This section tracks all 1IPs that have made it to the Phase-4: Snapshot Vote of the Proposal Lifecycle.
All 1IPs that are currently active in the Phase-4 voting process:
All 1IPs that have successfully passed the Phase-4 vote. These 1IPs have already been implemented or are in the process of being implemented:
#[1IP-13] Governance Process Improvements
Full Proposal Description
1IP-13 “Governance Process Improvements” introduces changes to the current governance process to create a more agile yet robust process.
It takes around 12 days to implement a change via governance. This is time-consuming, especially since there is no express pathway to execute proposals in time-sensitive situations.
1IP-13 will reduce the current governance timeline in different ways to ensure that governance changes can be enacted swiftly without compromising security.
The current 1inch governance framework is far too long, which can hinder the DAOs ability to execute quickly.
- Current Process
- New Process
The current process can be found here, but here is a summary.
Phase 1 (Discussion) & Phase 2 (1IP formalization) have an open-ended duration, so they have no specific deadline.
Phase 3 (temperature check) lasts five days. Proposals stay unchanged in this phase.
Phase 4 (Snapshot Vote) lasts seven days.
Phase 5 (Implementation) lasts a minimum of six days - This can be ignored since it does not involve the community.
This means that the current governance process (ignoring phase 5) totals a minimum of 12 days to pass a proposal.
We recommend the following amendments:
- Phase 3 - Reduce from five days to three days.
- Phase 4 - Reduce from seven days to five days
These changes ensure enough time to cast a forum and snapshot vote without compromising security. Across other DAOs, having a Snapshot vote last around five days is common practice. It provides a grey area between 3 days (too short) and 7 days (too long).
- Phase 1 & Phase 2 - Open-ended
- Phase 3 - Lasts three days
- Phase 4 - Lasts five days
- Phase 5 - Lasts seven days
This new governance process (ignoring phase 5) totals a minimum of 8 days to pass a proposal instead of the original 12 days.
The lengthy process has hindered the DAOs’ ability to execute promptly in the past. This reduction will still ensure a suitable amount of time for DAO members to participate in the DAO without sacrificing security.
This will make it easier for the DAO to pass proposals that could open a security risk to malicious actors.
- Discuss the Proposal
- Forum temperature check
- Move it to a vote
- [Yes]: Implement these governance changes
- [No]: Do not implement these governance changes
#[1IP-12] Improve Fusion Auction Resolver Competition
Full Proposal Description
This proposal seeks to modify 1inch Fusion to allow all five of the top resolvers to fill orders during the entire duration of the Dutch Auction.
If passed, this proposal will change the way that 1inch Fusion orders are filled by allowing all five resolvers to participate in every stage of the Dutch auction. This change will increase competition amongst resolvers and ensure that users are getting the best rates.
Currently, the top five resolvers are given fill priority according to their Unicorn Power. For the first minute of the Dutch auction, only the resolver with the highest Unicorn Power can fill the order. Then, the resolver with the second most Unicorn Power joins them for the second minute, and so forth… This proposal will foster a more competitive auction by giving all resolvers equal priority.
This proposal aims to increase competition amongst resolvers and thus provide better rates for users when they make swaps via the 1inch Network.
This proposal serves as a signal from the 1inch Network DAO to 1inch Labs. Once passed, the 1inch Network DAO calls for 1inch Labs to modify the Fusion logic to allow all five resolvers to participate in every stage of the Dutch auction.
Above is the existing Fusion auction order structure.
Below is the modified Fusion auction order structure that this proposal calls for.
Allowing for pure competition amongst the five resolvers, rather than giving preferential access based on staking power, will facilitate better swap rates and faster execution times.
This change will also make it more attractive for professional market makers to become resolvers, which may lead to a greater demand for 1INCH token as they accumulate the necessary Unicorn Power.
1inch Fusion mode has already been audited and deployed. This proposal will have no negative security implications as it will only change the structure of the Dutch auction.
An increase in the number of resolvers participating in the Fusion auctions should reduce the likelihood of resolver collusion.
#[1IP-11] 1inch Staking Pods
Full Proposal Description
GitHub - 1inch/erc20-pods 7,GitHub - 1inch/farming 5,GitHub - 1inch/delegating 1
This proposal seeks to implement a new Staking Pod mechanic for the 1INCH token. This system will consist of:
- Incentivised time-locked 1INCH staking
- Permissionless delegation pods
- Reward distribution compatibility
- 50% of all current, and future, 1inch DAO protocol revenue shall be distributed to stakers
With the Staking Pod system, users lock their 1INCH tokens in a staking contract to get st1INCH tokens — the longer the lock period, the more st1INCH tokens the user gets. st1INCH tokens can be used by stakers for 1inch DAO governance, and the 1inch DAO can choose to use these token balances for reward distribution. The system is modular as anyone can launch a new Modular Delegation Pod and can use the reward functionality to incentivize certain actions and/or assign utility to the 1INCH token. 50% of all current, and future, 1inch DAO revenue shall be distributed to stakers.
1INCH token is the governance token of the 1inch Network. It provides voting rights within the 1inch DAO’s governance system, and users can stake it to receive a refund 3 on their transaction fees. However, despite these functions, the amount of 1INCH tokens currently being held in staking contracts is quite low and governance participation is even lower. We believe that this is due to a lack of incentives to participate in governance and a lack of additional utility for staked 1INCH.
By introducing Modular Staking Pods, we hope to give stakers more direct control over how their stake is used to power the 1inch Network. This change will allow them to independently select how their stake governs each of the protocols and will allow for rewards to permissionlessly be distributed based on the actions of the stakers. We envision that this will improve the goverance by aligning incentives between people who want to stake to earn rewards and those who are interested in protocol governance – both players will have direct incentives to participate in the same system.
We believe that this proposal represents a step forward for the 1inch Network and that it will help increase adoption and usage of the network’s future protocols.
Like the existing 1INCH staking contract, users will be able to lock their 1INCH tokens in the staking contract to get st1INCH tokens that can be used for 1inch DAO governance. However, unlike the current system, Modular Staking will require users to lock their 1INCH for a set amount of time.
The minimum and maximum lock periods are chosen by the DAO through — for the purposes of analysis, we’ll use 1 month and 2 years as the minimum and maximum staking periods respectively. st1INCH tokens grant users “voting power” which they can use for various use cases. The longer the locking period the more “voting power” resolver can get. However, the increase in power is not linear.
There will be a minimum locking period of 1 month.
Note that st1INCH voting power will decay over time according to the locking curve. Also note that users can re-lock their stake at any time to refresh their st1INCH balance. Users will be able to withdraw their stake early but will forfeit a portion of their rewards.
Orange is the amount lost when a staker withdraws earlier than they originally committed.
In 2023, Sally stakes 100 1INCH and selects a 2-year lock period.
They receive 100 st1INCH from the staking contract and this balance decays over time.
By 2024 Sally’s st1INCH balance has decayed to 22.36
Sally then chooses to re-lock her stake for the maximum amount of time, 2-years, and her st1INCH balance is increased to 100.
Sally chose not to re-lock, and in 2026, after the lock period, she withdraws her original 100 1INCH.
If a st1INCH staker wishes to unlock they will forfeit some of their tokens based on the following equation:
withdrawalAmount = (balance - votingPower) / 0.9
penalty = balance - withdrawalAmount
In this setting, the maximum early withdrawal loss is 90% as the minimum locking period is 1 month
The 1inch DAO Treasury Address, 0x7951c7ef839e26F63DA87a42C9a87986507f1c07, would act as admin of the staking contract with control over the following functions:
setFeeReceiver – this would allow the DAO to change the vault to collect the rewards for later distribution between stakers and the DAO treasury.
setDefaultFarm – this would allow the DAO to change the default reward distribution contract for 1INCH staking.
setMaxLossRatio – this would allow the DAO to change the earliest point at which people can early withdraw their stake by disallowing withdrawals with larger withdrawal fees.
setEmergencyExit – This is basically an abort function and would allow the DAO to end the staking scheme. All stakers can reclaim the entire amount of their original stake regardless of their remaining locking period. This would be used if the DAO wanted to migrate to a new staking contract to change key variables, like the maximum lock period.
The Modular Delegation system provides users with a set of delegation contracts that are specific to a topic. The set of delegation contracts is permissionless, meaning that anyone can deploy one and allow users to delegate their st1INCH within it.
The 1inch DAO will have the power to endorse a delegation contract and feature it in the 1inch staking UI.
For the start, we propose just two delegation topics:
Snapshot governance delegation
- This will allow users to delegate their Snapshot voting power to a recognized delegate from the UI, or manually enter an Ethereum/ENS address.
- Nested within this is the vanilla Snapshot space-specific delegation contract 1.
st1INCH utility delegation
- As part of this staking upgrade, there will be a new protocol added to 1inch’s suite of DeFi tools that will substantially improve the utility of st1INCH.
- Service providers that want to tap into the utility of st1INCH can proposition the community for delegated power.
Modular Staking will have two levels of reward functionality: Generic st1INCH rewards and Modular Delegation rewards.
Generic st1INCH rewards
The st1INCH contract will allow anyone to run a farm to distribute rewards to everyone holding st1INCH tokens.
Users also have the ability to to join as many farms as they want as it does not required a user to move their st1inch to a specific farm. Along as a user holds st1inch in their account, they can receive rewards from multiple farms.
This proposal calls for 50% of all current, and future, 1inch DAO revenue to be distributed to stakers in the form of 1INCH.
Modular Delegation rewards
Some Modular Delegation contracts have an integrated rewards function that anyone can run a farm atop.
The main advantage to this type of reward is that it is not limited to being proportional to a user’s st1INCH holdings. Any action, onchain or offchain, can be used as the basis of reward distribution. This functionality could be used by the 1inch DAO to incentivize anything from editing 1IPs to using a new 1inch protocol (and everything in between).
Example: The 1inch DAO may use the Snapshot governance delegation contract to incentivize active governance participation by boosting the st1INCH rewards of people who vote on proposals, delegate their st1INCH to active voters, etc…
The rationale for this proposal is to provide a more flexible staking system that can be used to incentivize various activities within the 1inch Network. The new Modular Delegation contracts will allow for rewards to be distributed based on anything from voting on proposals to using new 1inch protocols. This will provide a greater incentive for users to participate in the network and help drive adoption of new 1inch products and services.
The security considerations for this proposal are mainly around the potential for abuse of the new staking and delegation contracts. It is important to ensure that there are adequate safeguards in place to prevent users from delegating their voting power to malicious actors.
The governance considerations for this proposal include the impact on revenue streams and changes to the governance processes. This proposal could potentially increase revenue for the 1inch DAO if it is successful in incentivizing more users to participate in the network. It is also worth considering how these changes will impact existing voting processes within the 1inch DAO since the existing staking contract will be deprecated.
#[1IP-09] Collect 1inch DAO Treasury Revenue in 1INCH Token in Addition to USDC
Full Proposal Description
This proposal seeks to modify the 1inch Network DAO Treasury’s revenue collection strategy by enacting the following changes:
- Switch from buying USDC with Swap Surplus revenue to buying 1INCH when the price is lower than $1.30.
- Switch from buying 1INCH with Swap Surplus revenue to buying USDC the price of 1INCH is greater than or equal to $1.70.
Currently, the Swap Surplus revenue stream is collected in varying tokens and swapped to USDC before it is then sent to the 1inch DAO Treasury. Once enacted, this proposal will instead swap these tokens to 1INCH as long as the market price of 1INCH is below the $1.30 to $1.70 range (see the Specification section for a detailed explanation). All swaps will be done using the 1inch Aggregation Protocol to ensure the best pricing.
Benefits to the 1inch Network DAO include:
- Investing the DAO’s revenue stream into the protocol’s governance token while the governance token is lower than it was previously valued.
- Potential upward pressure on the 1INCH token as the DAO Treasury will be a net buyer of cheap 1INCH.
- When the token is trading at higher valuations, the Treasury will automatically de-risk by collecting revenue in stable coins.
- Holding 1INCH within the 1inch DAO Treasury will allow the Treasury to scale its value with the performance of the token.
This proposal serves as a signal from the 1inch Network DAO to 1inch Labs. Once passed, the 1inch Network DAO calls for 1inch Labs to modify the fee collection strategy with the following changes:
- When the price of 1INCH moves is below $1.30, Swap Surplus revenue shall start to be collected in 1INCH.
- When the price of 1INCH moves above $1.70, Swap Surplus revenue shall be collected in USDC.
Once the modifications have been made and tested, 1inch Labs shall deploy them. All future modifications to these will need to be done by a 1inch DAO Governance vote.
This proposal aims to purchase 1INCH with treasury revenue when the price is lower than ~$1.50. $0.20 bands are used on either side of this buying point in order to dampen the impact that market volatility could have.
This price point of 1INCH that triggers the switch can be changed in the future via a governance vote.
The USDC stablecoin composition of the 1inch DAO Treasury puts the Treasury in a very good position during any bearish market cycles — the Treasury constantly grows in dollar value while, in contrast, projects that primarily hold their own token, have had the real value of their Treasury shrink in the last 6 months.
Adding 1INCH to the Treasury composition will increase both the potential risk and potential returns. This proposal dampens the volatility by maintaining a mix of risk-on and risk-off assets.
If enacted, this proposal will add complexity to the Treasury Revenue collection strategy.
#[1IP-08] Simple diversification mechanism for 1inch DAO Treasury
Full Proposal Description
This proposal seeks to diversify the 1inch Network DAO’s Treasury composition be enacting the following strategy:
- Do not exchange a whitelisted set of tokens for USDC before sending to the 1inch DAO Treasury.
- These whitelisted tokens shall be: ETH, WETH, WBTC, DAI, and USDT.
Currently, all of the Swap Surplus revenue stream is collected in varying tokens and swapped to USDC before being sent to the 1inch DAO Treasury. To start the diversification process of the treasury funds, the protocol can keep some incoming Swap Surplus tokens as collected (not swapping them for USDC).
This proposal aims to whitelist the following tokens for this treasury collection strategy:
The 1inch DAO Treasury is 100% composed of USDC. USDC is a fiat-backed stablecoin pegged to USD managed by Circle.
USD experienced record inflation over the last 12 months, and will experience some degree of inflation for perpetuity. As such, the marginal spending power of the 1inch DAO Treasury is weakened unless the DAO deploys the funds in a manner that can outpace inflation.
These assets are viewed as risk-on diversification assets for the treasury:
- ETH – the native asset of the Ethereum blockchain
- WETH – ETH wrapped in an ERC20 wrapper
- WBTC – Bitcoin (BTC) is the oldest and largest digital asset. WBTC is Bitcoin wrapped in an ERC20 wrapper
Stablecoins also have inherent risks such as smart contract risks and centralization risks. Diversifying the stable coin holdings of the 1inch DAO Treasury aims to hedge against these risks. These assets are viewed as risk-off assets for the treasury:
- DAI – the decentralized collateral-backed stablecoin issued by the Maker Protocol. DAI is soft-pegged to USD
- USDT – the fiat-backed stablecoin pegged to USD and managed by Tether
To implement this proposal, GovernanceLeftoverExchanger should transfer ETH, WETH, WBTC, DAI and USDT directly to the treasury the same way it transfers USDC. All other tokens should still be converted to USDC as they are now.
The crypto market cap took a decline in recent months. With token valuations depressed, it may be a good time to start accumulating non-stable tokens to grow the treasury.
Since exchange transactions cost some Ether to pay for the gas fees, eliminating the swapping step for these whitelisted tokens will increase the capital efficiency of this operation. It is also for this reason that large stable coins such as DAI and USDT, should be sent directly to the treasury.
The current stablecoin composition of the 1inch DAO Treasury ensures that the Treasury is insulated from bearish market cycles. However, this also means the treasury’s funds have no way to keep pace with the rise in inflation. Adding ETH, WETH and WBTC increase both the risk and the potential rewards.
This proposal does not call for any actions to be taken with the funds currently held by the 1inch DAO Treasury.
#[1IP-07] Integrate Balancer Boosted Pools in the 1inch Aggregation Protocol
Full Proposal Description
This proposal calls for the integration of Balancer Boosted Pools into the 1inch Aggregation Protocol.
This proposal aims to grow the kinds of liquidity sources compatible with the 1inch Aggregation Protocol by integrating Balancer Boosted Pools. To fund this development, a BAL grant from Balancer DAO and Balancer DAO will be awarded to 1inch Labs upon the successful completion of the integration. Specifically, the following
- 1inch Labs shall integrate the Balancer Boosted Pools into the 1inch smart contracts, the 1inch dApp, and the 1inch API.
- The integration shall be live on the Ethereum main-net no later than 3 weeks after this proposal passes the Phase-4 snapshot vote.
- If both conditions 1 and 2 are met, Balancer DAO and Balancer DAO will transfer 20k BAL or the equivalent in stablecoins (as determined by Balancer DAO) to 1inch Labs.
Balancer Boosted Pools are a new pool type that have been gaining traction from many DeFi protocols. These pools were previously discussed with the 1inch community on the 1inch Governance Forum as well as the 1inch Network DAO Community Call #02.
Given that this is a new pool type and requires effort from 1inch Labs, Balancer seeks to fund this integration via a payment of 20,000 BAL to 1inch Labs.
At a high level, integration of Balancer Boosted Pools would require support for Balancer’s BatchSwap function, the routing of trades through multiple Balancer pools including linear pools nested in the boosted pool and the math in the linear pools. This proposal hopes that the support for Boosted Pools is general and can later be expanded to new future Boosted Pools. The integration of Balancer’s BatchSwap function within the 1inch Network will also be able to be used for pools other than Boosted Pools which would benefit both the 1inch Network and Balancer as it would allow for cheaper execution of trades from the wider Balancer pool types. In the near future we expect to see meta pools created with the BPT of Boosted Pools, an example would be a bbaUSD/WETH pool. Routing trades through such pools would include one or more extra hop through Balancer’s BatchSwap function.
We expect that there will be many new Boosted Pools across all networks in near future, namely poos in collaboration with Ampleforth and Olympus although, below is a non-exhaustive list of currently live Boosted Pools on Ethereum L1:
- bbaUSD, containing 300mm of DAI/USDC/USDT TVL
- bbfUSD, expected to contain at least 50mm of FEI/LUSD/DAI
This is contingent on the same proposal passing through the BalancerDAO.
Upon satisfactory integration Note1, 20,000 BAL shall be sent to 1inch Labs ETH address:
Note 1: Satisfactory integration is defined as the 1inch Aggregation Protocol accurately forwarding trades through the bbaUSD and the bbfUSD pools, on Ethereum main-net, when those pools offer the optimal pricing for the end-user.
Support for the mentioned pools will unlock $350mm of efficient TVL for the 1inch Aggregation Protocol and allow it to have access to cheap liquidity for trade routing at the moment of integration and much more TVL in the future as Boosted Pool continue their adoption. Additionally, Boosted Pools have been adapted by BeethovenX, Balancer’s Friendly Fork on Fantom and, integrating them would provide a good source for volume to 1inch on Fantom as well.
Balancer Boosted Pools are in much demand from other DeFi protocols due to their innovation in capital efficiency thus, it is expected to see many more Balancer Boosted Pools with high TVL in collaboration with other DAOs, some of which were mentioned in the discussion on the forum. Supporting Boosted Pools will position the 1inch aggregator to be able to rapidly integrate any new Boosted Pools launched.
This BAL grant would be used by 1inch Labs to fund the development of this integration.
The technical specifics of this integration will be defined by 1inch Labs. Like all new modules they have launched, a complete internal security review and audit should be performed before this change is implemented on main-net.
Because Balancer DAO is directly funding this integration, other upgrades to the 1inch Network can be made in parallel.
#[1IP-05] Add Derivative Aggregation to 1inch Network
Full Proposal Description
This proposal seeks to add derivative aggregation to the 1inch Protocol. Specifically, it calls for the following additions:
- Aggregation Protocol is expanded to include derivatives
- Add derivative aggregation to the 1inch smart contracts, 1inch dApp, and 1inch API
- The first derivative supported will be Opium’s TURBO products (call options)
This proposal aims to signal to the 1inch Foundation that the DAO wants to add derivative aggregation to the 1inch Protocol – specifically, the 1inch smart contracts, the 1inch dApp, and the 1inch API. Adding derivative aggregation to the protocol will require technical effort from 1inch Labs, and will require the support of 1inch Foundation.
1inch is currently the leading decentralized exchange aggregator and has made a reputation of providing the best prices on token swaps. With the rise of derivatives in the DeFi space, there is a new product niche that 1inch is perfectly positioned to capitalize on: the aggregation of derivative products.
By implementing this proposal, 1inch will solve the problem of fractured derivative liquidity (just like it previously solved fractured token liquidity).
This proposal serves as a signal from the 1inch Network DAO to the 1inch Foundation and 1inch Labs. Once passed, the 1inch Network DAO calls for the 1inch Foundation to allot resources to add derivative aggregation to the 1inch Protocol and dApp, and for 1inch Labs to add derivative aggregation to the 1inch smart contracts and 1inch API.
Opium’s TURBO product is a short-dated call option:
- Community / users can “write” covered calls by pooling their tokens in order to earn yield (collect call option premiums)
- Takers (professional market makers) can buy the call options in order to gain leveraged exposure to the underlying asset
Adding Opium’s TURBO options to the aggregation UI will require coordination with the Opium community to ensure a smooth integration.
The architecture of the aggregation protocol has not yet been defined.
Opium’s TURBO product was chosen as the first derivative supported because the Opium community was offering to help with this integration via documentation and SDKs.
The specifics of launching an aggregation protocol will not be defined until the 1inch Foundation supports the proposal. Like all new modules they have launched, a complete security review and audit should be performed before this change is implemented on mainnet.
Since all work described in this proposal will be organized by the 1inch Foundation, this will not cost any treasury funds.
All 1IPs that did not pass the Phase-4 vote. These 1IPs did not meet the minimum quorum, and/or a majority of the voting weight was opposed to the change: