karpatkey governance newsletter: February 2025
Your essential guide to DAO governance proposals, initiatives and innovation
Hello, community!
Welcome back to our fifth instalment. We’ve been delighted to see the positive reactions so far to our coverage of the industry’s decentralised governance. It’s our honour to continue delivering highlights and insights on all things DAO straight to your inbox.
This February has been characterised by a handful of DAOs seeking to push forward bold and innovative new projects and programs. Despite market turbulence and global uncertainty, the builders of our industry are clearly hard at work, seeking to bring the future into reality.
Let’s delve into some DAO developments 🧘
Headline: The Frontiers of Growth
From its earliest days, Arbitrum DAO has positioned itself as a trailblazer, demonstrating the power of decentralized governance in driving technological adoption. Through a consistent commitment to experimentation, the DAO has cultivated a thriving ecosystem—supporting community projects, fostering diligent governance, and accelerating the adoption of Arbitrum’s technology stack.
In February, the DAO once again pushed the boundaries of growth, both for itself and the broader industry. Two newly established committees—the Growth Management Committee (”GMC”) and the Treasury Management Committee (”TMC”)—took on the task of strategically deploying funds from the core Arbitrum DAO treasury. Throughout early 2025, both committees carefully evaluated their options before submitting their proposals.
The GMC has proposed an initial allocation of 7,500 ETH across three protocols: Lido, Aave, and Fluid. Specifically, the plan entails injecting 5,000 ETH into Lido’s Arbitrum instance to mint wstETH, which would then be deposited into Aave V3 to establish a foundational liquidity base for lending activities. The remaining 2,500 ETH would be deployed on Fluid to enhance ETH-based exchange and lending liquidity, accelerating the DEX’s growth on Arbitrum One.
Meanwhile, the TMC has outlined a plan to deploy 25 million ARB tokens across two managed treasuries: 15 million ARB for stablecoins and 10 million ARB for ARB-based strategies. After an open call for management proposals, the TMC selected Avantgarde/Myso and karpatkey to oversee both treasuries, while Gauntlet was chosen to manage only the stablecoin allocation. If approved, the shortlisted managers would receive an equal allocation of 5 million ARB per treasury.
Both initiatives now await formal governance approval. Notably, while the TMC identified multiple viable candidates, its official recommendation is to proceed only with the stablecoins managed treasury, opting not to move forward with the ARB-based strategy. This cautious approach highlights the complexities of growth within the Arbitrum DAO, reinforcing the importance of measured decision-making.
As the DAO deliberates, the potential impact of these initiatives is significant. If approved, they would inject substantial capital into Arbitrum’s DeFi ecosystem, further driving innovation and adoption throughout 2025. We eagerly anticipate the final outcome and are honoured to have been selected by the TMC.
📈 GMC’s Proposed Allocations | TMC’s Proposed Allocations
Key Topics & Proposals
Uniswap Unleashed!
By any measure, February was a monumental month for the Uniswap ecosystem. It began with the long-awaited launch of Uniswap V4 on January 31, marking a significant technical evolution. Shortly after, on February 11, Unichain—a layer-2 rollup built on the OP Stack—went live, becoming the first blockchain designed primarily around V4-style liquidity. To cap off the month, the Uniswap Foundation (”UF”) introduced a pivotal pair of funding proposals under a shared banner: Uniswap Unleashed.
The first proposal seeks approximately $120.5 million in UNI tokens from the Uniswap DAO to fund the UF’s ongoing work. This would be the first major funding allocation since the UF’s creation two and a half years ago and is designed to sustain grant programs through the end of 2026. The proposal includes a $38.6 million operations budget (incorporating some existing funding) alongside a projected $99.4 million for grants over the same period, covering both new and existing commitments.
While this proposal builds on the UF’s existing initiatives, the second proposal is a bold new step. It outlines a $45 million incentive program, distributing UNI token rewards across Unichain and Uniswap V4 over six months. The budget is split between $21 million for Unichain—aimed at boosting total value locked and swap volume—and $24 million for Uniswap V4 outside of Unichain, ensuring distinct allocations for each. If approved, this initiative would rank among the largest incentive programs in DeFi history.
Though both proposals have successfully cleared their initial DAO temperature checks, they have sparked debate. Critics have questioned the UF’s transparency, fund allocation, and the projected return on investment for the DAO. Such scrutiny is essential for proposals of this scale, and it has ultimately fostered a more robust dialogue, helping to refine consensus around the plans. Karpatkey has expressed support for both the UF’s funding and the incentives program, and looks forward to supporting Uniswap’s continued growth and innovation.
🦄 Read more: Foundation Proposal | Liquidity Incentives Proposal
Balancer x CoWSwap: Token Swap
At the start of last month, Balancer DAO and CoW DAO took another step toward deeper strategic alignment, as both DAOs approved a new token swap deal through their respective governance processes.
This builds on their initial strategic partnership, announced in May 2024, which introduced CoWAMMs (”coincidence of wants automated market makers”). The collaboration combines CoW’s decentralised trade-matching mechanism with Balancer’s advanced price discovery algorithms to pioneer a new era of exchange technology.
With this latest agreement, the DAOs hint at the “next stage” of CoWAMMs and a broader alignment in future development. As part of the deal, they will exchange approximately $500,000 worth of BAL and COW tokens, each holding the other’s tokens for a minimum of two years. Governance participation rights, as established in their previous arrangement, will continue.
We love nothing more than seeing two powerhouse DeFi DAOs—both key members of our Treasury Network—teaming up to create innovative solutions. We can’t wait to see the impact of their collaboration in the coming months.
Gnosis: Delegate Program
GnosisDAO is entering a pivotal new phase in its governance as the long-anticipated Delegate Program, proposed by StableLab and karpatkey, is finally set to take effect. GIP-101 was first introduced in May 2024 and formally passed in June. However, implementation was delayed due to technical issues with the DAO’s Snapshot space, which prevented multi-choice voting. Now, with the approval of key treasury operations under GIP-116, a dedicated Snapshot space has been established to facilitate Delegate Program votes.
This marks a significant shift in the DAO’s governance landscape, especially as participation has declined while voter influence has become increasingly concentrated. The program will distribute 5,000 GNO of voting power among 10 delegates, aiming to increase active voter participation by 35-50%, based on recent turnout. While this change is expected to improve quorum attainment and broaden the range of voter representation, it may also intensify scrutiny and competition, making it harder for contentious proposals to pass.
As the governance of GnosisDAO hangs in the balance, we can look forward to following the new delegates as they begin their work.
💬 Catch up with the discussion
dYdX: Operational Optimisation
Throughout February, dYdX DAO continued to advance several critical initiatives as it refines and expands its operational functions. Key highlights include:
Stride Recall - two proposal (here and here) received formal approval through the DAO’s governance process. Together, these measures empower the dYdX Treasury SubDAO to take control of the staked DYDX held in the dYdX Community Treasury. This initiative aims to optimise staking costs and consolidate two parallel staking programs into a single, unified framework.
Operation Mandate - the dYdX Operations SubDAO sought further funding of $11.65 million for its third operating mandate. This new phase focuses on enhancing the reliability and resilience of the dYdX Chain’s infrastructure and various dYdX frontends. The funding would enable the SubDAO to permanently expand its technical team to support these efforts.
Buy & Stake Program - the dYdX Treasury SubDAO, in collaboration with karpatkey, introduced a DYDX Buy & Stake Program for community discussion. This proposal seeks to allocate a portion of protocol revenues to systematically repurchase DYDX. If implemented, it could significantly reshape the token’s value proposition and influence the long-term trajectory of the DAO’s activities.
Aave: Accelerating Activations
Aave’s deployment momentum continues to accelerate, with proposals this month for expansion to four new blockchains: Sonic, Ink, Soneium, and megaETH. While only Sonic has received final approval so far, the increasing frequency of temp checks—and their subsequent DAO approvals—signals a clear uptick in Aave’s expansion efforts.
These four proposals follow five other deployments over the past three months: Rootstock, Mantle, BOB, Linea, and Spiderchain. Notably, no new deployment proposals have been outright rejected in this period, though several have stalled after the Temp Check stage. Despite this, the DAO’s appetite for expansion remains strong.
✅ Keep up with the latest Aave proposals
At a Glance: The DeFi Treasury Network
Check out the latest metrics showcasing karpatkey’s impact across our network of partner DAOs.
The Next Chapter
This month, we’re excited to share the first-ever update on our own DAO!
From our first service provider proposal in November 2021, we’ve envisioned karpatkey as a DAO in its own right, making decentralization central to our roadmap. While the journey has taken time, February marked a decisive step forward.
GIP-121 sought GnosisDAO’s approval for karpatkey’s token launch and the allocation of 7.5% of its supply to GnosisDAO. This includes Gnosis’ initial 2.5% investment from 2021 and an additional 5% airdrop in recognition of its ongoing support. After extensive discussions from Gnosis’ community and founders, the proposal passed with an overwhelming 99.7% approval on 28 February.
With Gnosis’ backing, karpatkey is ready to turn the page and enter a new chapter. We look forward to sharing more updates on our governance journey in future newsletter editions.
With that exciting news, we bring February’s edition to a close. But, as the pace of new developments continues to pick up, the March edition is shaping up to a busy one! As ever, you can subscribe to stay connected with us, and follow along with our journeys on X and LinkedIn.
Or, if you’re too enthralled by these updates to wait for the next one, you could consider trying your hand as a karpatkey contributor 👀. Sound interesting? Take a look at our open positions, or reach out to us on social media to find out more!
Thanks for reading 🙏