Arana Digital is a team experienced in DAO governance, operations, growth and research. Our members are deeply steeped in the crypto space and have multiple years of participation in protocol governance. With delegation history for DEXs, money markets, L2s, liquid staking protocols, and stablecoins, we’re acclimated with a breadth of sectors. We bring a diversity of experience to DAOs–our members have consulted for companies like Immutable and dYdX, worked at crypto investment and trading firms, set up various validator nodes, and run educational events for university students.
Motivation
It’s clear that Paraswap has achieved market fit on multiple chains, ranking frequently as the 3rd most used DEX aggregator across various EVM environments. Unlike many other protocols, there is also a business model present, one that distributed revenue among staked token holders and the DAO. The 20% revenue inflow for the DAO has over the past couple of years diversified the treasury. To those ends, Paraswap has a strong basis as a protocol and business; however, community participation in sustenance and growth of the protocol, outside of the core team itself, has been lackluster and only declining. Unless the DAO is revitalized through the incorporation of important governance frameworks and initiatives, it will be difficult to offload responsibilities from the core team, making Paraswap unable to become a truly decentralized organization. Since our team has been involved in the growth and development of various DAOs, we hope to bring those experiences to Paraswap, aiming to uphold the interests of the $PSP token holders—and broader ecosystem stakeholders as well.
Driver and Values
Diligence: We thoroughly investigate each proposal, engaging with other delegates and service providers to gather diverse perspectives and insights prior to making a decision.
Transparency: We openly share information about decisions and their rationales, providing clear and accessible updates, and ensuring that all processes are effective to the community.
Innovation + Sustainability: We champion initiatives that will both allow the DAO and its underlying protocol to sustain its advantages, all the while continuously looking to iron out flaws and introduce efficiencies.
COI Disclosure
We are actively involved as delegates and contributors in multiple other DAOs. Any relevant conflicts of interest will be publicized when needed.
Waiver of Liability
By delegating to Arana Digital, you acknowledge and agree that Arana Digital participates on a best efforts basis and will not be liable for any form of damages related to its involvement in Paraswap governance.
Automation for gas refund makes sense in our eyes. Most functions like this in the long term should not be manually conducted. Therefore, we are in support of this proposal. Focusing refunds on Ethereum mainnet—where the majority of refunds originate—optimizes resource allocation without significantly impacting users on other chains. This is a practical step toward making ParaSwap’s incentives more sustainable and scalable.
This proposal calls for a drastic change—and we are in support of it. The move towards intent-centric trading will allow for the protocol to ensure it stays up-to-date with ongoing innovations. The 15% allocated to the DAO for distribution seems fair, but the respective proto and retro funding of 7% seems a bit low. Ideally, a larger portion of funds remain for future funding of ecosystem contributors. However, the involvement of the DAO collectively may not be the smartest way to distribute grants and incentives. Over the coming months, the DAO should align on what sorts of objectives it wants to achieve to best help propel the protocol once Miró goes live. A system of committees of elected members is likely a strong step towards critically thinking about protocol growth and capital allocation. One part that confused us from an allocation point was how “DAO Operations and Service Providers” fits into the picture with the grants. There could be double-dipping in terms of initiatives if the DAO and the Foundation do not work in tandem. I’m sure some of these details will be ironed out over the coming months—but the general direction of the proposal is certainly favorable and brings PSP into a more competitive position.
We voted in favor of this proposal because it introduces a more robust system for facilitating PIPs. The processes make sense, but the implementation and accountability associated with seeing these processes through will be initially taxing. A couple of larger DAOs have subverted these types of issues by having onchain votes, where execution of proposals is programmatic—and before certain proposals go through, there may be auditors on hand to review the technical side of the proposals. Here, it is still a bit unclear what that entity will look like. A governance facilitator or accountability committee could help with that process. This probably can consist of a small group (no more than three entities) since there isn’t a very large pipeline of consistent proposals. It will be good to communicate with the Foundation on a couple of these elements and align/divvy operations.
A proposal like this may be more welcome in a separate grant program that will likely be set up in the coming months. A one-off grant for research does not seem to be the most prudent use for capital, and updates for initiatives like project Miro will be openly and clearly disclosed by the PSP team directly on the forums. There isn’t much need for a secondary source to summarize such updates. There are also other venues where research around aggregators is presented, like Messari, Artemis, Binance research, etc. Other delegates like Avantgarde have also conducted similar research. Therefore, this is something best dealt with in a future grant program.
This loan from the DAO to help facilitate the transition from the sePSP1 staking token to the new sePSP2 token makes sense. We don’t really see any risks with the loan as long as all of the capital is returned to the DAO in a timely manner. There aren’t many active expenses for the DAO to cover at the moment, so having large amounts of working capital right now isn’t a worry. We voted in favor of this.
Paraswap DAO has increased its overall activity since the incorporation of the delegate program led by the Seed team. More teams, including ours, have begun participating in the ecosystem—and the inclusion of a delegate incentive program furthers the attractiveness of professional entities getting involved in PSP governance. We therefore voted in favor of this proposal.
This topic has been heavily debated on the forums over the past couple of weeks, and we sympathize with both sides of the table. On one hand, the ethos of blockchain and crypto is to create and sustain permissionless rails, which should function independently, regardless of how they are used. However, the other side asserts that ill-gotten gain from illicit transactions should be returned to the entity that was subject to the loss. We generally agree with the first perspective, but only if the system is truly permissionless. The issue with PSP fees at the moment is that they are routed entirely manually. Even after the system to make them more automated comes to fruition, the DAO has the ability to direct fees in whatever direction it wills. Discretion in fee management by definition makes the system partially permissioned. And so, because of this caveat, we believe that funds should be returned to ByBiy because they are able to be returned. If the fee distribution was fixed and immutable, then the 80% that goes to stakers would’ve been impossible to recover. The DAO’s 20% no matter what should be returned because it is discretionary. But since 100% of the fees are manually routed, it follows that ALL should be returned under the current state.
Adding Base as a hub for staking makes sense to us. The growth of Base is undeniable, and allowing users the capacity to leverage the L2 for attaining PSP rewards could draw more token holders. We are not sure what the current split of stakers is in terms of whether a token holder with PSP stakes on multiple chains—or if they’re simply using one chain. It seems to be a no-brainer to push rewards on the chain where the user has the most stake. Base may very well eclipse OP and Eth as the main venues over time. The 40k budget requested here seems justified.
Based on our feedback on the original forum post, we are in favor of a general increase in the quorum threshold because it increases the difficulty with which proposals can pass, thereby calling for more scrutiny in analyzing votes. The impetus for this is largely the recent uptick in DAO activity from the DIP and further distribution of voting power.
We voted in favor of going forward with the governance task force because of our belief in SeedGov’s ability to properly act as an exosystem steward:
It’s always handy to have a core team with the explicit mandate for helping the DAO maintain and develop its operations, in addition to the work being conducted by Foundation and Laita. The stated compensation structure also makes sense. We had a couple of inquiries around the additional source of incentives attached to growing protocol revenue. Our concern was mostly around what that compensation is being attributed to:
The team had a satisfactory answer to our question, and there is an interim review in any case at the 6-month period, so we are content with the proposed setup.