Aragon and Balancer Develop a Zero-Cost DAO Voting System

Aragon and Balancer Develop a Zero-Cost DAO Voting System

October 6, 2020

Key Takeaways

  • Aragon and Balancer will create a $200k liquidity pool to support Snapshot development.
  • Snapshot enables DAOs to pool votes and push them for on-chain execution.
  • Previous models made on-chain voting expensive due to high gas fees.

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Aragon and Balancer Labs are collaborating to launch Snapshot, an off-chain voting platform. Through the implementation of Aragon Agreements and Aragon Court, Snapshot will enable DAOs to take their off-chain voting and record it on the Ethereum blockchain. 

Aragon Brings Lowers Cost of Governance

Before this partnership, DAO off-chain voting relied on multisig wallet holders to uphold the voters’ will. Internally, this process is called optimistic execution.

Once the latest update passes, Snapshot will enable DAOs to vote for free and pay just one time to get their decisions executed. 

Past reliance on off-chain pooling and delegated execution was a governance vulnerability and an unnecessary expense and legal liability. Multisig wallet owners could ignore their community’s desires or be legally accountable for implementing their decisions.

If the community decided to invest in a marketing campaign to promote the sale of more ANT tokens, for example, the SEC might hold the multisig operators accountable for selling securities.

Using Snapshot’s latest feature, Aragon-based DAOs can take advantage of free off-chain governance without losing their decentralized element.

Non-Aragon DAOs leverage the xDAI STAKE system to take care of governance, while execution happens on Ethereum. The benefit of sidechain systems is that DAO members avoid expensive fees for each vote. Instead, only one member needs to push the decision on-chain and get it executed.

Once the vote is complete, the proposal can be pushed on-chain to an Aragon timelock app called Disputable Delay.

During this delay, any member can create a dispute if they disagree with the proposal. Disputes are handled by the Aragon Court, which consists of three nonpartisan judges who have clear evidence and collateral on the line.

“This new approach to DAO governance will address the high costs and congestion associated with the current system. Snapshot fits perfectly into Aragon’s vision in creating the best-decentralized infrastructure for DAOs to flourish,” said Luis Cuende, Founder and Executive Director of Aragon Association.

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