The incredible rise of Governor DAOs by Dennison Bertram

co-founder of tally we are a dow tooling platform focused on on-chain Dows and in this presentation today what we are going to talk about together is Governor the Dow framework which has become the effective Dow standard for organizations on evm so first a little bit of background about tally itself so mentioned it's a dow tooling platform from Qing Dao's we power leading Dows across multiple use cases doubts such as enas git coin uniswap compound reflex or finance and more than 100 more we have awesome tools for discovering and understanding your community awesome delegation tools the ability to create no code proposals of executable code on the blockchain with simulations to understand how this code is going to execute when the proposal passes and really awesome Tools around voting and detailed proposal results so a little bit of background uh in the Dow space I think most of you are already aware of you know the the history of dows but after the Dow which we won't talk about but after the down Dallas kind of failed to catch on for a little while right we had things like maker Dow which built their own really robust ecosystem and Malik Dao really came to Breathe new life into the idea of like what a minimal vile would be uh but this was primarily limited either to maker or to small investment Dows like Dows where people came together to pool funds and try and work on something together we didn't really have a modular generalizable scalable tool that was really being used at scale so enter governor so if you folks aren't too new the dude oh okay we're back it's right give it up for our technicians in the back so if you remember d by summer one of the main things that kicked off defy summer was compound launched compound Governor Alpha and this was their attempt at building a really simple modular [Music] my protocol is really controlled by a dow right the exemption of maker the other thing that's very important here is it was completely open source so a little bit about the governor framework there's only three contracts that go into it you have your token you have your governor and optionally you have a time lock right so this is a very simple system that's easy to reason about as well after compound built Governor Alpha they also built an upgrade to that Governor Bravo and as it started to catch on it was standardized in the open Zeppelin Library so now you can go get the open Zeppelin Governor contracts from the same place that you get your erc20 contracts or your ERC 721 contracts right it's already audited and it's ready to be plugged directly in to whatever system you have right the other important thing here is it's scalability Governor works with one user it also works with a million users right so when we talk about the scalability of Dow systems you have to think what sort of platform would give your protocol the ability to have this level of scale and Governor offers that additionally it is secure so Governor launches opens up and standardizes it and what we see is the ecosystem around governor-based Dows really takes off uniswap adopted tally appears to help grow the ecosystem help work on standardizing these components compound upgrades nouns Dow appears they alter the governor's standard to work with ERC 721s nouns Dow is a governor-based Dao opens up and folds that back into the contracts repo so you have erc20 votes but you also have ERC 721 votes so you can actually build nft based governance right out of the box more and more tools start to appear Beyond tally things like boardroom civil folks that are starting to build out this open ecosystem and what really happens is A Star is Born right this really comes out of almost nowhere a lot of people weren't paying attention to Governor they thought ah one token one vote it's never going to work you don't like it but actually it turned out to be the ideal starting point for protocols for communities to effectively decentralize so where is the governor ecosystem today it's been a couple years there are now over 5 billion dollars in assets controlled securely by Governor protocol there's been over 400 000 on-chain delegations I'll get into delegation a little bit because this is a key feature that the governor protocol has brought to the ecosystem over 5 000 proposals have been made as a note almost half a billion dollars have been transferred through Governor proposals right 8 000 actions executed this is on chain executable code that has been executed by Governor proposals nearly a hundred thousand votes have been caught cast and something that's really really exciting here is 14 million ethereum addresses are eligible to participate in governor-based daos initially they are deployed on nearly every evm chain out there so what are the secrets of this kind of scale of this kind of success right first of all opens Upland Governor the governor framework is really easy to deploy and you can deploy it and you don't need to audit it because the framework is already set in the open Zeppelin Library so the same way you launch an erc20 token you can actually launch your entire protocol governance just as easily and be ready to go at the same time open Zeppelin makes a fantastic tool called The Wizard where you can actually just build your Governor directly in their wizard where you say this is a token I'm going to use these are the parameters for my Governor give me the smart contracts you can open and remix to download it to using your GitHub repo or just deploy it right away it's also exceedingly simple to use there's a lot of Dow Frameworks that require a lot of understanding about how the Dow functions what's the relationship between power and proposals in the governor framework you create a proposal you vote on the proposal and if it passes you execute the proposal it's very simple to reason about and this is very important when we talk about the complexity of large protocols right it's very difficult for people to wrap their heads around how some of these systems are functioning so it's really important that governance is something that's clear and transparent to understand if we create a proposal today and it passes tomorrow this thing is going to happen and this is critical for decentralized organizations because other tools off-chain Solutions different kind of like trust game Solutions these all assume some sort of other element to guarantee the Integrity of a voter proposal which may not always be the case and Governor it is entirely trustless and this is core if you are building something for which trustlessness and decentralization is critical Governor is the framework for you so I talked about being secure besides the fact that there have been no Governor hacks when we have over five billion dollars in assets secured by it you can use a time lock to slow down execution so if you have a proposal pass that's let's say there's some wild proposal that says steal everybody's money right it can go into a time lock which gives the voters an option to exit the system before this proposal goes into effect right and this is critical to decentralization because it's possible that a minority is out voted in the system and may suffer from the outcome of that proposal so these time locks give you the ability for a minority who disagrees to exit the system this is also critical when we talk about the use of governor for governing protocol upgrades for L2 Solutions if you are going to make some sort of change in L2 that fundamentally Alters the agreement with the users you need to give the users an opportunity to exit the system safely before these changes take effect secure all code execution runs through proposals what this means is the security guarantees are such that you can understand exactly how code will be executed it must run through a proposal there's no modular system where you can circumvent that kind of logic that's critical here additionally for fans of upgrading you can upgrade in place with upgradable contracts using open Zeppelin's Library compound has done this uniswap has done this nouns Dow is a big fan of upgrading they upgrade their governor and they add new things all the time so you can upgrade in place but if you don't like upgrading you don't have to upgrade in place what you can actually do with the governor framework when you use a time lock is you simply change the admin so you can have many Governors deployed in parallel all are able to function and you can Define the rules of how they execute code so you can actually say okay we're upgrading our governor which means simply this proposal is going to make that Governor now the administrator of this system so you can create really secure and safe upgrade paths because you can design it such that you only upgrade if you know that it works so delegation I mentioned this a little bit earlier this is a key innovation of the governor's standard when we talk about large protocols where we may have thousands tens of thousands some of these Dows have hundreds of thousands of Voters you don't really practically expect voters to participate on every vote right voter apathy is a huge problem in the Dow space or is it with Governor you can actually delegate your voting power to someone else who actually gives well I was going to swear who actually cares about um the proposals in voting so you can say hey Getty I want to delegate you my voting power because you are competent capable participant in this system I trust you and you know honestly I'm busy right so delegation is what allows us to build systems that actually do scale to millions of individuals because you're not required to have millions of individuals show up every time to get something to pass now what this means is that you can design really interesting systems around encouraging delegation really interesting Tools around helping you explore who's actually contributing in this ecosystem who do I want to delegate my power to this is something that tally offers we have a really exciting delegate portal where you can actually explore the people who are participating in the Dow see how they voted in the past see who else is delegating to them right all this information is on chain and open so if you don't like tally for some reason you can go use boardroom there's a large number of other tools out there that support the same standard so when you're building on top of Governor you're not building on top of just tally you're actually building on top of a large ecosystem of tools so if tally were to disappear one day for example you have Alternatives your Dow can be credibly neutral in terms of the platform that it works with token voting we talked about this before one token one vote one token one vote is not perfect right but it's a really great start especially when combined with delegation especially when you combine it with nfts where you combine it with soul bound nfts there's some interesting governance experiments out there of dows that use soul-bound nfts as a form of one person one vote right this is an example of a very contentious vote that happened recently on uniswap I forgot exactly how many people participated in this but it's in the many many high thousands of people who participate in this vote and in this case you actually see decentralization in action right one of the largest token holders in the ecosystem wanted to block this proposal everyone else is like no no we want this to happen and they came through and they voted and passed it right this is decentralization in action this is anti-capture in action this is really important the other part I mentioned is modularity the governor framework is highly modular right these things that we talk about delegation these can be other smart contracts time locks you can have multiple time locks Governors you can have multiple Governors you can set up a dow where you say all right for constitutional changes that effectively change how the protocol works we need a threshold Quorum of 70 percent of people voting yes but for the grants committee over here which just gives out money which isn't a threat to the functionality of the system you can have another Governor using the same token and say for this Governor we have a threshold of only 20 percent of people need to vote Yes to pass something so using this you can build actually a combination governance Legos of how we're going to create and organize our protocol you can have as many Governors as you have things that you would like to get done there's also a lot of cool features coming which I'll talk about in the next couple slides things like quadratic voting are coming multi-chain support is already here multi-governor support multi-token you can have a dow where the erc20 represents your liquid voting power but you could have it kind of my bicameral solution where you have another house in the Dow which requires having an nft to vote so you can have a one person one nft one vote house and then over a year you could have token weighted voting house right so you can balance the fact that maybe your protocol has enormous investors who outweigh everyone else and then you have the users of your protocol who also deserve a fair voice in governance and then finally nose is safe with Governor signers this is really exciting time marks are a specific contract that you get from the open Zeppelin repo but you don't have to use a time lock instead you can use a gnosis safe where the governor is a is a privileged signer on the gnosis safe what this means is you can actually do Progressive decentralization with Governor you can start your protocol run with the gnosis safe with the team you can add Governor as a privileged signer on the Nosa safe the team can continue to operate on the gnosis safe but the community can also operate on the Nosa safe eventually you can remove the team and be fully decentralized or you can add more Governors to the safe right you can have a network of safes that Define the strategy that you want to implement around governance power so I'll dig into that really quickly but first again I mentioned the ecosystem it's not only us at tally we have tools like boardroom nouns ecosystem is incredibly vibrant there's an incredible amount of stuff there Sybil Dao lens many more there's awesome teams out here scope lift see some folks from gfx out here in the crowd opens Upland Agora gnosis and more so there are many people building in this ecosystem so I'm going to run through some cool stuff on Governor that's happening today that's maybe exciting and if you're interested you can come talk to me about it later first notice zodiac has launched an upgrade plug-in for your safe you can go directly into your notices safe go to the app the gnosis zodiac app and they have a zodiac upgrade to Governor plug-in so you can actually not only deploy the governor and deploy your token directly from your noses safe but you don't have to use anything else it's entirely no code so you can be in a secure upgrade path later today if that was something that you wanted to do right so this is built into gnosis we have really exciting liquid delegation protocols coming uniswap built something called a franchisor where maybe your protocol has a foundation that has a large amount of tokens well you can put these tokens into the franchisor and now you can delegate with that to multiple people you can allow for sub-delegations so you could say I'm going to delegate to this uh College blockchain club and they are going to pick every quarter four delegates right it's entirely trustless it's audited and you can revoke those delegations at any time so you can build a protocol that actually has professional delegates you can say okay we're going to pass the proposal where we're going to fund a hundred thousand dollars a year to pay to professional delegates this organization the the let's say the um Foundation is going to pick a rotating pool of delegates who are going to professionally work on the protocol and you don't have to give them tokens you delegate them the authority right we have Community proposal factories governance Legos by gfx labs proposals are created based on a threshold you have to have a certain number of votes to create a proposal so to open this wider you actually have a sub-dow structure where the users can submit a proposal at a much lower threshold and then the users of the protocol can vote and say you know what this is a really good proposal this should go to a main Dow vote right if it passes at the the community proposal level it automatically becomes a real proposal on the governor itself right so this you can think of as a kind of temperature check right a kind of spam prevention kind of way of aligning on-chain teams around what's really valuable what should we really have our 1 million delegates come up and vote on every day right Community they almost have too much going on there to even talk about they have token streamer a way that you can stream funds to delegates to anyone they have token seller a way that they can trustlessly sell the ease that is in their treasury they're constantly doing upgrades I think the best thing to do is check out their repo to understand more really incredible stuff they're doing flexible voting this is a huge upgrade being built by the scope lift team forget coin it was paid for by a grant of uniswap but it allows for something called vote with params which means you when you cast a vote you can also send an arbitrary data that you can parse at the Smart contract level so you could say things like okay you have a hundred million tokens you can vote with it but it's required to hold a voting nft to pass a vote you can do things like voting on L2 with Bridge tokens you can do voting with tokens locked and defy protocols you can do shielded voting private voting right uh and even cheaper subsidized signature based voting this is something I didn't mention before but Governors by default meta transaction capable meaning you can do things like cast a vote by signature you can delegate by signature right so you can create an environment where tally has a special tool where we actually pay for the signatures to put them on chain so now you can give free voting subsidized by the Dow to your users quadratic voting was recently announced 0x is building out a quadratic voting Solution on top of Governor um if you're familiar with quadratic voting it's very popular way to deal with the imbalance that may occur in some communities on whether or not people are real humans or voting on things that are public goods this is very exciting they announced this uh last week definitely check it out trustless off-chain voting this is new it's still in the early stages we've been working with media protocols and o1 labs to build off-chain trustless voting using zero knowledge proofs right they have a library called snarkyjs which allows you to write zero knowledge circuits in typescript that users can run in their browser securely to generate proofs that can then go Unchained to represent the outcome of a vote so that's about it um if you are interested in governor for your Dow if you are thinking about decentralizing your protocol please come speak to myself or any one of our team members we have a boof over there um we also have some bounties we have an API for data on Governor so if you wanted to build a dow tool around understanding what's happening in these communities and ecosystems please come by our booth we have some awesome tools over there and if you need some help launching your Dow Consulting on how the best way to do this please also get in touch my email is right there I'll also be walking around uh and I'll be doing another talk on Saturday I think at 2 40 p.m main stage uh so you can also check me out there so that's that's that [Applause] perfect do we have time for questions not not really oh yeah if you're interested I'll be over on the side you can come talk to me about protocols Maybe foreign [Music]