management of the reserve is not yet fully decentralised and, at the time of writing, the reserve is heavily weighted towards Celo tokens. There is a desire to increase the holdings of BTC, ETH and DAI, but conversion of Celo for these tokens is being done slowly so as not to tank the price of Celo.

At stake in Celo governance proposal 31 is the inclusion of MCO2 as 0.5% of the reserve. MCO2 is a carbon credit backed crypto token. At the time of writing, it looks like the proposal will hit quorum and pass:

The debate!

The two opposing arguments in the debate are as follows:

  • On the one hand, the price of MCO2 seems to move much more like a random alt coin than like a carbon credit. You can see here how the price of MCO2 tanked through May as the crypto market fell - which is nothing like the movement in non-crypto carbon credits. This does not seem like a sound reserve asset from a price behaviour standpoint.
  • On the other side of the debate is the argument that the platform should get started by including some form of CO2 credit, even if the token is not perfect. Celo as a platform has a long term goal of including natural asset backed tokens as part of its reserve and is keen to make progress on this front.

My view is that crypto platforms in general seem to land on the side of trying things and taking risks over conservative reserve management. To some extent, I think this is good for discovery. Still, I am concerned about the quality of reserves and collateralisation generally across crypto platforms.

MakerDAO forum gets philosophical on the meaning of a DAO

@g_dip pulled together an interesting reflection on the nature of DAOs on the MakerDAO forum. Here are some interesting points made:

  • DAOs (decentralised autonomous organisations) have recently been approved as a form of LLC in Wyoming. g_dip makes the point that this form of DAO is only a DAO in name and differs little from an LLC.
  • "A DAO is a censorship-resistant organization."
  • "While public blockchains cannot scale beyond the average computer processing power of its users without sacrificing censorship resistance, a DAO cannot scale beyond the average brain processing power of a human being."

Worth a read.

Uniswap & delegate voting

Certain blockchains allow vote holders to delegate their votes to another address. This is the case with Uniswap. This week there was a consensus check (informal vote) to roll back delegate voting on the basis that it was giving too much power to a small number of wallets. The snapshot vote ended yesterday with over 99% of votes voting against the rollback of delegate voting.

Many blockchains have the problem of low voter engagement. With delegate voting, at least it allows voters to delegate their vote to someone more engaged. On the other hand, that can centralise power.

In many cases of governance, those who are active in forums and with proposals hold just a small share of the total votes. Often, these smaller voters may not even have enough votes to pass quorum (a minimum number of votes required for the proposal to pass, regardless of receiving a majority in favour). So, there are often big mismatches between engagement and voting power in governance. This is a topic that will reemerge week after week.

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