Voting and decision-making tools

DAO voting and decision-making tools can be grouped into two main categories: (1) on-chain voting and execution, and (2) off-chain voting and signalling.

On-chain voting means that votes are cast and recorded directly on a blockchain, and the outcome of the vote is automatically executed using a smart contract (an example of this is the Governor module used by the Tally platform). Most people would associate DAO voting with this concept of on-chain voting and execution. However, DAOs also use off-chain voting tools, which are effectively a form of polling software for DAO members. This is known as signal voting since it is a way to signal the will of the DAO community without automatically executing an action. Snapshot is currently the most popular platform for this.

Most DAOs use a combination of the two voting types and tools – off-chain signal voting in the beginning stages to refine a proposal and on-chain execution voting when the proposal details are finalised and ready for a binding vote. In addition, DAO communication tools like Discord, Telegram and Discourse are important pieces in the decision-making toolkit as ideas need to be shared and scrutinised throughout this process. Another reason why DAOs have moved towards off-chain voting is to save on the gas costs of running on-chain votes. There are now tools that run a vote off-chain and are still able to automatically execute the community’s decision by connecting a smart contract to an oracle of the off-chain vote outcome (examples of this are Gnosis Safe’s SafeSnap and Zodiac Reality tools).

Deciding how to make decisions

It can be difficult to decide between the different options for DAO decision-making and execution. Should you use off-chain signal voting and rely on a multisig controlled by trusted DAO core members to execute community decisions? Or should you try a trustless process that either executes via an oracle of an off-chain vote, or entirely on-chain via smart contract? Perhaps some combination of the above? We will outline these options in turn.

The simplest decision-making set-up is to employ off-chain signal voting and entrust core DAO members to execute the decision. This usually involves the use of a multisig wallet so that multiple members must approve transactions from the DAO treasury, which enhances funds security. Gnosis Safe is the most popular DAO treasury funds management tool based around multisig wallets. As mentioned, the decisions themselves are often made in DAO communication channels (e.g. Discord, Telegram, Discourse, etc.) or on a specialised off-chain voting platform (e.g. Snapshot). There is a social expectation that the multisig controllers will faithfully execute token holder votes, which is usually suitable for smaller or lower-stakes DAO projects that are less concerned about legal liability or fiduciary responsibilities (e.g. decisions not involving spending of funds).

Snapshot

Snapshot is a free, open-source voting tool and platform for decentralised community governance. It is widely used by DAOs to govern themselves in an organised way, using an off-chain proposing and voting framework. Moreover, proposals can be created and voted on for free since data is stored off-chain. This makes decision-making more affordable and accessible. Users can sign-in and verify DAO membership with their wallets (using an ENS identity) and cast token-weighted votes under a variety of voting systems (e.g. single-choice, rank-choice, multi-choice approval, multi-choice weighted, and quadratic voting). Proposals can specify a block number cut-off point to qualify which members are eligible to vote (i.e., to prevent gaming of the vote by purchasing new tokens or spreading tokens across multiple wallets), set voting window start and end dates, and notify the DAO community when voting goes live.

Building security into DAO governance

Off-chain signal voting and multisigs rely on trusted core members to faithfully carry out the outcomes decided by the DAO community. Another layer of security can be built into DAO governance by requiring that any transaction from a DAO treasury must have been passed by the community through signal voting before being executed. Gnosis SafeSnap is a plugin that enables exactly this – Snapshot first records community opinion on a proposal, which is then registered as an event on the Reality.eth oracle and reported to Gnosis Safe for on-chain execution. Multisig controllers cannot execute a transaction unless it has already been reported to the oracle. Gnosis has also released the Zodiac DAO tooling collection, including the Reality module, a framework-agnostic version of SafeSnap. This allows on-chain execution based on any off-chain event that can be reported to the Reality.eth oracle (e.g. Discord polls not just Snapshot votes).

Connecting off-chain voting with on-chain execution

Tools that connect off-chain voting to on-chain execution bring accessible, secure, and largely decentralised governance to DAOs. They offer a clever solution to the trade-off between the costs of decentralised voting (i.e., operation cost) and centralised execution (i.e., expropriation cost) using oracles. However, arguably these solutions sacrifice some measure of decentralisation compared to fully on-chain voting and execution. Many projects make a different trade-off by choosing to incur greater governance costs in exchange for greater decentralisation. Comprehensive DAO frameworks like Aragon, Colony, DAOstack, and DAOhaus provide front-end UI for plug-and-play smart contracts that automatically execute votes on-chain. For example, Aragon has both its Voice module for gasless signal voting and Vocdoni module for secure execution voting.

DIY toolkits

Several major DAOs were not built on bundled DAO frameworks like Aragon but instead developed their own tools from scratch or by forking open-source code repositories. Another option is to build a DAO toolkit yourself, for instance by taking voting tools from one place and other tooling from elsewhere. Currently the most prominent and widely adopted single-purpose tool for on-chain voting is the Governor smart contract template. Governor was first developed by the Defi protocol Compound Finance and released as open-source software; it has since been standardised and incorporated into several voting platforms (e.g. Tally) or directly into DAOs themselves (i.e., via their own UI calling on an API of the smart contract).

Compound Governor

Compound Governor deploys a delegation-based token voting model. Users must either delegate their voting power to a third party or self-delegate if they wish to participate in voting themselves. This means that DAO members can transfer voting power to ‘advocates’ who are informed about a particular proposal (lowering the cost of participating in governance, albeit indirectly) while still holding control of their underlying token assets (which define their membership in the DAO, after all). Vote delegation is fluid and can be withdrawn at any time or redirected to delegates on a vote-by-vote basis. It also allows smaller token holders to aggregate their voting power to influence decision-making.

The Governor smart contract covers all aspects of the on-chain DAO decision-making process – from managing a proposal and keeping track of its status, delegating voting power and counting votes, to automatically executing passed proposals on-chain. Proposals are not limited to transactions from a DAO treasury, and can include anything else that’s on-chain like minting NFTs, modifying a DeFi protocol or product, or even changing a DAO’s rules for on-chain governance (e.g. the code of Governor itself).

DAO governance aggregators

A new variety of DAO decision-making tooling that has become increasingly popular is the DAO governance aggregator, allowing users to track and participate in on-chain governance across differ DAOs they may be members of. These platforms aggregate relevant information from compatible DAOs (both historical and real-time data e.g. on-chain votes, upcoming proposals, treasury statistics, etc.), provide a common interface so that users can keep track of them at once, and integrate back into their on-chain governance protocols to make participation easier. For example, Tally is a DAO operations platform, governance dashboard, and portal for participating in Governor DAOs (probably the most widely used instance of the smart contract).

Boardroom

Boardroom is another DAO governance platform providing multi-DAO aggregation; although it is framework agnostic in the sense that it’s capable of integrating with DAOs using other frameworks than the Governor contract (i.e., its API standardises common actions like voting and delegation). Boardroom is also relatively more focused on education and analytics, providing aggregated ecosystem level data on DAO treasuries and governance activity.

Messari Governor

Messari Governor is yet another platform for DAO governance and analytics, providing a real-time and detailed picture of the governance process from initial forum discussion to eventual on-chain execution. It is also framework and protocol-agnostic, with new frameworks and communities continually being integrated to the platform (currently over 800 DAOs are listed). Each DAO listing contains an overview of the DAO, its structure, governance process, and tooling, as well as a register of past and upcoming proposals. Like with Tally and Boardroom, users can connect their cryptocurrency wallets and participate in DAO governance via the platform.