DAO Governance Explained
Participate in decentralized decision-making and voting
What is a DAO?
A Decentralized Autonomous Organization (DAO) is an organization governed by smart contracts and community voting, with no central authority. Members hold governance tokens that give them voting power over proposals, budgets, and strategic decisions.
💡 The Simple Explanation
Think of a DAO as a digital co-op where every member has a voice. Instead of a CEO making decisions, the community votes on everything—from how to spend treasury funds to which features to build. The rules are encoded in transparent smart contracts that execute automatically.
The DAO Landscape
🌍 Four Major DAO Categories
Not all DAOs are created equal. Since the first major DAO launched in 2016 (famously hacked for $60M), the ecosystem has evolved into four distinct categories, each optimized for different use cases: Protocol DAOs govern DeFi infrastructure, Investment DAOs pool capital for collective investing, Social DAOs build communities, and Collector DAOs acquire NFTs and art.
Why Categories Matter: Each DAO type faces unique governance challenges. Protocol DAOs need technical expertise for smart contract upgrades. Investment DAOs require fast decision-making for time-sensitive opportunities. Social DAOs prioritize inclusivity over plutocracy. Collector DAOs balance taste-making with treasury management.
🏛️ Protocol DAOs: Governing DeFi Infrastructure
Protocol DAOs control DeFi protocols with billions in TVL. Token holders vote on critical parameters (interest rates, collateral ratios, fee structures) and protocol upgrades. These are the most financially consequential DAOs.
$UNI holders govern: Fee switches (protocol revenue), liquidity mining rewards, grant distributions, partnership integrations.
$AAVE holders govern: Asset listings, interest rate models, risk parameters, Aave V3 deployment across chains.
$MKR holders govern: DAI stability fee, collateral types, liquidation ratios, Real World Assets (RWA) onboarding.
- Technical expertise required: Voters must understand smart contract security, economic mechanisms
- Low participation: Typically 5-15% of tokens vote (most holders = passive speculators, not governors)
- Plutocracy risk: VCs and whales control 30-50% of tokens, can unilaterally pass proposals
- Slow decision-making: Proposals take 7-14 days (timelock delays), too slow for market crises
💼 Investment DAOs: Collective Capital Allocation
Investment DAOs are on-chain investment funds where members pool capital and vote on investment decisions. Originated as "LAOs" (Limited Liability DAOs) to provide legal wrapper for accredited investors.
First legal DAO: Delaware LLC wrapper. 100 members, $25M+ deployed into 50+ projects. Focus: early-stage DeFi/NFT startups. Average check: $50K-250K.
Grants → VC pivot: Started as grants DAO, evolved to $4M fund. Invested in Radicle, Zapper, Gelato. Focus: infrastructure and tooling.
Investment DAOs typically use multisig + member voting hybrid: Investment committee (5-7 members) can deploy capital quickly, but major decisions (fund size, strategy pivots) require full member vote. This balances speed with democracy.
- Due diligence: Members submit investment theses, community debates 7-14 days
- Voting threshold: Usually 50%+ quorum, 60%+ approval to deploy capital
- Portfolio management: Quarterly reviews, mark-to-market valuations
- Exit strategy: Token sales/liquidity events require governance approval
👥 Social DAOs: Community Ownership & Membership
Social DAOs are tokenized communities where membership = token ownership. Unlike Protocol DAOs (govern code) or Investment DAOs (deploy capital), Social DAOs govern culture, events, and access.
Premium social club: Requires 75 $FWB tokens (~$5K) to join. 10K+ members globally. Members vote on events, partnerships, treasury spending. Hosted 100+ IRL events in 2024.
Media & education DAO: 5K+ active contributors. Produces podcasts, newsletters, educational content. $BANK token for governance + contributor rewards. Revenue-sharing model.
Social DAOs start centralized (founders curate culture) and gradually decentralize. FWB's journey: 100 members (founders invite) → 1K members (application + vote) → 10K members (buy token, auto-approval). At scale, subDAOs (FWB Tokyo, FWB London) govern locally.
- Membership criteria: Token gating (own X tokens) vs application (community vets newcomers)
- Content moderation: Who decides what content/behavior is acceptable? Votes or admins?
- Treasury allocation: Events, creator grants, operational costs (Discord, tools)
🎨 Collector DAOs: Shared Ownership of Rare Assets
Collector DAOs pool funds to acquire high-value NFTs and art that individuals can't afford alone. Members govern acquisitions, exhibition strategy, and eventual sales. Part investment fund, part cultural institution.
Iconic acquisitions: Bought Doge NFT ($4M), Wu-Tang Clan's "Once Upon a Time in Shaolin" ($4M), Edward Snowden NFT ($5.5M). 74 members, each owns fractional share.
Blue-chip NFTs: CryptoPunks, Art Blocks, XCOPY. 100 members pooled $10M. Focus: early NFT artists + generative art. Holds 1,000+ NFTs, curated museum-quality collection.
Collector DAOs face unique challenge: balancing artistic curation (subjective taste) with financial returns. Should you buy because it's beautiful or because it'll 10x? Often use curator committees (3-5 art experts) who propose acquisitions, then full DAO votes.
- Acquisition process: Curator proposes piece + thesis → 48hr debate → snapshot vote
- Exhibition strategy: Loan to museums? Fractionalize and sell shares? Keep private?
- Exit strategy: Hold forever (museum model) vs flip for profit (investment model)
- Custody: Who physically holds the NFT? Usually multi-sig wallet with 5-of-9 threshold
📊 DAO Landscape by Numbers (2024-25)
| DAO Type | Active DAOs | Total Treasury | Avg Members | Governance Token |
|---|---|---|---|---|
| Protocol | ~100 | $20B+ | 50K-500K | Governance only |
| Investment | ~200 | $500M+ | 20-100 | Shares + voting |
| Social | ~1,000+ | $100M+ | 100-10K | Membership + governance |
| Collector | ~150 | $200M+ | 10-100 | Fractional ownership |
Source: DeepDAO, Snapshot (Q4 2024 data)
🎯 Choosing the Right DAO Type
Protocol DAO - Decentralize control to align users and builders. Use governance token for voting on upgrades, parameters, treasury.
Investment DAO - Pool capital with like-minded investors. Hybrid governance (committee + member votes) balances speed with democracy.
Social DAO - Tokenize membership to align incentives. Start centralized (curate culture), gradually decentralize as community matures.
Collector DAO - Acquire high-value NFTs/art together. Use curator committee for taste-making, full DAO for major decisions.
1. Types of DAOs
🏛️ Interactive: Explore DAO Categories
Protocol DAO
Examples: Uniswap, Aave, Compound
Governs DeFi protocols and smart contract upgrades
Token Distribution: Power Allocation
⚖️ Distribution = Governance Power
How you distribute governance tokens determines who controls the DAO. Give founders 60%? They have veto power. Give community 80%? True decentralization—but risk slow, chaotic governance. Token distribution is the foundational political act of DAO creation.
The Triad: Most DAOs split tokens among three stakeholders: Founders/Team (builders who created the project), Community (users, contributors, early supporters), and Treasury (DAO-controlled funds for future growth). Balancing these allocations is art + science.
📊 Common Distribution Models
Distribution: Founders 40%, Community 40%, Treasury 20%
Philosophy: Founders retain significant control during early stage. Can move fast, make decisive calls. Used by protocol DAOs in growth phase.
- Fast decision-making
- Aligned founder incentives
- Clear leadership
- Centralization risk
- Community feels disenfranchised
- "DAO theater" criticism
Distribution: Founders 20%, Community 60%, Treasury 20%
Philosophy: Community has majority but not supermajority. Founders + Treasury = 40% (can block harmful proposals). Used by Uniswap, Compound.
- Credible decentralization
- Strong community voice
- Founders can't unilaterally decide
- Slower governance
- Voter apathy (low turnout)
- Coordination challenges
Distribution: Founders 10%, Community 70%, Treasury 20%
Philosophy: Radical decentralization from day one. Founders are facilitators, not rulers. Used by social DAOs and community projects.
- Maximum decentralization
- Strong community ownership
- Regulatory clarity (founders don't control)
- Chaotic early governance
- Founder misalignment risk
- Difficult to coordinate
🏛️ Real-World DAO Distributions
| DAO | Total Supply | Team | Community | Treasury | Model |
|---|---|---|---|---|---|
| Uniswap | 1B UNI | 21.5% | 43% | 35.5% | Balanced |
| Compound | 10M COMP | 24% | 52% | 24% | Balanced |
| ENS | 100M ENS | 25% | 25% | 50% | Treasury-Heavy |
| Gitcoin | 100M GTC | 15% | 50% | 35% | Community-First |
| FWB | 10M FWB | 5% | 70% | 25% | Progressive |
Note: "Community" includes airdrops, liquidity mining, contributor rewards
⏰ Vesting Schedules: Time-Locking Power
Simply allocating tokens isn't enough—you need vesting schedules to prevent founders/investors from dumping tokens immediately. Vesting = tokens unlock gradually over time (typically 2-4 years with 6-12 month cliff).
- Total allocation: 20-40% of supply
- Cliff: 1 year (0% unlock until year 1)
- Vesting period: 4 years linear
- Example: 20% allocation = 5% per year for 4 years after 1-year cliff
- Total allocation: 10-20% of supply
- Cliff: 6-12 months
- Vesting period: 2-3 years
- Lock-up: Additional 6-12 months after TGE
ConstitutionDAO ($PEOPLE) raised $47M to buy U.S. Constitution copy (Nov 2021). After losing auction, founders had no vesting on their tokens. Some dumped immediately, crashing token -40%. Community lost trust. Lesson: Always vest founder/team tokens.
💡 Distribution Strategy Playbook
Founders control: 50-60% (includes team + treasury). Need to move fast, ship features, build credibility. Not yet truly decentralized.
Progressive decentralization: Airdrop to users (10-20%), liquidity mining (10-20%), contributor grants (5-10%). Founders now control ~30-40%.
Full decentralization: Community controls 60-70%, founders 10-20% (fully vested), treasury 15-25%. DAO is self-sustaining.
🎯 Key Design Principles
- Avoid supermajorities: If founders/VCs control 51%+, it's not a DAO—it's a company with governance theater
- Reward contributors: Reserve 20-40% for future contributors, liquidity providers, active community members
- Treasury = optionality: 20-30% in treasury provides runway for grants, partnerships, operational costs without asking community for ETH
- Vesting is mandatory: All team/investor tokens must vest over 2-4 years. No exceptions.
- Iterate and adjust: Can't get distribution perfect day one. Use governance to adjust allocations over time (ENS moved 10M tokens from treasury to community via vote)
2. Token Distribution
🪙 Interactive: Design Token Economics
Governance Proposals: The Lifeblood of DAOs
📜 From Idea to Implementation
In traditional companies, executives make decisions unilaterally. In DAOs, every significant decision requires a governance proposal—a formal, transparent process where token holders vote on changes. Want to spend $1M from treasury? Proposal. Want to upgrade smart contracts? Proposal. Want to change fee structure? Proposal. This process is both DAO's strength (transparency, legitimacy) and weakness (slow, coordination-heavy).
🔄 The Proposal Lifecycle (5 Stages)
What Happens: Author posts rough idea on Discord/Discourse forum. Community debates, asks questions, suggests improvements. Sentiment polls gauge interest (Snapshot off-chain votes).
Example: "Should we deploy on Polygon?" → 200+ Discord messages, 3 forum threads, 65% support on sentiment poll → Author refines to include cost analysis + technical feasibility
What Happens: After gauging support, author submits official proposal to Governor contract. Requires minimum token threshold (anti-spam measure). Transaction costs $100-500 in gas fees.
Token Thresholds: Compound (1% supply = 1M COMP = ~$65M), Uniswap (0.25% = 2.5M UNI = ~$15M), Gitcoin (0.5% = 500K GTC = ~$250K). High barriers filter noise, but exclude smaller voices.
What Happens: Proposal goes to token holder vote. Voting power determined at snapshot block (can't buy tokens mid-vote). Need quorum (4-10% participation) AND majority (50-60%+ approval) to pass.
Reality Check: Only 5-15% of token holders typically vote. Whales + delegates control outcomes. Most proposals fail to reach quorum (never execute, even if unanimous).
What Happens: Even if proposal passes, there's mandatory delay before execution. Gives community time to exit if they disagree with outcome (vote with feet). Prevents surprise rug pulls.
Historical Example: Compound Proposal 62 (2021) accidentally gave users ability to claim excess COMP tokens ($160M at risk). Passed vote, but community spotted bug during timelock. Rushed counter-proposal saved protocol.
What Happens: After timelock expires, proposal auto-executes via smart contract (if on-chain). For off-chain proposals (Snapshot), multisig manually implements the changes.
Disconnect Risk: Snapshot votes (80%+ of DAO proposals) are non-binding. Multisig could theoretically ignore results. Requires trust in execution layer.
📋 Proposal Quality Framework
Not all proposals are created equal. 90% of proposals are low-quality or incomplete, wasting community time. Here's what separates good proposals from garbage:
- Clear objective: "Deploy protocol on Arbitrum to reduce gas fees by 90%"
- Detailed implementation plan: Timeline, milestones, technical requirements, team responsible
- Budget justification: Itemized costs ($50K audit + $20K deployment + $30K liquidity incentives)
- Success metrics: "Achieve 1K daily users + $5M TVL within 3 months"
- Risk analysis: "Bridge security risk (mitigated by Chainlink CCIP) + liquidity fragmentation"
- Community support: 70%+ sentiment poll + endorsed by 3+ delegates
- Vague objective: "Make the protocol better" (better how?)
- No implementation plan: "We'll figure it out later" (community won't approve)
- Unrealistic budget: "$10M for marketing" (no itemization or ROI projection)
- No success metrics: "We think this will work" (how will you measure?)
- Ignores risks: Doesn't mention potential downsides or failure modes
- Zero community engagement: Submitted without prior discussion (instant rejection)
Most successful DAOs provide standardized templates (e.g., Uniswap's RFCs, Compound's CAIPs, Aave's AIPs). These force authors to address all key sections: Summary, Motivation, Specification, Rationale, Implementation, Security Considerations, Budget. Use the template = 3x higher pass rate.
📊 Proposal Success Rates (Reality Check)
| DAO | Total Proposals | Passed | Success Rate | Avg Quorum |
|---|---|---|---|---|
| Uniswap | 25 | 12 | 48% | 6.2% |
| Compound | 140+ | 80 | 57% | 8.1% |
| Aave | 200+ | 150 | 75% | 4.3% |
| ENS | 45 | 18 | 40% | 3.7% |
| Gitcoin | 100+ | 65 | 65% | 5.8% |
Key Insight: Only 40-75% of proposals pass. Main failure reasons: Failed to reach quorum (30%), rejected by community vote (50%), withdrawn by author after negative feedback (20%). Socialization before submission is critical.
⚠️ Famous Failed Proposals (Case Studies)
Proposal: Extend Business Source License (BSL) on Uniswap V3 code for another 2 years (prevent forks from competing)
Outcome: 45.3% FOR / 54.7% AGAINST (15.2M UNI voted)
Why Failed: Community opposed anti-competitive licensing. Wanted open-source ethos. Delegates like a16z voted against despite being Uniswap investors (showed principled governance).
Situation: USDC de-pegged to $0.88 (Silicon Valley Bank crisis, March 2023). MakerDAO's PSM held $3.1B USDC backing DAI.
Problem: Emergency proposal needed 4+ days to pass governance (discussion → vote → timelock). Crisis was NOW.
Lesson: On-chain governance too slow for emergencies. MakerDAO created Emergency Response Multisig post-crisis (can act in <12 hours, ratified by governance later).
Proposal: Move 10M ENS tokens ($100M+) from DAO treasury to community working groups (Ecosystem, Public Goods, Meta-Governance, Community)
Outcome: 89% FOR (strong consensus, 12M ENS voted)
Why Succeeded: 2+ months of community discussion, clear budget breakdown, working group charters, quarterly reporting requirements. Textbook proposal execution.
🎯 Best Practices for Proposers
- Socialize first: Spend 2-4 weeks in Discord/forums before formal submission. Gauge sentiment, refine idea, build coalition
- Get delegate support: Top 5-10 delegates control 30-50% of votes. DM them directly, explain proposal, answer concerns
- Use data, not emotion: "This will increase TVL 30%" > "I think this is cool." Back claims with analysis
- Start small: Request $50K pilot before $1M program. Build trust through execution
- Accept feedback gracefully: If community says "no," don't rage-quit. Listen, iterate, resubmit improved version
- Post-mortem everything: Whether proposal passes or fails, share learnings publicly. Builds institutional knowledge
3. Create a Proposal
📝 Interactive: Submit Your Proposal
Active Proposals (2)
Upgrade Smart Contract
Budget: $25,000
Marketing Campaign
Budget: $15,000
Voting Mechanisms: Democracy's Design Space
🗳️ One Vote ≠ One Vote
In traditional democracies, voting is (theoretically) one person = one vote. In DAOs, there's no such consensus. Different voting mechanisms optimize for different values: Capital efficiency (plutocracy), Sybil resistance (preventing fake identities), Long-term alignment (rewarding patience), or Security (preventing attacks). There is no perfect system—each makes tradeoffs.
🔵 Token-Based Voting (1 Token = 1 Vote)
How It Works: Your voting power = number of governance tokens you hold. Hold 10,000 UNI? You get 10,000 votes. Hold 1 UNI? You get 1 vote. Simple, transparent, capital-weighted. Used by 80%+ of DAOs (Uniswap, Compound, Aave, ENS, MakerDAO).
- Skin in the game: Largest token holders have most to lose from bad decisions (aligned incentives)
- Sybil-resistant: Expensive to game (acquiring 51% of major DAO = $100M-1B+)
- Simple & transparent: Anyone can verify voting power on Etherscan
- Liquid: Can buy tokens → instant voting power (no waiting period)
- Tested at scale: Billions of dollars secured, 5+ years of battle-testing
- Plutocracy: Whales dominate (top 10 holders = 30-60% voting power in most DAOs)
- VC control: Early investors hold disproportionate power (a16z controls 15M+ UNI = $90M+)
- Voter apathy: Small holders rationally don't vote (1 token = irrelevant influence)
- Flash loan attacks: Can borrow massive tokens, vote, return in one tx (mitigated by snapshot)
- Short-term bias: Traders vote for short-term token price, not long-term protocol health
Total supply: 10M COMP • Top holder: a16z (750K COMP = 7.5% supply = $49M) • Top 10 holders: 40%+ voting power • Top 100 holders: 80%+ voting power • Bottom 90% of holders: <5% voting power • Effective oligarchy with democratic theater.
🟣 Quadratic Voting (Cost = Votes²)
How It Works: Cost to cast votes increases quadratically. Want 10 votes? Costs 100 tokens. Want 100 votes? Costs 10,000 tokens. Formula: cost = votes². Reduces whale influence—billionaire can't just buy 1M votes linearly. Pioneered by Gitcoin for grant allocation ($50M+ distributed using QV).
1,000 tokens → 1,000 votes
10,000 tokens → 10,000 votes
10x tokens = 10x power
1,000 tokens → ~32 votes
10,000 tokens → 100 votes
10x tokens = 3x power only
To get 1,000 votes:
Linear: 1,000 tokens
Quadratic: 1,000,000 tokens
1,000x more expensive!
- Reduces plutocracy (whales have power, but not disproportionate)
- Incentivizes broad support over narrow whale backing
- Small holders feel votes matter (your 10 votes ≈ whale's 100)
- Optimizes for preference intensity (care deeply? Buy more votes)
- Sybil attacks (split tokens across 1,000 wallets → linear voting again)
- Requires identity verification (KYC = privacy loss, centralization)
- Complex UX (users don't intuitively understand squared costs)
- Low adoption (only Gitcoin + small DAOs use it at scale)
Gitcoin uses quadratic funding (QV variant) to allocate grants to public goods. Round 15 (2022): $1M matching pool distributed across 1,500+ projects. Project with 100 contributors @ $10 each gets more matching than project with 1 whale @ $1,000. Optimizes for community support, not capital. Result: $50M+ allocated to Ethereum public goods since 2019.
🟢 Conviction Voting (Time-Weighted Staking)
How It Works: Your voting power accumulates over time the longer you stake tokens on a proposal. Stake 100 tokens for 30 days? 3,000 "conviction points." Stake 100 tokens for 1 day? Only 100 points. Formula: conviction = tokens × time. Rewards long-term holders, punishes speculators. Used by Gardens protocol & 1Hive.
Tokens: 10,000
Days staked: 1
Conviction: 10,000
Tokens: 1,000
Days staked: 30
Conviction: 30,000
Tokens: 100
Days staked: 365
Conviction: 36,500
- Aligns with long-term protocol health (patient capital governs)
- Prevents flash loan attacks (can't accumulate conviction in 1 block)
- Continuous voting (no discrete periods = always responsive)
- Anti-plutocracy (small long-term holder > big speculator)
- Illiquid (tokens locked while voting = opportunity cost)
- Complex UX (users don't understand time-weighting intuitively)
- Slow to react (emergency decisions need fast votes, not 30-day stake)
- Favors incumbents (early holders have massive conviction advantage)
1Hive ($HNY token) uses conviction voting for continuous funding. Any community member can submit proposal for treasury funds. Proposals pass when they accumulate enough conviction (threshold = % of request relative to treasury). Small asks ($1K) pass in days. Large asks ($100K) require weeks of conviction. Result: Decentralized, continuous resource allocation without discrete voting periods.
🟡 Multisig Governance (M-of-N Signatures)
How It Works: A small group of trusted signers (5-15 people) control a multisig wallet. To execute action, need M signatures (e.g., 4-of-7, 6-of-9). Most secure mechanism against attacks, fastest execution. Used by 90%+ of DAOs for critical operations (treasury management, smart contract upgrades, emergency responses). Not truly decentralized—more like board of directors.
Lower security
Fast decisions
Small teams
Balanced
Most common
Medium security
High security
Slower execution
Large treasuries
Very high security
Very slow
Critical operations
- Maximum security (no flash loan attacks, no whale manipulation)
- Fast execution (hours to sign, not weeks to vote)
- Flexible (can respond to emergencies without governance delays)
- Battle-tested (Gnosis Safe holds $50B+ across DAOs)
- Centralization (7 people ≠ thousands of token holders)
- Trust assumptions (signers could collude, go rogue)
- Single point of failure (what if 3+ signers lose keys?)
- Opacity (signers can act off-chain, limited transparency)
| DAO | Config | Signers | Assets Secured |
|---|---|---|---|
| Uniswap | 4-of-6 | a16z, Paradigm, Variant, ScopeLift, Gauntlet, Penn Blockchain | $1B+ |
| ENS | 4-of-7 | Nick Johnson, Brantly Millegan, + community members | $500M+ |
| Lido | 5-of-9 | Paradigm, Dragonfly, Semantic, + core contributors | $15B+ staked |
⚖️ Mechanism Comparison: The Tradeoffs
| Mechanism | Decentralization | Security | Speed | UX Complexity | Adoption |
|---|---|---|---|---|---|
| Token-Based | Medium | Medium | Slow | Simple | Very High |
| Quadratic | High | High* | Slow | Complex | Low |
| Conviction | High | High | Medium | Complex | Very Low |
| Multisig | Low | Very High | Fast | Simple | Very High |
* Quadratic voting security assumes identity verification (otherwise Sybil-vulnerable)
🎯 Hybrid Models: The Future of DAO Governance
Most successful DAOs don't use one mechanism—they combine multiple systems for different decision types. Layered governance = security + speed + legitimacy.
- Optimism's Bicameral System: Token House (token voting) + Citizens' House (one-person-one-vote via soulbound NFTs). Both must approve major decisions.
- Compound's Autonomous Proposals: Small parameter changes (5-10% adjustments) auto-execute via governance bot. Large changes (new markets, upgrades) require full governance vote.
- MakerDAO's Emergency Multisig: Normal operations = token voting. Emergency (de-pegging event) = 4-of-7 multisig can act immediately, ratified by governance post-crisis.
- Gitcoin's QV + Delegation: Quadratic voting for grant allocation (broad input) + delegated token voting for protocol upgrades (efficiency).
4. Voting Mechanisms
⚖️ Interactive: Compare Voting Systems
Token-Based Voting
Security: Medium
1 token = 1 vote. Simple but favors large holders.
Live Voting: Where Governance Happens
🗳️ The Voting Process: On-Chain vs Off-Chain
When it's time to vote, you have two paths: On-chain voting (transactions recorded on Ethereum mainnet, costs gas, immutable, auto-executes) or Off-chain voting (signatures stored on IPFS/Arweave, free, requires manual execution). 80%+ of DAO votes happen off-chain (Snapshot) because gas costs kill participation—nobody wants to pay $20 to vote on a forum rule change.
⛓️ On-Chain Voting (Governor Contracts)
How It Works: Cast vote by submitting transaction to Governor contract (OpenZeppelin standard). Transaction calls castVote(proposalId, support). Vote recorded forever on blockchain. If proposal passes + timelock expires → auto-executes via smart contract.
- 100% transparent (anyone can verify on Etherscan)
- Automatic execution (no trust in multisig to implement)
- Immutable record (can't change votes retroactively)
- Composable (other contracts can read governance state)
- Expensive ($5-50 per vote during congestion)
- Low participation (only 1-3% of holders vote)
- Slow (subject to blockchain finality, 12+ blocks)
- Whale-dominated (small holders can't afford gas)
📸 Off-Chain Voting (Snapshot)
How It Works: Sign message with wallet (no transaction, no gas cost). Signature + vote stored on IPFS. Voting power determined at past block number ("snapshot" block). After vote passes, multisig manually executes result on-chain.
- Free voting (10-30x higher participation)
- Fast (instant signature, no blockchain wait)
- Inclusive (even 1-token holders can vote)
- Flexible voting strategies (multiple mechanisms)
- Non-binding (multisig could theoretically ignore results)
- Manual execution (disconnect between vote & implementation)
- Centralization risk (relies on Snapshot infrastructure)
- Less composable (external contracts can't read results)
⚠️ The Voter Participation Crisis
Here's the uncomfortable truth: Only 5-15% of governance token holders actively vote. Most DAOs have lower voter turnout than U.S. presidential elections (60%). This creates legitimacy questions: If only 10% vote, does that represent "community consensus"? Or just organized minority?
Total UNI: 1B tokens
Avg votes: 40M-80M (4-8%)
Quorum: 40M (4%)
Total COMP: 10M tokens
Avg votes: 800K-1.2M (8-12%)
Quorum: 400K (4%)
Total ENS: 100M tokens
Avg votes: 3M-5M (3-5%)
Quorum: 1M (1%)
Why Don't People Vote? (The 5 Reasons)
💡 Incentivization Strategies: Getting People to Vote
If apathy is the problem, can we incentivize participation? Maybe—but carefully. Vote-to-earn sounds great until mercenary voters show up who don't understand proposals but vote for rewards. Quality > quantity.
📊 Participation Benchmarks: What's Healthy?
| Participation Rate | Status | Implications | Action Needed |
|---|---|---|---|
| 15%+ of supply | Healthy | Strong legitimacy, active community, engaged stakeholders | Maintain momentum, reward participants |
| 10-15% of supply | Concerning | Workable but questions of representation arise | Improve communication, simplify proposals |
| 5-10% of supply | At Risk | Vulnerable to coordinated attacks, low legitimacy | Urgent: incentivize voting, reduce friction |
| <5% of supply | Critical | Effectively centralized, captured by small group | Emergency: reform governance or accept centralization |
Reality Check: Most DAOs operate in "Concerning" or "At Risk" territory (5-15%). This is normal but not ideal. Constant experimentation needed to improve engagement.
🎯 Best Practices for Maximizing Participation
- Use Snapshot (off-chain) by default: Only use on-chain voting for critical operations (smart contract upgrades, large treasury spends). Gas-free voting = 10-30x higher turnout
- Make proposals digestible: TL;DR at top (3 sentences max), clear FOR/AGAINST arguments, visual aids. 99% of voters won't read 50-page forum post
- Voting reminders & notifications: Discord/Twitter bots notify token holders when new proposals go live. Out of sight = out of mind
- Lower quorum gradually: If proposals consistently fail to reach 10% quorum, lower to 7% → 5% → 3%. Better to pass legitimate proposals at 8% turnout than gridlock at 10%
- Promote delegation: If you can't vote on everything, delegate to someone who can. Delegation = informed voting at scale
- Celebrate voters: Leaderboards, shoutouts, recognition. Social status motivates many community members more than money
5. Cast Your Vote
🗳️ Interactive: Vote on Proposals
Upgrade Smart Contract
Budget: $25,000
Marketing Campaign
Budget: $15,000
Quorum: The Legitimacy Threshold
✅ When Does a Vote "Count"?
Imagine a DAO proposal passes 100% FOR... but only 0.1% of token holders voted. Is that legitimate? Quorum solves this: the minimum % of tokens that must participate for a vote to be valid. Set quorum at 10% → need 10%+ turnout or proposal fails even if unanimous. Quorum is democracy's safety valve against minority rule—prevents 3 whales from controlling protocol while 99.9% of holders sleep.
⚖️ The Quorum Dilemma: Security vs Governability
Quorum is a double-edged sword. Set too high → proposals never reach threshold → governance gridlock → frustrated community → centralized multisig takes over. Set too low → tiny minority passes proposals → questions of legitimacy → community revolt. There is no perfect number—it's always a tradeoff between legitimacy and practicality.
📊 Quorum Settings Across Major DAOs
| DAO | Total Supply | Quorum % | Quorum (Tokens) | Quorum ($Value) | Pass Rate |
|---|---|---|---|---|---|
| Uniswap | 1B UNI | 4% | 40M UNI | $240M | 65% |
| Compound | 10M COMP | 4% | 400K COMP | $26M | 70% |
| Aave | 16M AAVE | 6.5% | 1.04M AAVE | $100M | 75% |
| ENS | 100M ENS | 1% | 1M ENS | $12M | 85% |
| Gitcoin | 100M GTC | 2.5% | 2.5M GTC | $3M | 80% |
| MakerDAO | 977K MKR | 10% | 97.7K MKR | $150M | 50% |
Pattern: Lower quorum = higher pass rate. MakerDAO's 10% quorum (high security for stablecoin) means only 50% of proposals reach threshold. ENS's 1% quorum = 85% pass rate. Inverse correlation between legitimacy bar and governability.
⏰ Voting Period: Time Also Matters
Quorum isn't just about how many vote, but how much time they have to vote. Short voting period (3 days) = lower participation (not everyone checks Discord daily). Long period (14 days) = higher participation but slower decision-making. Another tradeoff with no perfect answer.
Used by: Emergency proposals, parameter tweaks
Participation: 3-7% typical
Used by: Most major DAOs, general proposals
Participation: 5-12% typical
Used by: Major protocol upgrades, large spends
Participation: 8-15% typical
Used by: Conviction voting DAOs
Participation: Always active
🔄 Adaptive Quorum: Dynamic Thresholds
What if quorum adjusted based on historical participation? Adaptive quorum = set threshold relative to recent average turnout. If avg participation is 8%, set quorum at 6% (achievable but meaningful). If participation spikes to 15%, quorum auto-adjusts to 12%. Prevents governance paralysis while maintaining legitimacy.
Nouns uses dynamic quorum that adjusts based on recent votes. Formula: quorum = max(minQuorum, avgParticipation * 0.75)
⚠️ Quorum Manipulation Risks
Quorum creates perverse incentives: Whales can block proposals by NOT voting. If proposal needs 10% quorum but only 9% vote, it fails—even if 9% voted 100% YES. Whale strategy: Don't participate to maintain status quo. Solution: Quorum based on FOR votes only, not total participation.
Quorum = 10% of supply must vote (FOR + AGAINST + ABSTAIN)
Votes: 9% FOR, 0% AGAINST
Whales: Don't vote (stay at 9% total)
Result: Fails quorum, proposal rejected
Quorum = 10% of supply must vote FOR (ignore AGAINST/ABSTAIN)
Votes: 11% FOR, 0% AGAINST
Whales: Don't vote (irrelevant)
Result: Passes (11% FOR > 10% quorum)
🎯 Quorum Design Principles
- Start low, increase gradually: Better to pass proposals at 5% quorum than gridlock at 15%. Can always raise threshold later if legitimacy concerns arise
- Match quorum to proposal importance: Constitutional changes = 20% quorum. Parameter tweaks = 3% quorum. One-size-fits-all doesn't work
- Consider FOR-based quorum: Prevents whale manipulation via non-participation. Used by some DAOs (Optimism, Nouns variants)
- Monitor pass rates: If <50% of proposals reach quorum, threshold is too high. If 95%+ pass, might be too low (or community just hyper-aligned)
- Adaptive > static: Fixed quorum becomes outdated as participation patterns shift. Adaptive quorum self-corrects over time
- Longer voting periods = higher achievable quorum: 14-day votes can sustain 15%+ quorum. 3-day votes rarely exceed 5-7%
6. Quorum Requirements
📊 Interactive: Set Governance Parameters
Quorum Analysis
Delegation: Liquid Democracy at Scale
👥 Can't Vote on Everything? Delegate.
You hold 1,000 UNI tokens. Uniswap has 5 active governance proposals this month covering: protocol fee switch, Arbitrum deployment, grants budget, governance process reform, and v4 hook whitelisting. To vote informed, you'd need to read 200+ pages of forum discussions + understand DeFi economics + L2 architecture + smart contract security. Realistically? You don't have time. Enter delegation: transfer your voting power to someone who DOES have time, expertise, and alignment with your values. You keep your tokens, they vote on your behalf. This is liquid democracy—flexible representation without token transfer.
🔄 How Delegation Works (Technical)
Delegation is a smart contract function, not token transfer. You call delegate(address delegatee) on the governance token contract. Your tokens stay in your wallet (you can still trade/transfer), but voting power flows to delegate's address. Delegate now has their tokens' votes + your tokens' votes. Can revoke anytime (call delegate with your own address or different delegate).
// Transfer voting power to delegatee
_moveDelegates(delegates[msg.sender], delegatee, balanceOf[msg.sender]);
delegates[msg.sender] = delegatee;
}
🎯 Choosing a Delegate: The 5 Criteria
Not all delegates are equal. Some vote 100% of proposals with detailed rationales. Others ghost after getting delegations. Here's how to evaluate delegate quality:
What to look for: Deep knowledge in protocol's domain. For Uniswap delegate? Should understand AMMs, MEV, L2s, tokenomics. For Aave? Lending markets, risk parameters, liquidation mechanics.
What to look for: 90-100% participation rate. Check their voting history on Tally, Boardroom, or Agora. Did they vote on last 20 proposals? Or just early easy ones?
What to look for: Public voting rationales for every proposal (Discord threads, forum posts, delegate platform statements). Why did they vote FOR/AGAINST? What analysis informed decision?
What to look for: Delegate's stated governance philosophy matches your values. Are they pro-growth (aggressive expansion) or conservative (prioritize security)? Pro-decentralization or pragmatic (multisigs OK)?
What to look for: Delegate discloses any conflicts (employee of protocol, large token holder, paid by competing protocol). Recuses themselves from votes where conflicted.
🏛️ Top Delegates: Who Has Power?
Delegation concentrates power. Top 10 delegates typically control 30-60% of voting power across major DAOs. This creates efficiency (10 informed voters > 10,000 apathetic) but also centralization risk (oligarchy of delegates).
| DAO | Total Voting Power | Top Delegate | Top 10 Delegates | Concentration |
|---|---|---|---|---|
| Uniswap | 1B UNI | a16z (15M UNI) | 200M+ UNI | 20%+ |
| Compound | 10M COMP | Gauntlet (700K COMP) | 4M+ COMP | 40%+ |
| Optimism | 4.3B OP | Polynya (100M+ OP) | 800M+ OP | 18%+ |
| Gitcoin | 100M GTC | Hype Wizard (5M GTC) | 30M+ GTC | 30%+ |
Observation: DAOs started as "anyone can vote" (direct democracy) but evolved into "top 10 delegates control outcomes" (representative oligarchy). Is this bad? Nuanced. On one hand, concentration enables informed decision-making—better than 95% voter apathy. On other hand, recreates centralization DAOs were supposed to avoid. Solution: Active delegation rotation (redelegate to new voices), delegate accountability (transparent rationales), and emergence of delegate platforms (Agora, Boardroom) to surface quality delegates.
💰 Delegate Compensation: Should Delegates Get Paid?
Being a quality delegate is a job: 10-20 hours/week reading proposals, analyzing data, engaging community, writing rationales. Should DAOs pay delegates? Most major DAOs say yes—professionalized delegation = better governance. But how much?
Used by: Small DAOs, early-stage protocols
Philosophy: Delegation is community service, not career
Used by: Medium DAOs (ENS, Gitcoin)
Philosophy: Partial employment (can dedicate significant time)
Used by: Major protocols (Uniswap, Compound, Arbitrum)
Philosophy: Professional governance workforce
Optimism pays top delegates up to 14,000 OP/month (~$20K-30K depending on token price). Requirements: Vote on 90%+ proposals, write detailed rationales, engage in governance forums, host community calls. Application process + quarterly reviews. Result: 50+ professional delegates providing world-class governance oversight. Criticism: Creates "governance class" separate from average token holder.
🔄 Advanced Delegation: Sub-Delegation & Cascade
Most delegation is simple: You → Delegate. But some protocols support sub-delegation (cascade): You → Delegate A → Delegate B → ... This enables specialized delegation networks where voting power flows through chains of expertise.
- Extreme efficiency (3 super-experts make decisions)
- Domain specialization (DeFi expert, Security expert, Tokenomics expert)
- Extreme centralization (99.9% have no direct voice)
- Opacity (most delegators don't know who ultimately votes for them)
🎯 Delegation Best Practices
- Research before delegating: Check delegate's voting history (Tally, Boardroom), read their rationales, verify expertise. Don't delegate blindly
- Review quarterly: Is your delegate still active? Still aligned with your values? Redelegate if needed—delegation is flexible, not permanent
- You can override: Delegation doesn't lock you in. Can vote directly on specific proposals (your vote overrides delegate's for that proposal)
- Diversify delegation: If you hold tokens in 5 DAOs, delegate to 5 different people (domain expertise). Don't delegate everything to one person
- Support emerging delegates: Top 10 delegates have enough power. Consider delegating to quality smaller delegates to decentralize influence
- Delegate dashboards: Use Agora (Optimism, Uniswap), Boardroom (multi-chain), Tally (on-chain governance) to discover and track delegates
7. Vote Delegation
👥 Interactive: Delegate Your Voting Power
Don't have time to vote on every proposal? Delegate your voting power to a trusted community member who will vote on your behalf.
💡 Pro tip: You can undelegate at any time to vote directly. Delegation doesn't transfer token ownership, only voting rights.
Treasury Management: The DAO's War Chest
💰 $20B+ Under Community Control
DAO treasuries are collectively worth $20B+ (2024) across the ecosystem. These aren't traditional corporate budgets controlled by CFOs—they're community-governed pools of capital allocated via token votes. Uniswap: $1B+ treasury. BitDAO: $2.5B. ENS: $500M+. Lido: $300M+. This is unprecedented in human history—billions of dollars managed by thousands of pseudonymous internet strangers via governance votes. It's chaotic, inefficient, and occasionally brilliant.
🏦 The Treasury Composition Crisis
Here's the uncomfortable reality: Average DAO holds 80%+ of treasury in its own governance token. Uniswap treasury = 400M+ UNI tokens. If UNI drops 90% (happened in bear markets), treasury drops 90%. This is catastrophic risk management. Imagine Apple holding 80% of its cash reserves in AAPL stock. Would never happen in TradFi. But common in DAOs due to token distribution mechanics (treasury gets allocated tokens at launch).
📊 Major DAO Treasuries: The Power Rankings
| DAO | Treasury Value | Native Token % | Stablecoins | Monthly Burn | Runway |
|---|---|---|---|---|---|
| BitDAO | $2.5B | 60% | $400M | $2M | 15+ years |
| Uniswap | $1B+ | 95% | $30M | $5M | 6 months (stable only) |
| ENS | $500M | 70% | $80M | $3M | 2+ years |
| Lido | $300M | 85% | $20M | $1.5M | 1 year (stable only) |
| Gitcoin | $50M | 50% | $15M | $800K | 18 months |
Key Insight: Runway calculated on stablecoin holdings only (not native token, too volatile). Most DAOs have <2 years operational runway. Gitcoin + BitDAO exceptions (strong diversification).
💸 Treasury Spending Categories
What do DAOs spend money on? Four main categories: Grants (ecosystem development), Operations (salaries, infrastructure), Liquidity Incentives (attracting TVL), and Strategic Investments (partnerships, acquisitions).
Purpose: Fund ecosystem development—dev tools, analytics, integrations, research, community initiatives.
Purpose: Keep DAO running—core contributor salaries, infrastructure costs, legal, accounting, tools.
Purpose: Incentivize TVL growth via token emissions. Users provide liquidity → earn governance tokens → grow protocol.
Purpose: Big bets—protocol acquisitions, major partnerships, regulatory lobbying, marketing campaigns.
📈 Yield Strategies: Making Treasury Work
Sitting on $500M in stablecoins earning 0%? Wasteful. DAOs increasingly deploy treasuries into yield-generating strategies: lending protocols (Aave/Compound), liquidity providing (Curve/Uniswap), staking (Lido), or even Real World Assets (T-Bills via MakerDAO model). Goal: Generate 3-10% APY to extend runway.
⚠️ Treasury Failures & Lessons
What happened: Treasury manager (Sifu) revealed to be convicted fraudster Michael Patryn (QuadrigaCX co-founder). Community lost trust, token crashed -90%, treasury value evaporated. $200M+ lost.
Lesson: KYC treasury managers. Transparency matters.
What happened: $80M hack drained treasury + user funds. DAO voted against reimbursing users (insufficient funds). Protocol died.
Lesson: Maintain emergency reserves. Insurance protocols (Nexus Mutual) for smart contract risk.
What happened: Dozens of DAOs held 90%+ treasury in native token. Token crashed -80 to -95%. Operational runway <6 months. Mass layoffs, shutdowns.
Lesson: Diversify. Diversify. Diversify. Stablecoin runway = survival.
🎯 Treasury Management Best Practices
- Diversify immediately: Target 40-50% stablecoins within 12 months. Sell native tokens gradually (don't dump, DCA over quarters)
- Calculate runway: Monthly burn rate ÷ stablecoin treasury = months of runway. Aim for 18+ months minimum
- Treasury committee: 5-7 member oversight group (quarterly reports, spending approvals >$100K)
- Deploy idle capital: Stablecoins in Aave/Compound (3-5% yield). Don't let $100M+ sit earning 0%
- Transparency: Public dashboard (DeepDAO, OpenOrgs) showing real-time treasury composition, spending, runway
- Emergency reserves: Keep 6+ months operating expenses in liquid stablecoins (separate from growth capital)
8. Treasury Management
💰 Interactive: Manage DAO Funds
Recent Treasury Activity
Governance Attacks: When Democracy Gets Hacked
⚠️ The Dark Side of Open Governance
DAOs are trustless, permissionless, and transparent. These are strengths—but also attack vectors. If you can acquire enough governance tokens (buy, borrow, or manipulate), you can control protocol decisions: drain treasuries, upgrade contracts maliciously, change fee structures to benefit yourself, or simply gridlock governance. Governance is the ultimate attack surface. Smart contract security gets audits and bug bounties. Governance security? Still experimental, frequently exploited, billions at risk.
⚔️ Attack #1: 51% Governance Attack (The Nuclear Option)
The Concept: Acquire 50%+ of governance tokens → pass any proposal you want → drain treasury, change ownership, rugpull users. Classic plutocracy attack. Cost to execute on major protocols: $100M-1B+ (buying 51% of circulating supply). Expensive but theoretically possible for state actors, hedge funds, or coordinated whale groups.
What happened: Unknown attacker bought 50%+ of BUILD tokens (small cap DAO, only $3M market cap). Submitted proposal: "Transfer all treasury funds ($470K) to my address." Community voted NO with their 40%, but attacker's 60% = passed. Community negotiated compromise—attacker kept $250K, returned $220K. Protocol survived but trust destroyed.
| Protocol | 51% Supply | Market Buy Cost | Feasibility |
|---|---|---|---|
| Uniswap | 510M UNI | $3B+ | Very Hard |
| Compound | 5.1M COMP | $330M+ | Difficult |
| Aave | 8.2M AAVE | $820M+ | Difficult |
| Small DAO | 51% supply | $1-10M | Feasible |
🐋 Attack #2: Whale Manipulation (Coordinated Control)
The Concept: Don't need 51% if you coordinate with other whales. Top 5-10 holders = 30-50% voting power in most DAOs. Backroom deals, Discord coordination, shared incentives → small group controls outcomes without formal majority. Plutocracy in practice.
Context: Curve governance token (veCRV) determines CRV emission rates across liquidity pools. Control veCRV → direct $billions in liquidity incentives.
What happened: Convex Finance accumulated 50M+ veCRV (30%+ supply). Yearn Finance accumulated 10M+ veCRV. Together = 40%+ control. Coordinated votes to direct emissions to pools benefiting their protocols. Other projects had to "bribe" them (Hidden Hand marketplace) to get CRV emissions.
Result: $100M+ in bribes exchanged. Whale oligarchy controls Curve governance.
- Quadratic voting: Reduces whale power (cost = votes²)
- Vote delegation caps: Max 10% of supply per delegate
- Time-weighted voting: Conviction voting rewards long-term holders over whales
- Bicameral governance: Token vote + one-person-one-vote (Optimism model)
- Transparency: Public whale wallet monitoring, voting coalition disclosures
💸 Attack #3: Vote Buying & Bribery (The Mercenary Market)
The Concept: Don't buy governance tokens permanently—just rent voting power. Pay token holders $X to vote your way on specific proposal. After vote, they keep tokens, you keep outcome. Cheaper than 51% attack (no permanent capital commitment), harder to detect (looks like organic votes).
Argument FOR: Voters expressing true preferences (they prefer $$ bribe over protocol outcome). Market-based governance. Efficient capital allocation.
Argument AGAINST: Undermines governance legitimacy (votes bought, not earned). Voters don't consider long-term protocol health. Plutocracy 2.0 (richest can buy any outcome).
Hidden Hand facilitated $50M+ in bribes for Curve governance votes. Protocols pay $100K-500K per epoch to direct CRV emissions to their pools. Voters earn 10-30% APY on veCRV just from bribes (on top of trading fees). Is this governance or just vote auctions? Debate rages on.
⚡ Attack #4: Flash Loan Governance Attack (Instant Takeover)
The Concept: Borrow millions of governance tokens via flash loan, vote on proposal, return tokens—all in ONE transaction. No permanent capital needed. Attack cost: ~$50-500 in gas fees. This was a real threat in 2020. Now mostly mitigated by snapshot voting (power determined at past block, can't use flash-borrowed tokens).
- Snapshot voting: Voting power = tokens at block X (past). Can't use flash-borrowed tokens (didn't hold at block X)
- Delegation delay: Some protocols require 1-2 blocks after receiving tokens before voting power activates
- Block voting: Governor contracts block voting in same tx as token transfer
Security researcher demonstrated Compound was vulnerable to flash loan governance attack (could borrow 500K COMP, pass malicious proposal). Compound quickly implemented voting delay (tokens must be held 2+ blocks before voting power activates). Attack prevented. Now standard across all Governor contracts.
🛡️ Defense Mechanisms: How DAOs Fight Back
Voting power = tokens at block X (before proposal). Prevents flash loans, token buying mid-vote. Adoption: 80%+ of DAOs.
2-7 day delay after vote passes before execution. Community can exit or submit counter-proposal. Adoption: 90%+ major DAOs.
Proposals pass automatically unless Security Council vetoes (4-of-7 multisig). Used by: Optimism, Arbitrum.
Trusted multisig can veto clearly malicious proposals (drain treasury, rugpull). Used by: ENS, Nouns, others.
Require BOTH token vote AND delegate/citizen vote to pass. Used by: Optimism (Token + Citizens House).
Reduce governance power over time. Immutable contracts = nothing to attack. Philosophy: Uniswap v3 core immutable.
🎯 Security Best Practices for DAOs
- Use snapshot voting: Prevents flash loan attacks, reduces mid-vote token buying. Gas-free bonus.
- Implement time-locks: 2-7 day delay after vote passes. Emergency exit valve for community.
- Monitor whale accumulation: Alert system when single address crosses 10%+ supply. Require disclosure.
- Diversify voting mechanisms: Don't rely on token voting alone. Add delegation, quadratic voting, or veto councils.
- Regular security audits: Not just smart contracts—audit governance processes, token distribution, multisig practices.
- Governance minimization over time: Reduce what governance controls. Immutable > upgradeable when possible.
9. Governance Security
🛡️ Interactive: Understand Attack Vectors
51% Attack
If an attacker controls more than 50% of voting tokens, they can unilaterally pass any proposal, including malicious ones like draining the treasury.
✓ Safe: Attacker needs 21% more tokens to gain majority control.
🎯 Key Takeaways
Decentralized Decision Making
DAOs replace traditional hierarchies with transparent, community-driven governance. Every token holder has a voice in shaping the organization's future through on-chain voting.
Token-Based Power
Governance tokens grant voting rights proportional to holdings. Different mechanisms (token-based, quadratic, conviction) balance efficiency with fairness to prevent whale dominance.
Proposal Lifecycle
Members create proposals, community debates and votes, and smart contracts execute approved decisions automatically. Quorum requirements ensure legitimacy while timeboxing creates urgency.
Delegation & Participation
Don't have time to vote? Delegate your power to trusted representatives. This liquid democracy model enables high participation rates while respecting time constraints.
Treasury Control
DAO treasuries hold funds controlled by the community, not a board of directors. Every expenditure requires a proposal and vote, ensuring transparent and accountable resource allocation.
Security Considerations
Governance attacks (51% attacks, flash loans, vote buying) are real threats. Snapshot voting, time delays, quadratic voting, and multisigs provide layers of protection against manipulation.