Delegate Proposal - Abdullah, Arana Digital

Identity and Background

What is the delegate’s identity and background?

We are a governance group composed of ex-Michigan Blockchain members. Our team is currently made up of five individuals, all of which are deeply steeped in the crypto space and have multiple years of participation in protocol governance. 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.

Team Member Socials:

  • Abdullah Umar (@abdullahbumar on X)
  • Jay Chen (@0xJChen on X)
  • Parth Valecha (@FPLParana on X)
  • Alex Farfel (@farf0x on X)
  • Guangye Cao (guangyecao on LinkedIn)

Has the delegate historically contributed to the Jito Network?

Our team is intimately familiar with Solana as well as the dapps built on the chain. We haven’t partaken in Solana governance yet due to its immaturity, but this initiative will allow us to bring our Ethereum-based governance expertise to the chain. Three of our members have been staking their SOL with Jito for a large portion of 2023. We are also early users of protocols like Marinade and understand the inefficiencies behind “centralized” stake pools and how innovations like StakeNet are pivotal for enhancing liquid staking.

Has the delegate historically been involved in protocol governance?

Throughout our history with Michigan Blockchain, we have been active participants in multiple Ethereum-based DAOs, including Uniswap, Aave, Compound, Arbitrum, Stader, and Origin. During our tenure, we managed around $40M of voting power, given 2023 avg. prices. This distribution of protocols spanned our reach across DEXs, money markets, liquid staking protocols, stablecoins, and L2s. Below are some highlights for further context:

Uniswap: We sustained 100% voting participation in the DAO and passed the most proposals in 2023. A primary focus for us was taking Uniswap multi-chain–we steered the deployment of the DEX on Avalanche, Filecoin VM, Scroll, Base, Moonbeam, and Rootstock. Our governance lead is also a part of the Uniswap Deployment Accountability Committee. He is also a member of Uniswap’s first meta-governance program, where he actively votes on Arbitrum proposals on behalf of Uni DAO.

Aave: Over the past 6 months, we’ve voted on around 140 proposals with a 95% participation rate. Much of our time is spent on communications with risk assessors like Gauntlet to make informed decisions around introduction and depreciation of new markets, onboarding service providers like Certora for auditing, and treasury management with groups like Centrifuge. We also helped initiative programs to better delegates in general like enabling Gas Fee Rebate for On-Chain Votes and were admitted to the Aave Orbit program as a recognized delegate.

Our members are also active on social platforms and have written content pertaining to our governance work (see threads on X)

  • Politics of Governance
  • Curve Debacle
  • Impact of Licenses on Protocols
  • Superchain and Uniswap
  • Impact of Nomad Hack on Deployments

Is the delegate committed to helping the Jito Network and Solana succeed? Explain.

The Arana Digital team has many ties to the Solana ecosystem and is committed to its success. We consider ourselves to be Solana natives doing Ethereum governance and have been waiting for an opportunity like the one Jito presents. Through Michigan Blockchain, our members have consulted Solana University to build a prototype NFT marketplace to demonstrate to builders how to utilize typescript, rust, Solana native wallets and Metaplex’s NFT standards. We’ve also worked with Pyth on a proposal to Aave to be its secondary oracle as a failstop for Chainlink. This March, Michigan Blockchain’s investment team, led by an Arana Digital founder, will be the first DormDao team to pitch SPL tokens, pitching JitoSol and Pyth. Lastly, through the adjacent organization, Arana Ventures, our members have invested heavily into the Solana ecosystem. ~75% of the portfolio is in SOL and SPL tokens.

Candidate Views

How should JitoSOL validator delegation balance performance (yield) versus decentralization goals?

Generally speaking, the goal is to maximize performance while facilitating Solana’s road to decentralization. At the moment, Solana has a nakamoto coefficient of 21, down from 30 a year ago. Jito stakes with 116 validators, of which none are part of the super minority. This is a good start. However, decentralization also involves geographical and data center diversity. More than 33% of Solana’s stake weight is located in 4 cities and 3 data centers. Therefore, Jito should favor staking with validators that are not located in those 4 cities and do not utilize those 3 data centers.

Beyond these factors, Jito should prioritize performance by factoring uptime and yield. High performance during times of congestion and within the past 20 epochs should be weighted higher.

What should be the priorities for JTO liquidity mining and DAO token grants?

We believe JTO incentives should be distributed for two primary purposes: subsidizing voting fees for Jito validators & increasing JitoSOL adoption via ecosystem integrations.

  • One of the centralizing forces of Solana’s design is its voting fees, a fixed cost that enables economies of scale for larger validators. By reimbursing the voting fees using JTO to validators they’ve staked with, Jito will be able to help their smaller validators stay competitive. This promotes decentralization, rewards high performance and encourages validators to adopt the Jito client. A similar model can be used to bootstrap the keepers and stewards of the StakeNet.
  • For stakers, the yield between different LSTs isn’t substantially different, so a critical component for user adoption is how integrated an LST is with other dapps on Solana. The capital efficiency of LSTs can’t be realized unless the LST is adopted across money markets, DEXs, NFT marketplaces, etc. Blazestake is a good example of this as its DeFi integrations have enabled it to be the fastest growing liquid staking protocol on Solana. The north star of these integrations is to make JitoSOL as ubiquitous on Solana as SOL itself.

Token grants are also vital. These can be utilized for both research and organization initiatives. The DAO can fund committees to oversee crucial functions like treasury management and moderation of grant applications. JTO awards can be given to group conducting initiatives around MEV, governance tooling, and enhancing StakeNet algorithms.

What are your goals for the DAO as a delegate?

Our team’s experience with previous DAOs inclines us towards formalizing Jito governance in a way that ensures high stakeholder participation, increased conversation around critical topics, and effective protocol growth through treasury management. One aspect we’ve focused on historically is bringing together multiple stakeholders to carry out growth initiatives. For instance, over the past year, we’ve helped deploy Uniswap across six EVM chains to increase the protocol’s market share. Such initiatives required coordination between the target chain, proposal sponsors & researchers, front-end providers, bridges, and of course, other delegates.

With Jito, we aim to bring that same focus as a governance steward helping coordinate efforts among various stakeholders. An example of a proposal we may steward is collaborating with Lifinity to use their market making as a service program. This will distribute a portion of the JTO treasury to Lifinity pools–the most capital efficient on Solana–to establish a revenue stream for the DAO.

Much of our motivation for these initiatives is rooted in our belief that Jito governance will be a stepping stone for maturation of Solana governance. We have high conviction in the Solana ecosystem as a whole and want to use our experience to help set a strong precedent for all DAOs in the ecosystem.

Solana Delegation Address: J282KdfBKrXMFCrwA4uvnVKuLJPGJaH3svTACgYQGdQF

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