ENS governance battle, EF cuts and Gnosis reboot

Last week was a dramatic week for DeFi with the Ethereum Name Service ($ENS) DAO faces a proposal branded as an attempt to “steal its treasury,” Gnosis DAO reiterates recent treasury redemption discussions, and the Ethereum Foundation announces a 20% staff cut.

The proposal opposite the $ENS DAO titled “Next Era of $ENS DAO: Strengthening the $ENS Foundation”, the day-to-day operations and treasury assets would be transferred to the $ENS Foundation, “led by a full-time executive director and staff.”

It cites issues such as “delegation fatigue,” exacerbated by the DAO making “too many small decisions and not enough big decisions,” a lack of accountability of grant recipients, coordination problems and the potential to strain treasury funds.

Lefteris Karapetsas, who admits that he is “inactive and no longer participating in the DAO board,” got into a heated argument with $ENS lead developer Nick Johnson, who worries that the DAO is “almost exclusively concerned with how best to spend the public purse.”

Karapetsas accuses Johnson of “delegation[ing] ~50% of total vote supply for yourself,” although Johnson counters that such low delegate participation “is a testament to how difficult it has been to keep the DAO secure using token-weighted delegate voting.”

The two clashed over this topic almost six years ago.

Johnson emphasized the need for the legitimacy of a DAO over government bond spending, while Karapetsas had hoped $ENS would have no token at all.

The author of the controversial proposal, Katherine Wu, made a lengthy post in an attempt to “clarify some things”, but by disabling the comments she has only received more criticism.

Johnson has insisted on this $ENS was always intended as a purely administrative sign, with the treasury intended solely for ‘building up’ $ENSand…financing public goods, and may not be used for anything else.”

With many upset about the direction of Ethereum’s most popular naming service, an L2BEAT researcher decided to build an “ownerless and irrefutable” alternative.

According to data from DeFiLlama, the $ENS DAO’s coffers are valued at about $350 million, or $88 million if the project’s own funds are not included. $ENS sign.

DAO treasuries are occasionally targeted by so-called “RFV raiders,” who buy up large voting positions to use the board to redistribute DAO assets.

One such activist investor suspects that the switch from $ENS could be to prevent such a ‘raid’.

Another long-standing DAO, Gnosis, recently faced such a government bond redemption proposal, which was ultimately rejected.

However, the DAO ultimately voted in favor of a second, simplified version of the idea, which was “developed together with the Gnosis founding team.”

The governance drama comes during a troubled period for Gnosis, with the Gnosis Pay crypto card recently suffering a security breach and the X-handle being compromised to promote a phishing site.

Fired from Ethereum Foundation

Following a number of recent high-profile departures, the Ethereum Foundation has announced a 20% staff reduction.

In a blog post chock full of euphemism, the foundation announced that a reorganization would mean “parting ways with 54 of our colleagues.”

Ethereum co-founder Vitalik Buterin expanded X and tied the layoffs to a 40% reduction in the foundation’s budget this year.

He highlights the loss of “brilliant” colleagues and presents the changes as the “third iteration” of Ethereum.

It includes optimizing the ‘multi-client model’ for specialization, ‘implementing ZKP-based privacy and scaling’ and reducing the scope of non-development activities.

Meanwhile, non-profit R&D company Ethlabs announced its launch, with former EF member Barnabé Monnot joining the organization.

In other DeFi news…

When a predatory MEV bot gets into trouble, scammers waste no time taking advantage.

After Subway.eth’s infamously prolific sandwich maker fell into an expertly crafted endorsement booby trap last weekend and lost $7.5 million, a scammer wasted no time setting up a fake X account to capitalize on the attention.

The account has since been used to promote fake bounty offers and giveaways and even launched its own Pump Fun token.

The JARED token struggled to break the $25,000 market cap and is currently trading at just $9,200.

Meanwhile, it appears the genuine 50% premium offer fell on deaf ears as the proceeds were laundered through Tornado Cash on Tuesday.

Recent exploits on Taiko and SecondFi have security researchers scratching their heads.

Taiko developers apparently left a signature key on GitHub, which was initially thought to be the cause of a recent $1.7 million hack.

However, one SuccintLabs developer’s theory is that the root cause was a “missing check,” and not the leaked key. The attacker was able to rebuild Taiko’s prover in debug mode, extract an ‘in-enclave signing key’ and use that to clear the bridge.

Subsequently, what started as a $2.4 million hack on Cardano wallet provider SecondFi was thought to be much bigger, until the company assured users that the majority of the money was rescued in a whitehat operation.

The problem was that days later, Cardano founder Charles Hoskinson claimed that Emurgo, the developer of SecondFi, didn’t know who the whitehat was…

The bug itself was reportedly due to a very basic and unfortunately named ‘public nonce’ issue, which allowed an attacker to use public transaction data to backcompute the private keys of SecondFi wallets.

Coinbase’s layer two network Base went offline on Thursday, marking its second outage in less than a year.

According to the network’s status page, the chain crashed after “a consensus issue caused an invalid block to be sequenced.”

After about two hours, the block sequence resumed, requiring any stalled nodes to be restarted and resynchronized.

Less than 24 hours later, however, the disruption flared up again.

Finally, the shutdown season continues.

Credit platform Ionic Money announced that it could not recover from last year’s hack (not to mention the two hacks it suffered in 2023 under its previous name Midas Capital).

After a bank run, Altura decided to shut down its AVLT amid the Main Street msUSD depeg chaos.

Loopring, “the very first zkRollup on the market,” is coming to an end, citing a lack of “meaningful adoption.” Users’ assets are returned directly to their wallets.

And after more than a year of decoupling, Synthetic sUSD will be deprecated after a lock-up period at “a slight premium to face value.”