We all know that the DAO is a decentralized autonomous organization and a collection of decentralized agreements recorded on the blockchain through smart contracts. DAOs have been around since 2016 and currently, most of the protocol projects running on the blockchain are DAOs.
a Defi Dapp is a simple DAO, people participate in decentralized financial transactions through automated smart contracts with programmed rules. However, the biggest part of DAO is in the protocol administration part, it includes community governance, protocol management... And this is a very difficult part to build because the decentralized environment is complicated, along with the user's incomplete understanding. But it is undeniable that decentralized governance will be the trend of the future.
To improve the community's understanding, the best method is learning and studying DAO governance models of ongoing projects in the blockchain world. This series of articles will introduce readers to the best model management construction and implementation projects, the most standard implementation.
Project No1: SingularityDAO
A. Brief introduction
SingularityDAO (SDAO) is a project built and developed by the SingularityNet foundation, this is a project of the type "Defi asset management" that launched on the Ethereum network in mid-2021 and is gradually moving to Cardano with projects under the Singularity ecosystem.
SDAO's strength is in inheriting core AI technologies that are their strengths and the project leaders are key figures of SingularityNet such as Ben Goetzen, Marcello Mari, Mario Alberto Casiraghi... SDAO promises to be an attractive Defi asset management project to the community.
However, the part that the author appreciates about SDAO is the governance of the protocol part stated by the SDAO team in their whitepaper. And let's take a look at SDAO's decentralized governance model as below.
B. Governance model.
Participants involved in the governance of the SDAO protocol include:
1 . SDAO token holders
2 . Participants are delegated by SDAO token holders
3. SDAO team (beginning phases of the project)
weight of vote = (owned tokens - tokens delegated to others) + delegated tokens
SDAO token is the token that has the function of granting the right to participate in DAO governance voting events on the SingularityDAO protocol. The specific functions of the SDAO token are:
1 . Vote on a SingularityDAO Governance Proposal through its Voting Function.
a. FOR : Agree
b. AGAINST: Totally Disagree
c. BLANCO: Disagree, but have comments to change the management strategy.
2 . To create a SingularityDAO Governance Proposal.
3 . To delegate voting function to another wallet on the Ethereum blockchain.
II. Special powers and positions.
The SDAO team holds very special positions and powers in SDAO governance, but they also state very clearly about the holding period as well as the conditions for them to give up their rights. This is a point that is very different from most other protocols as the original implementation team of the protocol usually does not state this.
Proposal creation right: is permission to create proposals for SDAO administrative activities. The SDAO team will only perform this task during phases 1 and 2 of the project and will hand it over to the community starting from phase 2.
Veto right: is the right to veto any governance proposal made by the community. This is a very special right and it is only available to the SDAO team during the protocol-building phases. This right will not take effect after phase 5 of the project or any time before phase 5 when SDAO deems the SDAO decentralized governance platform to be completely sustainable. But it will not be de-active in phase 1.
Guardian of Singularity: Is a very important position in the governance of SDAO. "The Guardians" have the right to suspend the operation of the SDAO protocol if they feel that the protocol is facing risks such as external attacks, and internal errors of the protocol. This position will belong to the SDAO team in the first 5 phases of the project and will be transferred to the community after phase 5. The most voted wallet will be the holder of the position of "guardian of Singularity".
III. Voting events
1 . Governance Decentralization Voting Events
This event is intended to find people (personal wallets) to participate in the implementation of the task of creating proposals for protocol governance. The community will calculate and set thresholds of "n" votes that must be met as a milestone for the event to be passed or not.
The "n" or minimum threshold will also represent the decentralization grade of SDAO over time. According to the published roadmap from the SDAO team, this event will take place regularly every quarter.
The special feature of this event is that it is immuned with the "veto right" of the SDAO team, which means that the event will have to have a result and SDAO has no power to interfere or have any special effects like abandoned events like other voting events.
2 . Constitutional voting event
The constitutional voting event is a public event that is activated from phase 2 of the project. Constitutional voting events pertain to critical SingularityDAO operational components, such as:
1. The SDAO ERC-20 token.
2. Voting Function.
3. Voting Right.
4. The Right to Create Proposals.
5. The Right of Representation.
6. Blockchain infrastructure.
Constitutional voting events will require a higher voter turnout criteria than other events and a majority vote of at least 51% and an SDAO veto if it exists in at that time.
3. Functional voting event.
Are events created to change, or adjust the operation of the SDAO protocol.
The functional voting event includes two types of events:
a. Major: pertain to adding functionality to the SingularityDAO Protocol. Functional Voting Events will require a medium turnout criteria and a 51% majority vote
b. Minor: pertain to updating variables within existing features of the SingularityDAO Protocol These events will require a lower turnout criteria than Major Functional Voting Events, and need a 51% majority vote.
4. Veto Deactivation Voting Event
This is a very important event for SDAO, it marks that the SDAO team no longer has any special powers or rights with the SDAO protocol including the position of "Guardian of Singularity". That means that the governance of SDAO has been considered decentralized and democratic.
The Veto deactivation voting event will be passed through the supreme veto constitutional voting event and the SDAO team veto right is not applied in this event. The conditions for this event to take place are described as follows:
a. During a Supreme Veto Constitutional Voting Event it has been decided to dismantle the SingularityDAO Veto Right, which can occur 12 months after the start of Phase 5.
b. Anytime before phase 5 if the SDAO team deems the decentralized governance network mature enough to prematurely dismantle its function. Will be activated by the SDAO team themself.
c. This event will need high voter turnout compared to other voting events, 75% majority vote.
IV. Decentralization implementation roadmap.
The process of decentralizing the governance of SDAO is shown in the following figure:
1 . Phase 1 (first 12 months from launch)
- The right to create proposals will belong to SDAO team.
- SDAO team encourages the community to participate in the discussion and submit suggestions.
- Create the first voting events to select authorized individuals (wallets) and introduce "proposal creation" to them.
2 . Phase 2 (12 months after the end of phase 1)
- Preparing and announce the "n" voting threshold for delagated people (wallets). - Introduce how to implement "proposal creation right" for delegated people (wallets) who reach threshold "n". At the end of the first month of Phase Two of the Creation of Proposals, a voting event will occur to lower the threshold by a certain amount, or to keep it as is. If the vote is to keep it as is, the same voting event will happen in the month thereafter, attempting once more to lower the threshold.
- If this vote is accepted, the threshold to be able to create a proposal will be lowered from then on. The following month, another voting event will be held to lower the threshold by a certain amount, to keep it as is, or to increase the threshold by the same amount.
- The threshold can be lowered up to a specified minimum threshold.
- Once the minimum threshold is reached, phase 3 will be activated.
3 . Phase 3 (12 months after the end of phase 2)
- The right to create proposals is encouraged and exercised by an individual or authorized person (wallet).
- During this time, this threshold cannot be lowered further but can be adjusted up if the community deems this necessary. In the case that the "threshold" is higher than this minimum at the end of phase 3, phase 2 will restart to lower the threshold again from the level that ended in phase 3 to the level needed in the phase 3, then phase 3 will restart.
- If the threshold is reached at the end of Phase 3, then Phase 4 will begin.
4. Phase 4 (12 months after the end of phase 3)
- The minimum threshold will be lowered again for Create Proposal right
5. Phase 5 (12 months after the end of phase 4)
- The minimum threshold will be lowered again for Create Proposal right. This can only be changed with the SingularityDAO constitutional voting event.
So we have learned the basics of how to build and develop the decentralized governance platform of SDAO. The last thing that we need to keep in mind is that all SDAO governance activities will be excuted through smart contracts, voting results will be sent to the blockchain, the actors involved in the management value will be represented by blockchain wallet addresses.
Please continue to learn about the next project MakerDAO here.
Sources: SingularityDAO website
This articles was written and checked by Vcoicheck.io team. A Project is sponsor by Catalyst.
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