kpk governance newsletter: March 2025
Your essential guide to DAO governance proposals, initiatives and innovation
Hello, community!
Great progress is achieved not just by impulse, but through a series of deliberate steps.
Last month was a clear test of our steady march. As trade tectonics shifted beneath global markets and political turmoil sent shrapnel across industries of every kind, those of us working on sustainable, decentralised public goods kept ours heads-down—focused on building for a better future.
Amidst the turbulence, March delivered. We saw fresh incentive alignments from major DAOs, bold new legal architecture, and renewed support for delegated decision-making. That’s a lot to unpack… so without further ado:
Lights, Camera, Action! 🎬
Headline: Support, Secure, Sustain…
Engineering an enduring ecosystem is no easy endeavor. For many DAOs, each day brings a new balancing act between operating efficient liquidity, maintaining secure infrastructure and stewarding support and alignment across the community. In our view, the secret sauce for sustainability is secure structures and stakeholder synergies.
Over the last 6 months, the dYdX DAO has been on a journey of ecosystem strengthening, interest alignment and value accrual for the DYDX token. In October, the DAO formed a Treasury SubDAO tasked with generating incremental value through active treasury management. In November, a new Staking Program was launched to reinvest the DAO’s assets into dYdX Chain validators. Now—in March—the DAO has taken another step, with the introduction of a Buyback and Stake Program.
On its face, the new mechanism is simple. 25% of dYdX’s net protocol revenue will be used to repurchase DYDX tokens for the Treasury SubDAO, and then stake them with its network of validators. Why? More guaranteed and diversified stake ⇒ stronger security. More distribution from protocol revenues ⇒ more value accrual to stakeholders. And more token repurchases ⇒ more buy pressure in the market.
Each step of the process aims to drive activity to the chain, and deliver more value to its core stakeholder groups. And together, this series of initiatives begins to resemble a flywheel; where strong staking incentives drive greater participation, which encourages more volume and fee generation on the chain, which leads to even more staking, and on.
But at its core, the salient point for DAOs like dYdX isn’t simply driving up activity or prices. It’s about building the ecosystem’s core. dYdX chain is bolstered by a strong network of reputed and active validators. They all hold the governance token, participate in proposals, and benefit from its value accrual. And in turn, tokenholders are motivated to support validators to strengthen the chain. The stronger the alignment between stakeholders, the stronger the pull towards dYdX.
Secure structures. Stakeholder synergies. Sustainable stewardship. It’s as easy as that.
Key Topics & Proposals
Balancer: Alliance Program
Balancer DAO has introduced plans for a new Alliance Program, which aims to use protocol fee-sharing arrangements to sustain long-term alignment between partners and the protocol’s veBAL tokenomics.
Eligible partner protocols like Aave, Lido and Rocketpool could receive a fee share from designated pools of up to 17.5%. The fees would be paid to the partner in USDC, on strict condition that the partner (i) uses them to purchase 8020 BPT tokens to lock into veBAL, and (ii) commit to incentivising these pools and locking their veBAL positions. The aim is to create a virtuous cycle of incentives between Balancer and its most valuable partnerships and integrations.
The proposal calls for a gradual rollout, starting with Balancer V2 before later extending to V3. Various automations would be set up and managed by Balancer Maxis to facilitate the program’s delivery. Two tiers of partners (E1 and E2) would be recognised based on historical fee generation, with only specific pools qualifying for fee sharing based on criteria like TVL thresholds and bribing activities. Misaligned activities—like failing to relock veBAL or underdelivering on promised incentives—could trigger automatic removal without governance process.
Balancer has long been recognised for its powerful governance and incentives flywheel—one that fuels partner engagement and drives lasting value across the ecosystem. The proposed Alliance Program looks to double down on this proven formula, creating fresh demand for BAL while rewarding both tokenholders and aligned partners for their ongoing contributions. If successful, it may be a strategic means of deepening Balancer’s moat. Time will tell…
Uniswap DAO: Governance Grows Up
March marked a significant milestone in the Uniswap DAO’s evolving governance, with the community aligning around two key initiatives aimed at increasing participation and ensuring long-term sustainability.
Treasury Delegation Round 2 received preliminary DAO approval on Snapshot with a 60% approval rating. The program is expected to allocate ~18 million UNI (~$113 million) to selected delegates and signals alignment around strengthening Uniswap’s governance structure. Several updates will be made to define “tiers” of delegates, provide more comprehensive participation criteria and implement delegate expiration mechanism. 12 delegates will be selected each receiving 1.5-2.5M UNI depending on their tier.
In parallel, the DAO is preparing to launch Cycle 3 of the Uniswap Delegate Reward Initiative, backed by a $540,000 budget. This 6-month program will support 15 high-performing delegates, each eligible to earn up to $6,000 per month in UNI based on: vote and call participation rates, rationale submissions and proposal authorship. Cycle 3 introduces refinements that place greater emphasis on measurable, impactful governance activity—especially onchain voting.
Together, this pair of delegation initiatives demonstrate the maturing model of governance at Uniswap DAO—one that is increasingly performance-driven, transparent, and structured for the long term.
🦄 Read the proposals: Treasury Delegation Round 2 | Delegate Reward Initiative
Aave: Gnosis GHO
Back in January, we ran a feature on the progress of Aave’s GHO stablecoin. March saw two more significant steps forward in plans to rollout the deployment of GHO on Gnosis Chain.
First, an ARFC for the Gnosis deployment has now passed, signalling that the community is fully behind the deployment plan. The proposal sets out the specific details of the deployment, including an initial supply cap of $2.5 million and a borrow cap of $2.25 million. The integration will use Chainlink CCIP to bridge GHO, with an initial volume capacity of $15 million.
Second, the proposed designs for a yield-bearing, crosschain deployment of GHO (”sGHO”) were released for review. This stimulated discussion and feedback among a range of core contributor groups, helping to accelerate progress towards a final design. A proposal for the necessary upgrades is already working its way through Aave DAO’s governance structures. Once complete, the new sGHO design will need to undergo auditing, risk analysis and further governance proposals before going live.
From a user perspective, the real alpha lies in what’s coming next. Gnosis Chain is set to gain a powerful new asset: a yield-bearing stablecoin that earns sustainable interest from one of DeFi’s largest ecosystems. And that’s just the beginning. With deployment approved, the DAO has also greenlit a substantial incentive war chest to drive integrations and adoption. There are plenty of reasons to keep a close eye on this one.
👀 Check out the details: GHO Deployment | sGHO Designs | sGHO ARFC
CoW: Legal Structure
Last month, CoW DAO approved the incorporation of a new four-entity legal structure designed to mitigate legal, regulatory, and operational risks, while maintaining the CoW’s decentralised governance. The framework includes a Cayman Islands Foundation and three BVI entities—CoW Core, CoW Hosting, and CoW Business—each tasked with specific mandates and equipped with their own budgets. The DAO will retain full authority over all strategic decisions, and may amend, reassign or wind down the new entities through its ordinary governance.
Each entity plays a distinct role: the CoW Foundation will serve as the primary legal interface, coordinator of mandates, and custodian of the DAO’s treasury and intellectual property rights; CoW Core will manage operations for protocol functions and solver operations; CoW Hosting will maintain the DAO’s primary user infrastructure; and CoW Business will handle all commercial relationships, partnerships, operational expenditure and financial initiatives like token buybacks. The DAO’s core governance mechanisms will remain unchanged, with DAO-appointed directors and committees ensuring that the new entities stay aligned with the CoW-mmunity’s interests.
2024 was a year of dramatic successes for CoW DAO, as its tooling became the preferred method of onchain exchange for everyone from DeFi legends to presidential candidates. This proposal marks a step forwards in CoW’s ability to interface with the real world, preparing it for success amidst the next wave of adoption.
Lido: Here Come The BORGs
In January, we wrote about how Lido DAO is using innovative legal structures called “cybernetic organizations” (or BORGs), to act on its behalf in a legal context without surrendering the DAO’s self-sovereignty. In March, the DAO doubled down on this strategy, introducing another proposal for a new Ecosystem BORG.
The Ecosystem BORG is designed to accelerate the growth and adoption of stETH by expanding integrations, improving liquidity, and boosting institutional and retail engagement. It aims to deepen stETH’s use in DeFi protocols, enhance technical support and documentation, generate institutional partnerships with custodians and regulated platforms, and increasing brand awareness through education, marketing, and events. The initiative aims to evaluate performance against a range of KPIs, including Lido’s market share, volume and community engagement.
The DAO passed this proposal on 21 March with a >99% majority, executing the payload to set up the Ecosystem BORG together with the Labs BORG proposed in January. The pair will now join the Alliance Program BORG, as Lido’s burgeoning fleet of cybernetic real-world entities continues to grow.
As BORG adoption accelerates, Lido is setting the standard for how DAOs can leverage special-purpose subsidiary entities to act on their behalf. This marks a clear shift in the broader narrative away from “legal wrappers”, which dominated early debate around DAO-legal entity interfaces.
🏢 Meet the BORGs: Ecosystem BORG | Labs BORG | Alliance BORG | Governance Vote
At a Glance: The DeFi Treasury Network
Check out the latest metrics showcasing karpatkey’s impact across our network of partner DAOs.
Brand New Us
In case you didn’t see the news, karpatkey is now kpk!
On 18 March, we formally closed the chapter on our founding brand. The karpatkey name has been with us from the start, and still resonates deeply with our team. However, as we prepare for a 2025 full of significant steps forward, the time was right to evolve our brand.
kpk is a simplified iteration of the existing letters and tones of our brand. It includes a new brand identity, logo and design elements, which take both inspiration from our history and bold steps into our future. And with that change, we have also taken the opportunity to relaunch our website to mirror the exciting new brand.
On behalf of kpk, we wanted to thank all of our partners, contributors and investors who helped to make the rebrand a success! To find our more, check out our rebrand article and new website at the links below.
We’d also love to hear your feedback, so have added a poll for your thoughts below.
And with that, we bring this March edition to a close.
Now six months in, we’ve been genuinely heartened by the growth in our readership and the thoughtful engagement we’ve seen across social media. It’s been a pleasure to welcome back so many of you month after month, and we remain committed to delivering concise, insightful updates to help you stay informed and ahead of the curve.
If our newsletter has sparked your interest, perhaps you’d be a great fit to help kpk to scale DeFi. We’re always on the lookout for talented new contributors, so if that sounds like you, we’d encourage you to explore our open roles, and connect with us on socials to hear more.
Thank you once again for reading 👋