kpk governance newsletter: April 2025
Your essential guide to DAO governance proposals, initiatives and innovation
Hello, community!
Welcome back. Sometimes, it takes a bit of chaos and uncertainty to sharpen the mind and concentrate a vision. Though disruption and doubt may be uncomfortable, there’s always a silver lining. And nowhere is this truer than in the colourful world of DAO governance.
This month, we dive into a sharp change of direction, some contentious quandaries of corruption and another significant change for our own DAO. There’s a lot to get through, so without further ado:
Let’s get going! 🏃♀️💨
Headline: Vision For The Future
Recently, the ArbitrumDAO celebrated the two-year anniversary of its launch and airdrop. In that time, the DAO has embarked on dozens of ambitious experiments, using its vast treasury of ARB tokens to accelerate ecosystem adoption. But while activity on Arbitrum One remains strong, many of these experiments have missed the mark, resulting in slow execution, delivery inefficiencies, overlapping responsibilities and weak accountability.
So, after a process of reflection and consultation, the Arbitrum Foundation has shared a bold vision for the future of the DAO. That vision centres around an ecosystem of “Arbitrum Aligned Entities” (AAEs) — miniature organisations designed to streamline operations, reduce the burden on delegates, and take a proactive lead on specific areas.
The plans propose to shift authority away from the current fragmented selection of contributors towards a limited set of AAEs operating with long-term mandates. The range of entities would include the Arbitrum Operating Company (OpCo), Entropy Advisors and the Foundation. Each AAE would operate with a clear mandate and a shared primary objective of achieving success for Arbitrum. All AAEs would answer to delegates through the governance process, and be tasked with implementing the will of the DAO.
At the centre of the proposal is the Arbitrum OpCo, and its supervision by the DAO’s Oversight and Transparency (OAT) committee. OpCo would serve as a DAO-native project manager, guiding proposal lifecycles, ensuring deliverables and, where necessary, halting failed initiatives. The idea is to allow expert teams to handle their own strategy and operations. Ultimately, the Foundation aims to achieve better cost control, leaner execution, and clearer accountability.
The Foundation’s plans appear to adopt the recent trend of using sub-organisations to bridge the gap between DAO governance and effective implementation. We’ve written previously about the dYdX treasury sub-DAO and Lido’s network of BORGs. Arbitrum’s AAEs may just be the next exciting acronym to drive forward the development of DAOs.
This new framework is a clear attempt from the Arbitrum Foundation to help the DAO learn from its mistakes and reorient around a clearer plan and a stronger backbone of core functions. Though the Foundation notes that the door is not closed to external contributions, it’s clear that it’s proposing to end the status quo, and open a new chapter in ArbitrumDAO’s history. kpk is broadly supportive of its vision.
Key Topics & Proposals
Arbitrum: Vote Buying Services
And that’s not all from Arbitrum! In recent months, the DAO has been at the centre of a controversy over vote-buying services like LobbyFi. In early April, the Arbitrum Foundation raised a new DAO discussion on the topic, to gauge whether action should be taken.
These platforms allow DAO participants or external parties to canvass for additional votes by paying rewards into the service. Rewards are then automatically divided among tokenholders who delegate their votes to LobbyFi, allowing those tokenholders to earn additional yield. The controversy is that this overt corruption risks perverting the DAO’s operations, enabling protective roles and functions for the DAO to be purchased and exploited.
The most famous example of vote-buying to date has been Arbitrum’s elections for the Oversight & Transparency Committee of its new operating company. On 2nd April, hitmonlee.eth spent 5 ETH to back a single candidate. LobbyFi’s entire delegated voting power of 19.3M ARB was directed to the candidate.
The debate attracted a wide array of different views, from outrage at outright corruption, through to clear normalisation of financialised governance. We at kpk shared our own view that vote-buying services do present a threat, but that the way forward is to improve delegation rather than cracking down on existing financialisation. For now, the debate rages on…
Aave: Umbrella Activation
Throughout April, the Aave DAO has been exploring an “Aave Umbrella” system, which provides significant upgrades to Aave’s risk management framework.
Unlike Aave’s previous Safety Module, which relied on staking AAVE or LP tokens, Umbrella allows users to stake aTokens (such as aUSDC or aUSDT) directly. This design enables automatic slashing of staked assets to cover bad debt, eliminating the need for governance intervention and enhancing capital efficiency. 
The system features a dynamic rewards mechanism, controlled by an onchain Emission Curve. The Curve adjusts incentives based on the total amount staked relative to predefined targets, aiming to optimise liquidity provisioning while maintaining sustainable reward distributions. An Umbrella interface has also been developed, which facilitates user interactions for staking, “cooldown” activation and reward claims. 
Having already passed through a series of security audits and formal verification testing to ensure the system’s robustness, Umbrella is now ready to be brought through DAO governance. The proposal’s author, BGD Labs, proposes to activate Umbrella across multiple networks, starting with Ethereum, Arbitrum, Avalanche, and Base.
As Aave continues to lead the DeFi industry, Umbrella represents a big step forward towards easy and efficient contribution to Aave’s risk management systems.
Balancer: V3 Rollout
Balancer DAO has been on something of a charge recently, rapidly moving through numerous proposals to support the rollout of the Balancer V3 protocol.
The new V3 product launched in December 2024, building on Balancer’s existing formulas by adding custom pools, a framework for hooks and a new modular design, as well as various gas and performance efficiencies. The design was promptly rolled out to Ethereum Mainnet and Gnosis Chain, marking the beginning of a new era for Balancer liquidity.
But the DAO hasn’t stopped there. In 2025, proposals have already been progressed or completed in respect of Arbitrum, Avalanche, Base, and OP Mainnet. The contributor team has also been proactive in seeking support from these new networks to bootstrap liquidity. On Avalanche C-Chain, Balancer has promptly enabled reward gauges, working closely with Ava Labs and the Avalanche Foundation team to fully integrate the new protocol and launch rewards.
As the total value locked in V3 contracts skyrocketed by 25% in April, it’s clear the new design is delivering significant impact. However, despite the rapid rollout across the initial EVM chains, there’s still plenty of runway ahead as V3 seeks to surpass existing V2 deployments and expand into more corners of the EVM ecosystem. We’ll be following along eagerly!
Lido: Delegate Incentivisation Extension
This month, Lido DAO’s Delegate Oversight Committee proposed a $225,000 extension of its existing Delegate Incentivization Programme (DIP) for Q2–Q4 2025.
The programme is designed to reward high-performing public delegates for helping to drive protocol governance through consistent voting, forum engagement and rationale-backed decision-making. Delegates who meet the updated eligibility threshold of 1M LDO can receive up to $15,000 in LDO per quarter. Their funding is based on a set of merit-driven criteria, including ≥70% voting participation, clear proposal rationale and compliance with anti-sybil rules.
The programme also shifts to calendar-quarter evaluations and maintains oversight through a rotating committee of Lido contributors. Funds will be distributed quarterly using Lido’s “Easy Track” governance motions, providing quick and meaningful rewards to participants. Overall, the initiative supports dozens of active participants, representing over 25M of delegated LDO. It aims to reinforce Lido’s stable, long-term-aligned delegate base and improve transparency and accountability in the DAO’s governance.
In building such a robust and well-funded delegation programme, Lido is providing meaningful leadership to other DAOs. Last month, we highlighted similar efforts in Uniswap’s delegate programme update, which also shows how different DAOs are rapidly improving the structure and professionalism of their delegation frameworks. Lido is already some way ahead on this curve, with novel key indicators and performance-based rewards. Each of these small details in their programme helps to ensure meaningful value for the DAO.
As Lido DAO continues to lead by example in this area, we look forward to seeing how others will iterate on the novelties of Lido’s formula as decentralised delegation continues to mature.
Uniswap: Incentives Unleashed
In February, we reported on the Uniswap Foundation’s plans to launch two mammoth incentive programmes to accelerate the adoption of Uniswap V4 and Unichain. The total package amounted to a whopping $45 million of UNI incentives to be distributed over the next 6 months.
After the proposal passed in March, incentives were finally unleashed on 15 April 2025. As may be expected for a programme of this size, the market response was completely euphoric. Unichain shot up from less than $10 million of value locked to over $530 million by the end of April. And that’s with over 5 months of incentives still remaining.
Time will tell whether the programmes succeed in creating sustained engagement for Unichain and lasting liquidity on Uniswap V4. But in any event, the incentives are sure to continue attracting masses of attention for months to come.
Gnosis: Acquisition of HQ.xyz
In December, the founders of HQ.xyz (previously Headquarters) released GIP-120, a proposal for GnosisDAO to acquire the project as a means of accelerating the Gnosis 3.0 vision. The initial proposal involved deferred consideration over several years, aimed at retaining the existing team and ensuring a smooth integration within the wider Gnosis ecosystem.
The proposal would prove that decentralised governance is very much alive and well at GnosisDAO, as dozens of delegates and tokenholders weighed in to express opinion on the deal’s terms. Strong criticisms were levied about the initial valuation of the deal and the strategic rationale, prompting Gnosis’ founding team to weigh in with expressions of support. Ultimately, the core teams from HQ and Gnosis sat down to agree a revised deal that would address the concerns raised.
After working closely with delegates to scrutinise the revised deal, the new proposal was taken to Snapshot and passed with a significant majority of 99.95%. The strategic rationale for the deal presents a window into the thinking of the Gnosis core team: extending their full-stack decentralisation into corporate applications built on Safe smart wallets and Gnosis Pay banking accounts; acquiring regulatory licences in new jurisdictions; and seeking a distinctive foothold for Gnosis in Asian markets.
After several months of preparing for completion, the acquisition deal has now finally been executed. We’re pleased to welcome the team at HQ.xyz to the Gnosis family, and to see how these ambitious integration plans will shape up in the coming months.
Optimism: Hello World!
We’re also pleased to announce that kpk has launched a delegate platform for the Optimism Collective!
Having followed and engaged with the Optimism ecosystem for several years now, we’re excited to build out a channel for direct interaction and participation in the DAO’s governance. We hope that our wealth of experience contributing to other chain-operating DAOs like Gnosis, Arbitrum and Uniswap will bring value to the Optimism community.
🔴 Discuss And Delegate: Platform | Tally | Agora
At a Glance: The DeFi Treasury Network
Check out the latest metrics showcasing kpk’s impact across our network of partner DAOs.
KPK: Coin The Term
This month, we’re excited to share our next big update from the kpk DAO. Following last month’s surprise announcement of our rebrand, we’re now delivering on a long-anticipated development: the launch of our KPK token!
The token will empower the kpk DAO to make decisions on allocating and approving operational budgets, defining investment policies and parameters for the treasury, and selecting and approving large-scale transactions. In doing so, it signals the kick-off of our public governance and creates an opportunity to establish deeper alignment among our stakeholders.
The KPK token will have a total supply of 1 billion tokens at launch, of which 46.3% has already been distributed. These tokens will have limited transferability for the foreseeable future, meaning transfers must be approved by the DAO foundation in order to be actioned. The option to fully unlock transferability — also known as a “token transferability event” — remains open to future DAO decision-making.
With the token in place, the kpk DAO is now ready to enter its next phase of public decentralised governance. Look no further for ongoing updates on the progress of our DAO.
👀 Read the Release: Blog | Press Coverage
And that’s a wrap!
Thank you for taking the time to catch up on DAO governance with us. As the pace of development across our industry continues to increase, we know it’s becoming challenging to stay informed. We hope our newsletter provides a small helping hand as we all work to narrow the learning curve!
Ever thought about taking things a step further? We’re always on the lookout for more DeFi directors and governance gurus, and would love to hear from you! Check out our current list of open positions, or get in touch through social media to learn more.
Until next month 👋