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Improving DAO to DAO Voting

from Dow Jones +/+ of Windranger

Prompt

Scope

We are looking for a product that enables DAOs with multi-asset treasuries to more easily and securely participate in governance (voting) of non-native DAOs for which they hold tokens.

Criteria

  • A comprehensive product that addresses issues in the document below.
  • Easily adopted by BitDAO and other DAOs with multi-asset treasuries.
  • Open to new development, or adopting/improving existing solutions.

Context

BitDAO holds several non-native tokens in their treasury (acquired through tokens swaps, etc.) and is seeking to actively participate in governance of the associated DAOs but lacks the tooling/process to do so.

Enabling governance participation is important to a healthy DAO ecosystem. Enabling DAOs to more actively participate with the tokens held in their treasuries is a meaningful step forward.

Issues and Perspectives

Note: The items below are not exclusive lists or the defined frameworks for the solution, however should be referenced as part of the overall research and solution design exercise prior to submission.

Voting System Selection

There is no best practice/industry standard on how DAOs should vote on other DAOs proposals. Plurality-Majority and Proportional Representation are common voting systems (read more). For DAO to DAO voting, does one of these options make the most sense to implement?

Example: DAO A holds 1m tokens of DAO B. A proposal for DAO B is live. DAO A conducts a snapshot vote to determine how their token holders would like to vote on DAO B’s proposal. DAO A token holders vote 60/40 in favor of the DAO B proposal (we’ll assume for the sake of this example that quorum is met). How should DAO A proceed? Option 1: DAO A votes with full weight (1m tokens) in favor of the proposal (Plurality-Majority) Option 2: DAO A casts 600k votes in favor and 400k votes not in favor of DAO B’s proposal (Proportional Representation)

Lack of tooling

No products are available that have streamlined the process of DAO-to-DAO voting. One-off solutions are not scalable nor practical.

Gnosis Safe

Gnosis Safe is the gold standard for Organizational Multi Sigs and DAO treasuries. As such, building as a Safe App or ensuring compatibility with Gnosis should be considered critical for adoption.

Explorations and Ideation

Current delegation is one-to-one - i.e. wallets entire holdings are delegated to a target address. Partial / array delegations are not supported.

(Potential Solution/Direction) Optimistic Operators

  1. External operator (neutral party) is designated and is required to post collateral
  2. Voting Address(es) are created and funds delegated to operator
  3. Operator votes inline with vote outcomes, otherwise collateral is slashed
  4. If Operator goes rogue, delegated funds can be recalled and delegated to new address(es)

Potential Challenges:

  • Voting systems of external protocols are not uniform and would potentially require bespoke integrations for each kind of DAO protocol

(Potential Solution/Direction) Oracle/Trigger-based Solution

  1. Non-native DAO tokens held in an isolated Treasury Smart Contract (likely Gnosis Safe)
  2. Treasury Smart Contract delegates voting power to a Voting Address
  3. Snapshot created to capture votes of token holders
  4. Result of vote, read by Oracle, and Trigger the Voting Address
  5. Could use reality.eth, SafeSnap (Gnosis)
  6. Voting Address casts vote on the external DAO proposal

Potential Challenge(s):

  • Verifiability of outcomes
  • Relying on an oracle results in some level of centralization

(Potential Solution/Direction) DAO Member Voting Contract

  1. Implement a contract that allows DAO members to mint a contract account that would allow them to withdraw their portion of the treasury to their personal voting contract account
  2. DAO members then vote using those tokens. The contract account would have defined rules where the tokens could only be transferred back into the original treasury, and would also give token holders permission to recall the delegated tokens back into the treasury with a token holder vote.

Potential Challenge(s):

  • High gas costs as proposed solution would require creation of contracts and transfers for each voter