Introducing Optimistic Dual Governance, an efficient governance design using plugins on Aragon OSx. This governance design enables DAOs to create two different stakeholder groups with different governance permissions, and then implement proposals optimistically.
Plugins will undergo audits, but you can check the progress on the first implementation here.
In short, optimistic dual governance allows teams to work efficiently while allowing key stakeholders to veto proposals.
While any type of stakeholder group can be defined to meet your organization's needs, this dual governance design for the protocol's DAOs was created with these two groups in mind:
- Teams that are actively building a protocol or doing operational work: Such as the core team, guilds, developers, and any other active participants who make updates, parameter changes, and upgrades to the protocol itself.
- Main DAO members: Any arbitrarily defined group of stakeholders, which can be users, liquidity providers, stakeholders, investors, governance token holders, or another group that has an interest in protecting the protocol, but is not proactively involved in operations, development, or parameter changes.
Once you have identified your stakeholder groups, the next component of this design to understand is optimistic governance.
Optimistic governance is when proposals are passed as long as they are not objected to. Instead of standard token-based governance where proposals need to be voted on to pass, proposals in an optimistic governance structure pass automatically after a set period of time.
This means that teams can move faster and do not have to submit proposals through a traditional governance process, however, this creates an attack surface if proposal creation is open to any wallet. For example, if a master DAO allows a proposal to pass that misuses Treasury funds, there is no way to reverse implementation. So, it's safer for the DAO to have a defined group – in this case, a list of permitted addresses – that can be held accountable for proposals.
The design was largely inspired by teams that were exploring optimistic dual governance for their own DAOs, including Lido And Stacked Flip. the design By Jacob of Zora was also a great inspiration.
Here's how optimistic dual governance works in Aragon OSx from proposal to implementation:
- Create the proposal: Multisigs or subDAOs in the proposals allowed list can create proposals to the main DAO.
- Time lock period: During the time-lock period, key DAO members can veto the proposal.
- to implement: If the master DAO does not object to the proposal during the timelock, the proposal will be executed automatically.
Check out the architecture in the diagram below:
the Permissions management system At the heart of Aragon OSx, you can design optimistic and efficient dual management. It enables the master DAO to have separate permissions from those of child DAOs, but all DAOs are able to operate within the same management system.
This is the first iteration of this plugin. There are thousands of versions that can be created to suit your organization's needs.
For example, in a future release of this plugin, different types of proposals could have longer or shorter time locks. Minor updates can have a shorter time lock, so it's easier for teams to push small updates quickly, and important updates can have a longer time lock, giving key DAO members enough time to review them.
We can work with your team to build an iterative version of this governance design that fits your protocol. If you are interested in using optimistic dual governance, Inquire here.
“OSx is the Unix of Ethereum – a future-proof DAO framework for building DAOs that we can't even imagine today. Dual governance will play a key role in communities that need to iterate quickly while keeping valuable assets and rights in the hands of token holders.”
— Jordi, Core OSx developer
Separate stakeholder groups into active and passive roles
basic Token-based governance It puts all stakeholders into one homogeneous group with the same permissions. But in reality, stakeholders range from active, high-context participants in building the protocol to users and infrastructure providers who want protection, but are not actively involved.
This governance design allows you to separate stakeholder groups based on the role they have to play in managing the protocol. You can think of this as an active group of proposers and a passive group of objectors.
Many key stakeholders may not want to actively create proposals, especially those containing technology upgrades. However, they are Do We want to ensure that the proposals passed are secure and do not lead to misuse of funds, introduce vulnerabilities, or compromise the future of the protocol. Dividing stakeholder groups and giving them different permissions through Optimistic Dual Governance is the solution to this.
Efficient management of teams enables faster shipping
Optimistic implementation of proposals means implementing the teams' proposals as long as they are not objected to. This design enables teams to iterate quickly, which benefits the health of the protocol as a whole.
If voter apathy is a problem in the organization, teams will not be held back. They do not have to wait for proposals to get the votes required to pass, as they are automatically passed after the lock-in period. Teams also don't need to spend time working to move proposals through multiple stages of voting or approvals. Key DAO stakeholders still have final approval of proposals, but the policy and process have been significantly reduced.
Stakeholders in the main DAO retain control through a timelock and veto option
Passive role stakeholders—users, investors, liquidity providers, or others—do not need to actively vote to ensure that the protocol or product is maintained. However, they are still in control, because they can veto proposals that are not in line with the DAO.
This design gives token holders ultimate control over what happens to the protocol without having to actively participate in creating proposals. They can review proposals if they choose, but they do not need to exercise their voting rights unless something needs to be vetoed.
The option to have completely no-code governance
One possibility for this design is that both teams and the main DAO could be completely tokenless. For the main DAO, you simply need a permitted list of addresses that have permission to cast veto power. On the team side, you need a permitted list of addresses that have permission to create proposals.
Whether you use a pre-existing token or don't launch one at all, you can use this management design. There is no element in the design that requires you to mint a token.
Furthermore, these permissions can be customized and implemented in multiple ways, such as setting voting power or setting time locks.
You can find the first release of the Optimistic Dual Governance plugin herewhich will be subject to audits.
For more complex organizations, a variation of this design may be better suited, because it includes autonomy for sub-decentralized units (DAOs). Here's what it could look like: Multi-signatures would be independent DAO submodules, which could manage certain permissions themselves, such as the ability to add and remove new internal members. They can also have their own governance process, such as token voting.
Minimizing governance is a key goal of this governance design, and future iterations will focus on this concept more. By making the governance process seamless and secure, both stakeholders and team members do not need to spend a lot of time participating in governance.
We are looking for partners to explore the boundaries of this model and get feedback from more industry players. Inquire about using this governance design in your DAO or protocol by filling out the form above to let us know what you need!
We can't wait to see what you build.