DOT’s OpenGov? (July 14th to July 20th)

What is up, my friends!

The news of the attempted assassination on Trump dominated much of the week’s headlines, its significance being the strong sentiment that he now holds an unstoppable fate to become the next elected President of the United States.

Crypto Twitter and markets were quick to react to this as Bitcoin reversed from the recent slump. Ultimately, it comes down to Trump’s welcoming stance on crypto.

While the future governing body of the land of the free is potentially on course to embrace Web3, Polkadot, the largest DAO in Web3, celebrates the milestone of reaching its 1000th OpenGov referendum.

To celebrate this momentous occasion, we will take inspiration from The Kusamarian and present a double feature about governance for this week’s top story. Our aim is to provide an insightful overview of OpenGov, as well as developments in governance adoption across Polkadot parachains.

Similarly to the power of decentralized governance, the power of memes can have a profound impact on communities. WagMedia’s 31st bounty from the Bounty Hub, to be posted in the meme channel, focuses on producing a creative logline relating to Polkadot, chickens, and OriginTrail.

It’s certainly a quick way of getting involved in WagMedia and potentially opens up your mind to content creation, so keep your eyes peeled for the next one by following us on our socials.

As mentioned last week we are currently welcoming feedback as we begin to prepare for funding via OpenGov to continue the WagMedia mission.

Now, on to our double feature and a roundup of all the news updates from our Finders Program.

Dodow, Chief Editor

Top Story of the Week Part 1 - Wag is OpenGov

Written by yay.oi

This week we’re celebrating a landmark achievement of 1000 referenda on Polkadot OpenGov. To commemorate the event, Distractive have proposed Wish for Change Referendum #1000, honoring the continued endurance of Polkadot’s core strengths: true decentralization, a pioneering spirit of continuous innovation, and a thriving community of developers, projects, and users, embodied in an on-chain remark, “Polkadot 4lyfe”.

True decentralization is reliant on effective governance, which ensures that the power to effect change in the ecosystem is granted to the stakeholders rather than any central authority. This approach fosters transparency and trust within the community and can ensure that a protocol can adapt and evolve according to both the needs of its users and the evolving technological landscape.

Protocols such as Bitcoin and Ethereum conduct their governance off-chain, meaning that critical decisions are made through informal means such as online forums and developer meetings. This approach can lead to struggles in adaptability, with resistance coming from various factions in the community, and also lacks mechanisms for enforcement.

Polkadot, however, avoids these issues by conducting governance on-chain, meaning that decisions are effected directly and immutably upon approval. That said, governance in the Polkadot ecosystem has not been a smooth ride by any means, but the mechanisms are in place to allow it to adapt and evolve over time.

The initial model of governance, first on Kusama, and later on Polkadot, is now referred to as Gov1. It was a tricameral model consisting of the Referendum chamber (the Public), an elected group of Council members, and the Technical Committee.

At that time, only one referendum was considered at a time, and treasury spending decisions were made by the Council. While the Council could have been regarded as effective guardians of the treasury, they could also have been seen as a centralized entity. That said, on-chain voting by token holders with conviction weighting, like in OpenGov, was already possible and was enacted when various thresholds were breached.

For instance, WagMedia’s original funding top-up (Bounty 12 top-up) was subject to what was called a “democracy referenda” when a simple majority was required. Looking back, typical “democracy referenda” consisted of many technical items such as runtime upgrades, HMRP channel openings, unbricking of parachains, lease swaps, etc.

The second iteration of Polkadot governance, OpenGov, aimed to enhance decentralization and increase individual representation and participation. With the removal of the Council, OpenGov passed the responsibility for treasury spending to the Public for the first time.

Furthermore, it opened up the possibility for multiple proposals, in over 16 different voting tracks, to be considered at once. Each track has parameters that determine, among other things, the duration and number of simultaneous referenda.

For example, there are 6 tracks for treasury spending proposals. The track for Small Tipper (spends of up to 250 DOT) has a very low privilege level, so the duration is only 7 days, and up to 200 referenda can occur simultaneously. The Treasurer track (spends of up to 10M DOT), however, has a much higher privilege level, so only 10 simultaneous referenda can occur with 28-day durations.

There are various higher privilege administrative tracks for management tasks related to parachain slot leases, staking, auctions, the registrar, and HRMP channels. In addition, there is also the Fellowship Admin track to manage membership of the Technical Fellowship, which replaced the Technical Committee of Gov1.

Topping the hierarchy are the Root, Whitelisted Caller, and Wish for Change tracks. The Root track has the highest level of privilege and therefore the strictest parameters. The Whitelisted Caller track can be used by the Technical Fellowship to initiate a root level referendum with less strict parameters. Finally, the newest track is Wish for Change which is used to signal consensus for a change to the network without committing it to code.

OpenGov launched on Kusama on in Nov 2022 with Referendum #0 proposing to make the onchain remark “expect chaos” (Fun fact: that was my first ever reward received from the WagMedia Finders Program. Thanks for the 0.05 KSM Dodow!). While the community did not agree with the sentiment and rejected the proposal, Kusama lived up to its nature and chaos ensued.

Conviction weighting is a key element with OpenGov, signifying “skin in the game”. It allows voters to amplify their votes by up to six times by locking their tokens for an extended time period. While this mechanism aimed to empower smaller token holders, it was not enough to counteract a whale with a lot of conviction.

People began to notice a wallet starting with the letters HACN, that controlled a maximum conviction vote of 297K KSM, had been consistently voting down spending proposals, often at odds with community consensus. Adding to the frustration HACN never left any feedback, leaving proposers scratching their heads as to what they’d done wrong.

Finally, HACN began communicating through on-chain remarks on OpenGov proposals, presumably to preserve their anonymity. They announced themself as an activist stakeholder, and that they had a policy of retroactive funding, especially for content, open-source software, and tooling.

In another part of their message, they also mentioned that AAG is improving. Perhaps they had just finished watching the Kusamarian’s Attempts at Governance #31 and were pleased with the discourse it promoted around Dotsama governance.

Whether or not AAG’s continued improvement is what led to HACNA’s activism eventually coming to an end we’ll never know. However, it is hard to dispute that AAG has today solidified its position as an indispensable institution for fostering impartial discourse on Dotsama governance.

Polkadot OpenGov too has had its fair share of controversial voting activity from a large stakeholder, but unlike HACNA this whale had a preference for treasury spending. Around August 2023, people started noticing some very large AYE votes coming from a wallet starting with 16DG.

With a clear preference for content creation and marketing spends, it became clear that 16DG had ambitions to improve Polkadot’s visibility. It was none other than Giotto, who is still an influential voter in Polkadot OpenGov to this day.

One of the biggest controversies on Polkadot OpenGov coincided with the launch of the W3 Foundation’s Decentralized Voices (DV) program. DV aimed to create a more equal distribution of voting power by delegating 42M DOT of voting power to passionate and intelligent participants in governance.

The resulting shift in the OpenGov landscape stopped one of Giotto’s passion projects DED in its tracks. With ambitions to create a Polkadot community funded meme coin to rival the likes of BONK and SHIB, Giotto and his team had been looking to spend big on marketing.

With the arrival of DV as well as members of the community beginning to grow weary of the time and expense of the project, DED funding proposals #548 and #556 were strongly rejected. In response the DED project altered its tokenomics from a 100% community airdrop to 5% in order to seek private investment. For some, Giotto went from hero to zero, and you can still see them moaning about it on Twitter to this day.

Controversies aside, in 1000 referenda a lot has been achieved by Polkadot OpenGov. On this special occasion let’s take a moment to pay tribute to some of the highlights.

Polkadot OpenGov celebrated its launch with a spectacular failure. In Referendum #0 Novasama’s Valentin Sergeev attempted to make the on-chain remark Hello World, but messed up the pre-image hash. Redemption was found in Referendum #8 when Novasama were successfully granted continued funding for NovaWallet.

Referendum #85 successfully requested almost 60K DOT for “at least” 42 weeks of Kusamarian branded Dotsama content. With a minimum of 8 high quality audiovisual productions a week including the HACN-slaying AAG, that’s exceptional value.

A special mention also needs to be made to the Polkadot Blockchain Academy (PBA), who were funded by referenda #179, #375, and #584. PBA alumni can be found across the Polkadot ecosystem, with 39 working at Parity, Parachain teams, and ecosystem projects, 6 on the Fellowship, and 60 successfully launching their own Polkadot projects.

Referendum #365 saw the triumphant reunification of WagMedia, after splitting into guilds for most of 2023. With the relaunch of the Finders Program, work began on building the next generation of content creators and ecosystem agents from the ground up. It also saw the return of the fine weekly publication you are reading right now.

We can’t forget Referendum #402 which launched the infamous Marketing Bounty. Thanks to their work, Polkadot, or should I say KOLkadot, became a huge talking point on Crypto Twitter.

Then there are the referenda that kickstarted Polkadot DeFi Summer 2024 #560 and #561. Hydration pools are still offering very tasty yields, and Omnipool TVL has soared to more than USD 56M.

A very important and long awaited ecosystem milestone was initiated by Referendum #680. Finally Snowbridge, the trustless bridge between Polkadot and Ethereum, was launched.

Last, and least, a dishonorable mention goes to ChaosDAO, who deserve no gratitude for providing free beer to Decoded attendees with Referendum #821. Why did they do this?

While Polkadot OpenGov has reached the significant milestones of one year and 1,000 referenda, it has also recently faced criticism for perceived reckless spending and draining the treasury. However, little credit is given to Polkadot, the world’s largest DAO, as a pioneer of decentralized governance.

There is a reason the Kusamarian’s regular live stream is called Attempts at Governance. We have been attempting something unprecedented, a truly decentralized, self-sufficient, and self-governing global organization.

The attempts will continue, and Polkadot DAO will continue to adapt, and evolve its system of governance because that is how the Polkadot ecosystem is designed at the protocol level. With a recent focus on treasury spending, we can expect to see an array of changes to the way funding is allocated.

In the near future we’re likely to see a (HACN approved™) shift toward more retroactive and milestone-based funding. This approach will enhance transparency and accountability. Furthermore, a rise in Collectives and sub-treasuries could lead to more efficient coordination of projects and distribution of funds.

The first stage of OpenGov referenda demonstrated the impact of conviction weighted voting, enhanced delegation, Decentralized Voices, and more. As we move into the next phase, we can anticipate new approaches, but also expect more chaos!

Top Story of the Week Part 2 - Gov DOT Parachains

Written by Sanchez

Polkadot is renowned for having the most sophisticated governance in Web3, a view supported by many industry experts. The Polkadot OpenGov system, just over a year old, recently surpassed one thousand submitted proposals. Although imperfect, ecosystem participants continually strive to enhance and refine the governance process.

Polkadot's parachains inherit the governance capability given the modularity of the Substrate Framework (aka the Polkadot SDK). As recently reported by the Kusmarian, rollups, otherwise known as parachains, have been pushing governance to varying degrees.

Hydration has had the most referenda activity, with 167 referenda since the launch of their governance. Bifrost closely follows with 145, with Interlay coming third with 115. While these are low compared to the figures on Polkadot, there is significant room for improvement in governance on the parachains.

Some parachains still hold Sudo keys and have not yet fully decentralized their networks to empower their communities. Astar Network retains its Sudo keys but appears poised to implement Gov1 for its governance.

Parachains like Acala, Hydration, Centrifuge, and Polkadex have already established effective governance systems, using Gov1 with a substantial number of referenda. Meanwhile, parachains such as Bifrost, Moonbeam (Moonriver), and Picasso have transitioned to using OpenGov for their governance.

Governance on parachains has much less activity than governance on Polkadot, which is expected as each chain is specific, and the governance is geared towards the growth and continuity of the chain.

This specificity and the different ways parachains utilize governance further emphasize the unique nature of governance on Polkadot. We are now going to explore the application of governance by parachains, which is fitting given parachains tend to identify as being application-specific.

Incentivization, particularly through airdrops, has been all the rage since the start of 2024. As such Zeitgeist and Mythical have chosen to incentivize active Polkadot governance by allocating airdrops to participants in exchange for Polkadot Treasury funding.

Similarly, Moonbeam governance participants received a percentage of the Pink memecoin airdrop from the total allocation it received. It’s a bit unclear whether other parachains who received the Pink memecoin allocation did the same, as distribution and announcements details have been vague.

When it comes to incentivization through governance, you can say that Hydration takes it up a notch. Hydration employs a unique mechanism that links governance with on-chain staking to encourage user participation. Users who stake their HDX tokens and engage in governance receive rewards faster than those who do not.

DeFi chains like Bifrost, Hydration, Acala, and Pendulum often rely on governance to manage assets and liquidity. Hydration, for instance, uses governance for asset registration and liquidity decisions. A recent example is the proposal to exchange MRL wETH for ETH on the Snowfork bridge.

Interlay and Pendulum use governance for asset registrations tied to their vault liquidity decisions, and Acala leveraged governance to support asset health decisions for collateralization back when they issued a native stablecoin. Meanwhile, Bifrost has historically applied governance for asset registrations, fee changes, and decisions to ensure the chain's sustainability.

Perhaps the most popular application of parachain governance is for decision-making related to chain upgrades. On Polkadot, this is a key feature for integrating new functionalities or modifying the chain.

Recently, Moonbeam and Ajuna integrated Asynchronous Backing into their chains by submitting proposals open to community support. Overall, if you look at the governance portal for each parachain, you’re bound to see several runtime upgrades.

More unique governance applications have started to appear, often centered around the value proposition and specific application of each parachain.

Arguably the most profound and well-known application is Bifrost’s development. Bifrost is one of the first liquid staking protocols in Web3 to allow receipt tokens of liquid-staked assets to vote on the base chain, allowing vDOT and vKSM holders to vote on proposals on Polkadot and Kusama.

Neuroweb’s application of governance centers around Initial Paranet Offerings (IPOs). These IPOs launch a paranet with a collection of publicly available knowledge assets and include an incentivization structure. The community votes on these IPOs through Neuroweb's governance. Recently, an IPO went live for voting on Polkadot AI, which is a trusted on-chain education agent for the Polkadot ecosystem, powered by Origintrail and Neuroweb.

With the announcement of the Moonrise roadmap, Moonbeam is set to advance general-purpose blockchain application by extending on-chain governance to decentralized applications (dApps). They will introduce governance tracks for dApps, with implementation scheduled for 2025.

To conclude, these diverse uses of Polkadot's governance by different parachains highlight the flexibility enjoyed by projects built on Polkadot. This flexibility is likely to be beneficial, especially considering the ongoing regulatory scrutiny on cryptocurrency projects. The degree of decentralization in governance structures may become crucial for ensuring regulatory compliance.

Polkadot's OpenGov fully decentralizes chain governance, placing all decision-making power in the hands of token holders. This model, also accessible to parachains, offers an advantage by decentralizing their governance and engaging community members dedicated to the project's continuity and sustainability. Additionally, projects can also adopt various governance models to meet their specific needs and actively involve their communities.

News from the Finders Program Part 1

Written by Sanchez

• The funding round for ImpactScope has ended with the team raising $100,000 from 53 participants.

• Crust Network has partnered with Xcavate, a solution for tokenizing real estate assets. Crust will securely store Xcavate's real estate data and help them scale large volumes efficiently.

• Bifrost has ensured the continuity of their Kusama chain by purchasing coretime for the next 28 days for 23KSM, equivalent to $524.

• Kaiser Network joins the Peaq ecosystem, aiming to help AI projects access GPUs by enabling anyone to lend their idle GPUs to these projects.

• Moonbeam partners with Picnic, a non-custodial DeFi application, to streamline the crypto onboarding process for Brazilians to Polkadot. Picnic enables access from 7 different chains to Polkadot. It will ease the integration of the BRLA stablecoin, which is pegged to the Brazillian Real.

• Robonomics has won parachain slot auction 75 through a self-funded bid. With plans to keep the Robonomics Kusama parachain running, Robonomics intends to launch its commercial Roboservice, which will be used in Cyprus and connect with more Polkadot parachains before the end of the year.

• Ajun, the native token of the Ajuna Network, will be listed on the MEXC exchange on the 29th of July and then on Hydration. All Bajun tokens will be swapped for Ajun at 1:1 by the 27th of February 2025.

• The MVP for the Age of Chronos game has been released. With over 350 unique minters, interested players can still mint the NFTs for free and jump into the game.

• Gavun Wudhas partnered with the Kusamarian to release the Flappy Wud 1.1 NFT edition. The conditions for the NFT drop, limited to one per player, include a user's WUD balance and a cumulative score of 3000.

• The Moonbeam Network has activated Asynchronous Backing, which reduces the block time for transactions from 12 seconds to 6 seconds.

• The DOT-USDT pool on Stellaswap receives a GLMR incentive boost.

• The Brazilian Real pegged stablecoin, BRLA, is coming soon on Stellaswap.

• Bifrost has introduced a revenue-sharing mechanism to share protocol revenue with token holders. This is one of the changes in their new tokenomics, BNC 2.0.

• Moonwell has integrated Chainlink's price feeds to ensure accurate prices on their borrowing and lending markets.

• Zenlink has launched Eden, a yield marketplace on the Moonbeam Network. Eden, a Pendle fork, will allow users to tokenize their yield-bearing assets into standardized yield tokens (SY), principal tokens (PT), and yield tokens (YT), enabling users to earn fixed yield, increase their exposure more yield or earn yield from LPs.

• Centrifuge has launched new reporting features for transparency in its app. Users can now easily track the Net Asset Value (NAV) for each pool, access asset pricing data, and view reports such as the balance sheet, P&L statements, etc.

• Acala has announced they will burn 257,000 ACA tokens on the 31st of July.

• Kheopswap, a DEX for Asset Hub, is now open-sourced.

News from the Finders Program Part 2

Written by yay.oi

• To commemorate 1000 referenda on Polkadot OpenGov, Distractive have submitted Referendum #1000 on the Wish for Change track. If approved it will make the on-chain remark: Polkadot 4lyfe.
• Web3 Foundation's Jonas Gehrlein has published a proposal for adjusting Polkadot's inflation system on the Polkadot Forum. He demonstrated a simplified candidate model for 8% inflation with a fixed treasury inflow.
• In light of recent community feedback, Decentered decided to cancel their funding proposal for Sub0 Europe 2024.
• The Hydration community have voted to convert 309.15 unused wETH (Moonbeam Wormhole) from the Treasury to wETH (Snowbridge) in preparation for a potential new Omnipool listing.
• Centrifuge proposes that the Polkadot DAO make an RWA US T-Bills investment in their Anemoy Liquid Treasury Fund (LTF).
• To bring EURC to Polkadot, Pendulum has proposed to register DOT/EURC on their Spacewalk bridge.
• The PolkabotAI Initial Paranet Offering (IPO) goes live on Neuroweb governance, proposing 322,500 NEURO in incentives.
• The DED Foundation has distributed USD 10M of DED tokens to the Polkadot treasury, meaning that OpenGov treasury proposals can now theoretically be paid out in DED.
• To test exotic asset treasury payouts, Giotto proposed a 1M DED tip for himself, although according to Joe Petrowski it won’t work because the asset conversion rate has not been set for DED.
• Alan Vey (Aventus) and Ivor Jugor (MVP Workshop) recapped Phase 1 of the Aventus 2.0 token redesign on July 15th.
• On July 17th, Peaq hosted the DePINa Colada Happy Hour, a casual get-together featuring Scott Bourke (Peaq), Your Friend Andy (KOL), Phygital (KOL), Alan Carrol (Pudgy Penguins DePIN Spaces), William (DePIN Daily), Ray Buckton (RWA World), Sophie MAXX (KOL), Sergeant SOL (DePHY).
• Thiago Castroneves (Moonbeam), William Ten Zijhoff (Carbify), Joao Ferreira (Picnic), and Rafael Castaneda (Valocracy DAO) discussed crypto adoption in Brazil, onboarding the BRLA stablecoin, and tokenized carbon neutrality with Amazonian NFTrees, On July 17th.
• DeStore and Invarch founder Dakota Barnett had an AMA and launched the Invarch DAO Staking ISPO Allocation Tool, on July 18th.
• LAOS hosted Mandala Chain's Michael Bennallack and Pak1man on July 18th to compare notes on Polkadot Decoded in Brussels.
• Litentry was joined byIdentity Odyssey Season 3 Partners Harden (Cards Ahoy), Montana (Optopia), Jason (BitYuan), Cava (TunaChain), and Maria (Daren), on July 19th.

That is all for this week. If you enjoyed the newsletter, please share it. You can subscribe on Substack to receive an email when next week's edition is ready. And if you're participating in creator staking on Subsocial, you can interact to increase your rewards — perhaps a good two-for-one deal by providing feedback or comments.

Awesome cover art created by Dodow.