On-Chain Execution thanks to SafeSnap and Reality.eth module
While decentralized finance on Ethereum has occupied the forefront of conversations, its rise has also precipitated a tremendous increase in decentralized governance. Over the past year, three strong trends in decentralized governance emerged in the Ethereum ecosystem:
- 1.Progressive Decentralization: centralized teams ceding control of their creations to their community / user-base / token holders.
- 2.Safe Asset Management: Gnosis Safe has become the preferred way for many projects to manage their Ethereum-based assets. At the time of writing, more than $19.5 Billion worth of digital assets are secured in Gnosis Safes.
- 3.Off-chain Voting: as gas prices have surged, many projects have elected to use off-chain voting (via tools like Snapshot) rather than their on-chain counterparts (like Aragon, DAOStack, Colony, Compound Governance, and so on), usually at the expense of a measure of decentralization.
Many projects in the Ethereum space, such as Yearn, YAM, mStable, Sushi, Balancer, Aave, DIA, dHEDGE, and Synthetix, to name a few, already use a Gnosis Safe as the core of their DAO structure. In this governance structure, the DAO’s Gnosis Safe should act in accordance with the outcome of off-chain votes, often via platforms like Snapshot. Projects usually land on this solution after wrestling with the dilemma introduced by the current gas prices.
On-chain voting for full decentralization, incurring significant (often prohibitive) gas costs for governance participantsvs.Off-chain voting to save on gas costs, at the expense of some decentralization (Gnosis Safe acting as a proxy for the project DAO)
Neither option is ideal, but in the interest of being capital efficient and inclusive to smaller token holders, the latter seems preferable — at least in the short term.
The SafeSnap module for the Gnosis Safe solves this dilemma. SafeSnap allows trustless, on-chain execution based on the outcome of off-chain votes, via a Gnosis Safe module connected to Reality.eth (an escalation-game-based oracle). This means teams can continue to secure their assets in a Gnosis Safe, avoid needlessly wasting gas with on-chain voting, and ease into decentralization by adding the module to their Gnosis Safe. Notably, they can choose to keep their Gnosis Safe signers as a safeguard, giving the community the option to remove them at a later date if desired.
In light of how trusted the Gnosis Safe has become within the Ethereum ecosystem, we see one of its primary use cases in the delivery of decentralized governance. With the Gnosis Safe at its core, one potential pathway to progressive decentralization, we predict is:
- 1.Multi-sig as a proxy: Gnosis Safe + Snapshot, in which the multi-sig promises to act in accordance with the off-chain votes. This is the current status quo.
- 2.Multi-sig as a safeguard: Gnosis Safe + Snapshot + SafeSnap, in which on-chain execution of off-chain votes is handled by the SafeSnap module, but there are still multisig owners that can veto malicious actions or act quickly in the case of an emergency.
- 3.Look ma, no hands!: Gnosis Safe + Snapshot + SafeSnap, in which the multi-sig owners have been removed, and the only way to execute transactions is via the SafeSnap module. (THIS IS HOW SHARKO GOVERNANCE WORKS, THE FOUNDATION WILL HAVE ARBITRATOR ROLE)
Just to be more clear, the SafeSnap module is an oracle-based solution that looks something like this:
- A Gnosis Safe module, where anyone can create a new proposal: an array of multisend transaction payloads.
- Each proposal is a Reality.eth question asking if (1) the linked Snapshot proposal passed, (2) did the proposal include the payload, and (3) does the payload do what the proposal describes.
- If the proposal passes on Snapshot, then Reality.eth should resolve to the same outcome, and after a 24 hour cooldown period, the proposal’s transactions are executable by anyone.
- Reality uses an ERC-20 token (a given DAO’s governance token) for the bond. The minimum bond can be set by way of a proposal to the DAO.
- The UI is a Snapshot plugin, in which users can enter an array of tx-payloads to be executed sequentially by the Gnosis Safe if the proposal passes. Once the proposal has passed, the Reality.eth question has resolved, and the 24 hour cooldown period is over, there is the option on the Snapshot interface to trigger each of the multisend transactions in the proposal.