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Leveraging Aragon OSx plugins to create an efficient governance design

Introducing Optimistic Dual Governance, an efficient governance design using plugins on Aragon OSx. This governance design enables DAOs to create two different stakeholder groups with different governance permissions, and then execute proposals optimistically. The plugins will undergo audits, but you can check out the progress of the first implementation here.

In a nutshell, Optimistic Dual Governance enables teams to work efficiently while allowing key stakeholders to veto proposals.

While any type of stakeholder group can be defined to meet your organization’s needs, this dual governance design was created for protocol DAOs with these two groups in mind:

  • Teams that are actively building a protocol or doing operational work: such as a core team, guilds, developers, and any other active participants that are making updates, parameter changes, and upgrades to the protocol itself.
  • Members of a Main DAO: any arbitrarily defined stakeholder group, which can be users, liquidity providers, stakers, investors, governance token holders, or another group that has an interest in protecting the protocol, but isn’t proactively involved in operations, development, or parameter changes.

Once you’ve defined your stakeholder groups, the next component of this design to understand is Optimistic Governance. Optimistic Governance is when proposals pass as long as they’re not vetoed. Rather than standard token-based governance where proposals need to be voted on to pass, proposals in an optimistic governance structure pass automatically after a timelock period.

This means teams can move faster and don’t have to put proposals through a traditional governance process, however, this creates an attack surface if proposal creation is open to any wallet. For example, if the main DAO lets a proposal pass that misuses treasury funds, there’s no way to reverse the execution. So, it’s more secure for the DAO to have a defined group—in this case, an allowlist of addresses—that can be held accountable to proposals.

The design was largely inspired by teams that have been exploring Optimistic Dual Governance for their own DAOs, including Lido and StakedFLIP. The design by Jacob from Zora was also a significant inspiration.

Here’s how Optimistic Dual Governance on Aragon OSx works from proposal to execution:

  1. Proposal creation: Multisigs or subDAOs on the proposal allowlist can create proposals to the main DAO.
  2. Timelock period: During the timelock, the main DAO’s members can veto the proposal.
  3. Execution: If the main DAO doesn’t veto the proposal during the timelock, the proposal automatically executes.

The permission management system at the heart of Aragon OSx enables a lean and efficient Optimistic Dual Governance design. It enables a main DAO to have separate permissions from those of the subDAOs, but all DAOs are able to operate within the same governance system.

This is the first iteration of this plugin. There are thousands of versions that could be created to suit the needs of your organization.

For example, in a future version of this plugin, different types of proposals can have longer or shorter timelocks. Minor updates could have a shorter timelock so it’s easier for teams to push small updates quickly, and significant updates could have a longer timelock, giving the main DAO members enough time to review them.

We can work with your team to build the iteration of this governance design that best suits your protocol. If you’re interested in using Optimistic Dual Governance, inquire here.

“OSx is the Unix of Ethereum—a future-proof DAO framework to build the DAOs that we can’t even imagine today. Dual governance will play a key role in communities that need to iterate fast while keeping valuable assets and rights in the hands of the token holders.” — Jordi, Core OSx Developer

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