Tips for planning your project's decentralization
How to plan for your project's decentralization in light of FIT21; Optimistic dual governance on Aragon OSx creates efficient and productive DAOs; Hiring for a Senior Frontend Engineer.
What’s New
FIT21 makes it clear that decentralization is top of mind for regulators, and should be top of mind for your project, too. Today, we’re breaking down what you should think about at every level of your governance stack when planning your decentralization roadmap.
How can your DAO operate efficiently while not sacrificing on security? Optimistic Dual Governance enables productive DAOs while ensuring security with a veto backstop. Learn more about this design and get in touch about a custom build for your project.
We’re hiring for a Senior Frontend Engineer to join our App team! Check out the role.
Tips for planning your project’s decentralization
Governance is key to achieving decentralization goals and ultimately designing better systems. These systems also need to take into account the new risks that decentralization introduce (such as operational and security). Planning ahead can help smooth out the bumps in the road.
To help, we've created a checklist of everything you need to consider before choosing your governance stack.
This includes:
Onchain execution
Governance tokens
Modular governance
Granular permissions
Adaptability
Security
User experience
1. Onchain Execution
In order to decentralize, it’s critical to distribute control over some decisions to token holders. Token holders therefore need to make and execute decisions onchain without the interference of trusted intermediaries.
2. Governance Tokens
Not all tokens are made equal. When it comes to governance tokens, the devil is in the details. Make sure your token has both ERC20Votes and ERC165 standards to be compatible with onchain governance. Or, use an external wrapper or locker contract.
3. Modular governance
Having different stakeholders own different types of decisions moves the needle on decentralization and avoids the risk that comes with broad stroke one-token-one-vote governance. Your stack should support multi-body and multi-process customization (example: Optimistic Dual Governance).
Multi-body governance: Multi-body capabilities allow you to give different groups control over different decisions. This can include a mix of token holders, multisigs, subDAOs, and other creative ways to build a voting census.
Multi-process governance: Choosing different stages, approval thresholds, and time delays can help you create processes that are more specific to the decisions you need to make. Being able to run different processes in parallel leads to more effective decision-making.
4. Granular permissions
Access control is at the heart of onchain governance and is key to making decentralized decision-making more secure. You can implement safeguards by limiting actions with thresholds, such as spending caps and parameter ranges.
5. Adaptability
You'll need to consider how your governance can evolve. As your protocol and assets grow in value, they become riskier to move. Be careful not to get locked into a governance model that is extremely difficult to change. This can open up enormous security risks.
6. Security
Some ways to evaluate a stack's security:
The track record of a project, team, and protocol
Rigorous and ongoing audits
Actively maintained and supported code base
7. User Experience (front-end)
Smart contracts are sovereign, most UIs are not. You may need to consider either the decentralization of your front end architecture and/or self-hosting it, to reduce the risk of censorship and ensure your members can always access it.
Looking for help building your onchain governance? Get in touch about a custom build from our team.
Highlights from the week
Optimistic Dual Governance enables teams to ship faster while allowing key stakeholders in a main DAO to have final veto control. This creates more efficient, productive DAOs while not compromising on security.
Learn more about this governance design:
Actions
Plan for your project’s decentralization now.
Learn about Optimistic Dual Governance.
Share the Senior Frontend Engineer role with someone who might be a good fit.
Redeem your ANT for ETH.
Have a great weekend!
—Aragon X