Osmosis Governance: 362 and Beyond

    Introduction

    • In this Analysis, You will read about one of the most recent proposals on Osmosis. Proposal 362.

    • Governance in the Cosmos ecosystem has been a hot topic of late - first with Cosmos Hub 82 and now in Osmosis. Osmosis Prop 362 is a vote to decide the fate of the Osmosis Grants Program (OGP). Contention aside, there have been many points and counterpoints, AND a ton of vote switching.

    • I went through Proposal 362 and analyzed these parameters:

    • Voters

    • Vote powers

    • Users Balance

    Analyzed by Hess - Reading Time Almost 8 min.

    What is Osmosis?

    • Osmosis is a DEX protocol, which means it uses smart contracts to determine the price of digital assets, to produce liquidity via a peer-to-peer (P2P) methodology, and to exact trades between users. This approach to an exchange platform is known as an AMM — a DEX protocol that prices crypto assets in liquidity pools.
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    Voting Activities

    There are some rumors that a ton of voters change their votes after recording their first vote. Let’s examine the total number of changes during the voting.

    • As you can see, There are 288 Unique voters that changed their votes. From the beginning of voting, There were some users that changed their votes. The ratio of voters that changed their votes is not too high. About 3% of voters changed their votes. Now it’s time to examine which types of users changed their votes. We will find out in next sections.

    Vote Changes

    • As I mentioned before, About 288 unique voters changed their votes. About 272 unique voters changed their votes once. There were 16 voters that changed their votes more than one time. The highest number of changes was Yes → No and No → Yes. The third most change was No with Veto → No.
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    New Vs. Old Voters

    • I mentioned before that it seems most voters were new to Osmosis governance. As you can see, 84% of users are new to Osmosis. Only 15% of voters were old users. Based on the hourly chart, The highest number of voters on November 15 were new users.
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    Compare Proposals ( Last 60 Days )

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    User Balance

    In order to know voters better, I analyzed their Osmo balances. From their Osmo balance, We can find whales and normal users.

    • I filtered the wallets with above 50K Osmo as a whale. Only 0.07% of voters were whales and others were normal users. It seems most voters were normal users and didn’t have much experience in voting. We will know better in next sections.
    • The average Osmo per wallet is 158 $Osmo.
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    Why Governance is Important?

    • Governance offers the holders voting rights to the network and the result is a truly community-driven system that encourages active participation. Governance tokens are an incredibly important part of the crypto ecosystem and are set to become more prominent as things evolve and mature.
    • Summary ( From PROPOSER )

      • The Osmosis Grants Program ("OGP") was created a little over six months ago.
      • Check out our Q1 Retroactive Report to see all of the great work the OGP has funded to date.
      • This proposal aims to renew the OGP for an additional 12 months.
      • As the OGP is still well-funded, no additional funding for the program is being requested as part of this proposal.
      • Reverie will continue acting as the Program Lead, with support from seven reviewers who sit on the multi-sig.    
      • We propose a revised compensation structure for the Program Lead, Reverie, including $70,000 a month in USDC, and 35,000 OSMO a month.
      • As part of v2, the OGP will expand its scope through the incubation of new subDAOs and high-impact strategic initiatives. 
      • This document covers the OGP v2, and includes an FAQ at the bottom.

      Purpose 

      It's been six months since we posted our initial proposal for the Osmosis Grants Program. With this proposal, we seek to renew the OGP and continue funding community projects and initiatives that help Osmosis grow. 

      This document will cover the OGP's work to date, long-term program design, a detailed funding request, and what the

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    Source:

    Proposal 362 ( Osmosis Grants Program Renewal)

    Full Analysis

    Proposal Overview

    Proposal 362 Voters and Vote Option

    There are four options for Osmosis Proposal. Yes, No, Abstain, and No with Veto. Let’s Examine the hourly number of voters per their vote option.

    • After 10 Hours, The total hourly number of voters increased significantly, The total hourly number of voters increased from 200 voters to 2.2K.
    • Most Voters voted YES. Until November 15 at 14:00, most users recorded their votes.
    • Overall, About 18.9K voters voted YES, 1.6K unique voters voted NO, 1.1K voted Abstain and others voted No with Veto.


    In order to understand the voter activities, I drew a chart that shows the hourly share of voters per vote option.

    • Until November 16, Most votes were YES but after that, The hourly share of NO increased and reached from 5% up to 66%. Based on the previous chart, We know that in that time, The total hourly number of voters decreased below 100.
    • Also, Over time, The hourly share of Abstain vote increased too. The hourly share of Abstain was 1-2% but increased by 37%.
    • Overall, 84% of voters voted Yes, 7.4% voted NO, 5.1% voted Abstain and others voted No with Veto.

    You may know that each user or validator has a specific vote power. I drew some charts that show the voting power of voters per vote option. Almost shares and numbers were similar to voters. So You can only see the charts insted of reading!

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    Validators

    • It seems the highest number of voters were normal users and fewer validators participated in the voting. Only 0.5% of voters were validators and the other 99.5% were normal users. Most validators registered their votes during the first hours of voting.
    • One of the main question is whether Validators changed their vote or whales or normal users. As you have seen in the previous section, Only 0.5% of voters were validators. I examined their votes and found 26.6% of total validators changed their votes and 73.4% didn’t change.
    • Overall, Nearly 35% of validators voted YES. 30% No, 30% Abstain and 5% No with Veto.
    • A large number of voters had below 1 $Osmo in their wallets. Almost 65% of users which is 14.5K voters have below 1 $Osmo in their wallets. About 12.5% of voters, The second large group of users, have 1-10 $Osmo in their wallets. I can see that 13 voters have +500K Osmo.
    • Now it’s time to examine which types of voters changed their votes most. As you can see, The highest number of voters that changed their votes have below 10 $Osmo in their wallets. This group of voters voted Yes to the proposal. Only 2 whales changed their votes. 50% of whales voted YES, 21% Abstain and others No and No with Veto. I can conclude that most users that changed their votes were Normal users.

    THANK YOU FOR READING!

    ALL CODES AND CONTENTS WERE WRITTEN BY HESS.

    :bird: Twitter: @hessaminanloo

    :t-rex: Discord: hess#0890

    :calendar: Analyze Date: 2022/NOV/24