GC Update — DAO Governance
Proposal-based governance has been deployed to SalsaDAO!
Hello Geniuses! As we move toward our first proposal-based governance vote, we’d like to do a deep dive on all parts of SalsaDAO Governance.
One important thing we’d like to initially note is that you must lock sDAO in your escrow locker to participate in this vote. Read more to learn about our governance architecture.
Proposal-Based Governance
In our past Twitter Spaces and articles, we’ve mentioned that SalsaDAO Governance will be multi-faceted. GC has already released Curve Voting, which is currently being used for the decentralized token list on SpicySwap. Users in the community have committed sDAO to push their favorite tokens up on the SpicySwap token list. We’re happy with the response we’ve seen with Curve Voting and will be pushing more long-term polls this year.
Proposal-based governance uses a classic DAO structure as the base layer, and will be leveraged to make on-chain governance decisions regarding administration, contract parameters, and treasury actions. We’ve used a modified version of the KolibriDAO codebase for our DAO.
Changes to the existing contracts were necessary because our token was created a while before we implemented the DAO. The alterations we’ve made allow our DAO to have resistance to vote manipulation via flash loans.
The biggest change is the inclusion of the SalsaDAO Escrow Locker, which we will dive into in the next section. Feel free to view all source code on GitHub.
The full DAO setup includes: the core DAO contract, SalsaDAO Escrow, and the SalsaDAO Treasury. The treasury is already active and collecting fees from Matter DeFi’s farm-as-a-service tool. Future projects will include more fee extraction directly to the treasury. The SalsaDAO community will be able to manage these funds, make payments, and reinvest LP tokens to generate community-level yield.
All contracts have been deployed on mainnet and the first proposal has already been injected on SalsaDAO!
SalsaDAO Escrow Locker
The SalsaDAO Escrow Locker is a simple module where users can lock and release any amount of sDAO at any time. Using the Escrow Locker is required to participate in SalsaDAO’s proposal-based governance. A user’s Escrow Locker balance at voting start time will be their voting power in the DAO. We’ve added SalsaDAO Escrow to enable the same flash loan resistance that KolibriDAO benefits from.
As the creators of SpicySwap, we are in an interesting situation. SpicySwap is the only DEX on Tezos with flash swaps, and also has the highest amount of sDAO liquidity compared to any ecosystem DEX. For this reason, flash vote resistance is key for SalsaDAO Governance. We realize that this extra step is cumbersome for users, but the benefits outweigh the risks of not including this security feature.
Going further: using the SalsaDAO Escrow Locker will allow users to show that they are fully committed to governance, rather than using sDAO to chase yield or speculate. This level of commitment will be returned by GC. We will be focusing on new benefits and features for users who commit their sDAO to governance. Future airdrops, NFT drops, and lotteries will exclusively use escrow balances as the new access pass. We feel that rewarding those committed to SalsaDAO Governance is the right way to move forward.
Governance Parameters
We’d like to outline the initial parameters for our DAO, most of which are inspired by KolibriDAO’s launch. These parameters are flexible and subject to governance.
Total sDAO Supply: 57,500,000
Proposal Deposit: 300,000 sDAO
Minimum Yes Votes for Deposit Return: 20%
To make a proposal, a user is required to deposit 300,000 sDAO into the DAO contract. If the proposal achieves the minimum threshold of Yes votes, the deposit is returned to the user. If the proposal doesn’t achieve the minimum threshold of Yes votes, it is sent to the treasury.
This mechanism encourages off-chain coordination, and acts as a deterrent against spam proposals.
Vote Delay: 4 days @ 30 second blocks
Vote Length: 4 days @ 30 second blocks
We’ll likely adjust this in the future. We have a longer Vote Delay than KolibriDAO because of the SalsaDAO Escrow aspect. We want to give users additional time to lock their sDAO in governance.
Percentage for Super Majority: 67%
Initial Quorum: 11,500,000 sDAO (20% of supply)
Quorum adjusts via a weighted moving average, which means as proposals are submitted the system can move towards a more appropriate value. Initial quorum will be 20% of the supply.
Quorum Caps: 5,750,000 sDAO (lower) to 51,750,000 sDAO (upper)
This means that the lower quorum cap is 10% of sDAO total supply, and the highest it will ever get is 90% of sDAO total supply. The quorum is dynamic, so these caps are used to prevent quorum from going to 0% or 100% of the total supply.
Timelock for Execution: 1.5 days @ 30 second blocks
Timelock for Cancellation: 4 days @ 30 second blocks
All successful proposals must sit in the timelock for at least 1.5 days before they are able to be executed. If the submitting user hasn’t executed a proposal after 4 days from voting close, anyone may cancel it.
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Here at GC, we’re excited to see how far we can take on-chain governance. We are proud to be one of the first functional DAOs on Tezos.
One more reminder: be sure to escrow your sDAO before the first vote begins! Your balance in escrow at voting start time will be your voting power.
GC
