Background
On the 10th of November 2022, “vlAURA” token holders voted for the implementation of a new voting system that could allow Aura to use the entire veBAL stack invested in their Protocol for Balancer Governance voting with a “winner takes all” approach. You can read about it here. Voting results can be found here.
On date 14th of November 2022, shortly after the vote was closed, @Smallcapscience and @Tritium presented a proposal on the Balancer forum to “stop counting vlAURA as part of Balancer governance. Otherwise, Aura votes will be counted twice. Once if/when users vote of Balancer Snapshots, and once when the Aura multisig votes with all of veBAL.”
The Balancer voting result of their proposal however could be read as a rejection by the Balancer Governance of the new voting principle proposed by Aura. It could also be argued that such decision can be attributed to the fact that the Balancer Community does not approve a proposal that favours voting centralization of such a large Protocol which aims at having a controlling stake in Balancer Governance, but instead could prefer a voting system which promotes a more decentralised approach. An approach that leaves space for all the different stakeholders of the Aura and Balancer ecosystem (including, but not limited to, BadgerDAO; GnosisDAO and other small investors like myself) to not only express their voting intentions, but to also have full control of their rationale, which could or could not be aligned with a supposed majority within Aura.
The 51% attack concern
Referring to AIP-17, another critical point of the proposal which should have needed a much deeper discussion, was the possibility of 51% attacks. What has never been considered is that such attacks can be perpetrated by internal actors and not necessarily from the outside. At the time of writing, only a handful of wallets would be able to reach the majority. This risk is especially relevant when @smallcapscience itself states that “For obvious reasons, Balancer holders and Aura Holders are largely the same groups” and that: “Using 100% of AURA’s underlying veBAL to vote through snapshots further decentralises both protocols” (ed: Balancer and Aura). Unless we are all living in an Orwellian novel, there are clear elements that suggest a quest for a centralization of powers in order to then be able to take advantage of directly competing factions through misleading and tendentious statements.
On Aura predominant position
It is evident that Aura has enjoyed strong tailwinds over a somewhat extended period of time: from sustained Balancer awareness campaigns through the main Balancer Twitter account, to a 300,000USD grant, an official “Supported by Balancer’’ acknowledgement on their main landing page, and of course an uncapped gauge since launch. It could be argued that the combinations of all those factors favoured Aura in reaching a predominant position within the Balancer ecosphere.
Aura has now probably reached a mature status, capturing a substantial veBAL TVL and Balancer should applaud their astonishing results.
Taking a disproportionate advantage of such a position however could be seen as unfair when operating within an ecosystem that now hosts multiple counterparties.
veBAL tokenised wrappers Governance floor
To avoid the risk of a centralization of Governance powers as detailed above (a.k.a. winner takes all’’ or “WTA” policies), I propose that any Protocol that hosts/controls veBAL wrappers (auraBAL; tetuBAL; sdBAL) should be allowed to implement WTA policies only up to a certain % of their veBAL market share.
To make this point clearer, the pre AIP-17 model adopted by Aura (leaving vlAURA holders the option to opt in or out Aura delegation) should be seen as the gold standard to be adopted by all Protocols that host veBAL tokenised wrappers, above an agreed floor, as the representation shown below (For reference only).
To this end, I propose voting on how high or low this floor should be set at, and I’m open to adding to the proposed values to better reflect Community sentiment.
Proposed multiple choice % values should be set at the following levels:
- 15%
- 20%
- 25%
Above this new agreed floor, a “winner takes all approach” should be prohibited.
Specifications
The Balancer Governance is requested to express their voting preference on the initiative expressed above by providing one preference among the different options which would serve as a WTA floor.
- 15%
- 20%
- 25%
- Reject
