[SEP #7] Governance Framework

We are pleased to share with you the first draft for SafeDAO’s new governance framework. We took the feedback from the 1:1 calls, the SafeDAO Improvement Survey and also from the forum post “Towards a Governance Framework for SafeDAO” and consolidated them into a first draft.

The ratification of the governance framework is one of the milestones before voting on the transferability of the Safe token as outlined in SEP #3.

The goal of the governance framework is to outline and set rules and procedures for the following topics:

  1. Stakeholder mapping: The governance framework shall outline the various stakeholders within SafeDAO. By clearly defining these roles, we aim to make clear who has which rights and responsibilities.

  2. Intersection of Safe Ecosystem Foundation and SafeDAO: The governance framework shall clarify the relationship and interaction between the Safe Ecosystem Foundation and SafeDAO, showcasing how the Safe Ecosystem Foundation is involved in SafeDAOs operations and governance.

  3. Scope of governance: The governance framework shall provide clear guidelines on what domains are within the scope of governance, what are not and which ones will be over time.

  4. Dynamic governance: Recognizing that change is an inherent part of growth, the governance framework will establish a dynamic, iterative process. Governance will evolve over time according to different seasons and sprints, including a review period and governance amendment period. This flexible approach will allow us to adapt and innovate while the epoch approach bundles proposals and allows for efficient monitoring and decision making.

  5. Possible voting systems: The governance framework will also address different voting systems, like single/multiple choice, weighted voting, and the degree of transparency in voting (public or private). This will ensure we have a democratic, inclusive, and transparent decision-making process.

  6. Agree on parameters for Season 1: For our first governance season, we will collectively decide on the type of voting system to implement. We will also discuss and determine for which types of proposals we might want to experiment with different parameters.

This governance framework is not static, but rather a dynamic structure aimed to evolve over time and experiment with new methods. We believe that this approach will enable us to find the best systems for our community over time.

Next steps: Collaboration and feedback process

To facilitate an effective collaboration and feedback process, we are sharing the draft as a Google Doc where everyone can add their comments and suggestions. Your contributions are critical in ensuring this framework is as robust, dynamic and effective as possible. Additionally, it is also possible to comment in this thread with any thoughts.

Community Calls

In addition to this, we will be hosting two open calls where we will discuss the governance framework, answer any questions, and take note of your valuable inputs. These calls will be held at the following dates:

Tuesday, 11. July - 4pm GMT: Governance Framework Call #1

Thursday, 13. July - 4pm GMT: Governance Framework Call #2

THE FULL PROPOSAL CAN BE FOUND IN THE NEXT POST

18 Likes

[14 Aug 2023: Below version represents the updated version after feedback has been incorporated from Phase 0]

[29 Sept 2023: Below version represents the updated version after feedback has been incorporated from Phase 1 and the discussions around the resource allocation framework]

[10 Oct 2023: Minor change in wording]

Title: Governance Framework

Authors: @Andre, @Christoph

Abstract:

The purpose of the governance framework is to define and outline the key stakeholders involved in the governance of SafeDAO, to establish a dynamic governance approach and to describe the governance process


Proposal details:

A. Hierarchy of governance sources

SafeDAO governance is built on a hierarchy of norms. In this hierarchy, each level must comply with the level above. On top stands the SafeDAO constitution, which sets the blueprint for SafeDAO, a decentralized collective, stewarding the thriving ecosystem around the Safe Smart Accounts on Ethereum and other blockchains. The governance framework must align with the constitution, and in turn, seasons and proposals must adhere to the governance framework. This structure ensures each element supports and enforces the broader goals outlined in the constitution.

B. Stakeholder overview

SafeDAO is made up of various stakeholder groups, with a participant potentially being part of several groups. An overview of each stakeholder is provided below:

I. Token holders

1. Rights

Safe token holders (Token holders) can vote within the scope of governance of SafeDAO (see C. Scope of governance). They can vote with their vested and unvested tokens and delegate their voting power.

2. Responsibilities

Token holders are encouraged

  • to actively participate in decision-making processes, lending their voice to proposals, discussions, and voting.
  • to delegate their voting rights to trusted individuals or entities, if unable to actively participate
  • to fully understand the implications of their votes by doing their own research to ensure informed decisions. If they cannot commit to this due diligence, delegation to delegates is encouraged.

II. Delegates

1. Delegation process

The delegation process is offchain. Token holders can delegate their votes to any address of their choice. The current delegation system requires full delegation of the voting power. Partial delegation may be implemented. Token holders can redelegate or undelegate at any time.

2. Rights

Delegates can vote on behalf of token holders who delegated their voting rights to them. Delegates may not delegate their delegated voting right to someone else.

3. Responsibilities

Delegates should be actively involved and responsible for representing the interests of the token holders, participating in decision-making processes, and facilitating transparent and effective governance. As such, delegates should provide a short reasoning on each of their votes on Snapshot through its commentary function.

III. Guardians

1. Guardians selection

Safe Guardians are active members of the Safe community, who have verifiably proven their commitment to SafeDAO’s vision. They steward the Safe ecosystem and protocol, while driving the adoption of Smart Accounts. They are mission-aligned and likely to be actively participating in governance.

The first cohort of Guardians (Guardians v1) was chosen by the Foundation and has already received a retrospective token allocation and enjoys certain benefits. Given that Guardians play an essential role in SafeDAO governance by virtue of their responsibilities, there will be further cohorts. Those cohorts will be administered by SafeDAO. Details will be laid out in Guardians v2.

2. Rights

Guardians can vote with their tokens granted as part of Guardians v1.

3. Responsibilities

As outlined here, Safe Guardians are expected to

  • Keep up with announcements and discussions

  • Give feedback on Safe Ecosystem Proposals (SEPs) which will also serve as a signal to other community members.

  • Move proposals which are mature enough for a voting from Phase 1 to Phase 2.

  • Vote on SEPs via the Safe Snapshot space

  • Provide a reasoning on each of their votes on the SafeDAO forum and on Snapshot through its commentary function

  • Push new ideas that could transition to proposals

  • Advocate for voting delegations - boost responsibility by campaigning for other token holders to delegate

Guardians are encouraged to be actively involved in discussions on the forum.

Details of the responsibilities may be specified in a code of conduct, should one be established.

IV. Non-token holders

Non-token holders have various ways to contribute to SafeDAO. They can submit proposals, engage in discussions on the collaboration platforms and become delegates. As such their rights and responsibilities correspond to their corresponding role.

V. Safe Ecosystem Foundation (SEF)

The Safe Ecosystem Foundation (“Foundation” or “SEF”) is a foundation governed by the laws of Switzerland and established in Zug (Switzerland). A Swiss foundation is an independent special-purpose fund endowed with legal personality, whose assets may only be used to achieve the purpose of the Foundation. It is a special form of legal entity, as it has no shareholders and no beneficial owners and thereby aims to avoid the value extraction by governance bodies which are not in compliance with the purpose of the foundation.

SafeDAO is stewarded by the Foundation, consistent with the SafeDAO Constitution and the Foundation Deed. The Foundation acts as a legal wrapper of the SafeDAO treasury, facilitates and administers the governance procedures and implements passed governance proposals if necessary.

1. Purpose and mission

The Foundation Deed, the regulations, directives and policies of the Foundation in alignment with the Swiss foundation norms, delineate its purpose, mission, and governance structure. It states that the Foundation is dedicated to the development and promotion of technologies within the Safe Ecosystem, public education about the ecosystem, and the management of related assets. As a legal document, it lays down the operational blueprint, guiding the Foundation’s dealings, including liaising with various entities, managing intellectual property rights, and supporting research and development. This promotes transparency and accountability in the Foundation’s efforts towards achieving its objectives in the Safe Ecosystem, thereby ensuring its alignment with the overarching goals of SafeDAO.

The full text of the purpose of the Foundation in its legally binding, German version can be found here. An unofficial translated version (German / English) can be found here.

In principle, the Foundation does not have a profit-making-purpose and does not seek any profits. The Foundation may generate profits to the extent required for the realization of its purpose.

2. Foundation’s governance

a. Council

The Foundation council (“Council”) is the highest governing body of the Foundation, with the core duty to implement the Foundation purpose. There is a minimum number of three Council members required in accordance with the Foundation Deed. The current Council members are elected for a term of office of 4 years. With an exit of a Council member, the remaining Council members would appoint a new member. The Council can remove a Council member with a majority vote. The current composition of the Council can be found in the Governance Hub.

b. Responsibilities of Council

In order to achieve the Foundation purpose, the Council is tasked, among other things, with:

  • specifying the organizational structure and strategy using Foundation regulations and guidelines,
  • personnel planning at Council and executive management level,
  • appointing and dismissing members of executive management, and people entrusted with representing the Foundation,
  • supervising members of executive management and people entrusted with representing the Foundation with respect to objectives,
  • approval of the annual report / annual financial statements,
  • supervising compliance,
  • communication with the Swiss Federal Supervisory Authority for Foundations (also known as the Eidgenössische Stiftungsaufsicht / ESA).
c. DAO committees

DAOs face a variety of unresolved legal issues. The most prominent ones are the lack of legal personality, the limitation of DAO participants’ liability, and the tax treatment of community assets (please refer to the explanations of the dydx foundation and the chosen approach of a Guernsey purpose trust). The Foundation’s goal is to provide an innovative Swiss solution to the legal challenges by leveraging SEF’s legal personality in engagements with contracting parties and acting as a legal wrapper of the treasury for tax purposes.

SEF has prepared its Foundation Deed for the possibility of setting up so-called DAO committees. The unique characteristic of these foundation native bodies is that they can be staffed with DAO participants only and the composition is chosen by SafeDAO. Furthermore, there would be the advantage that the members of the DAO committee could be supported by the legal and financial department of SEF. Administrative support would allow members of a DAO committee to focus on their substantive activities. The Council as well as SafeDAO can assign certain activities, as well as rights and responsibilities which are in their scope of governance to the DAO committees. Currently, SEF is clarifying the organizational requirements for the establishment of DAO committees with the relevant authorities. Once these requirements have been clarified, it is intended that SEF and SafeDAO will jointly coordinate the establishment of DAO committees.

d. Supervision of Foundation

To ensure that the Foundation duly promotes the Foundation’s purpose and does not undertake any non-compliant value extraction, Swiss foundations are subject to supervision of the Swiss Federal Department of Home Affairs, enforcing through the Swiss Federal Supervisory Authority for Foundations.

3. Rights and responsibilities in SafeDAO

a. Economic holder of SafeDAO assets

SEF maintains stewardship over the assets of SafeDAO, e.g. Safe token allocation assigned to SafeDAO. The Foundation acts as a legal wrapper of the SafeDAO treasury. SEF does not engage on behalf of SafeDAO or allocate funds from the SafeDAO treasury without previously being signaled so by SafeDAO.

b. Governance administration

SEF assists with the administrative elements of SafeDAO’s governance processes. This includes:

  • Moderation and facilitation of governance proposal processes.
  • Removal of proposals that are fraudulent, spam-oriented, defamatory, hateful, or otherwise inappropriate or inconsistent with the SafeDAO Constitution, SEF Foundation Deed or any Foundation regulation (if applicable).
  • Exercising oversight and control over collaboration and communication platforms such as Discourse, Discord, Telegram, Twitter, and Snapshot to ensure and facilitate effective engagement and interaction.
  • Monitoring of the voting process including the accurate reflection of voting power, voting periods, quorums and approval thresholds.
  • Other necessary services aligned with the SafeDAO Constitution to ensure orderly operations.

SEF provides administrative support to governance processes in order to offer a minimum level of structure. It is open to support community initiatives that carry out governance administration independently or in addition.

VI. GnosisDAO

SafeDAO is a spin-off from GnosisDAO (see “History” in the Governance Hub), which was decided in GIP-29. This states that GnosisDAO has two functions:

  • Token holder: GnosisDAO is a significant backer and token holder (see “Safe Token” in the Governance Hub).
  • Joint treasury: A joint treasury between SafeDAO and GnosisDAO was established which is collectively governed by both DAOs.

C. Scope of governance

I. Domains of governance

The following domains are under governance of SafeDAO:

  • Constitution
  • Governance framework: This encompasses the scope of governance, dynamic governance, decision-making process and principles of proposal implementation
  • Resource allocation framework, once ratified
  • Assets of SafeDAO (see “Treasury” in the Governance Hub)
    • SafeDAO Treasury and joint SafeDAO/GnosisDAO Treasury
    • IP rights: ENS domain, NFTs etc.
  • Safe Grants Program with funding and administrative support provided by SEF
  • SEF governance signaling: Suggestion regarding the establishment and composition of DAO committees, once established by the Foundation
  • Unpausing of Safe token transferability
  • Safe{Core} Protocol: Parameters and other governance-related aspects, once they have been transferred to the governance of SafeDAO

The Foundation’s fiat funds and its Safe token allocation are not under scope of governance of SafeDAO, unless these have been allocated specifically and solely for the purpose of SafeDAO by the Foundation.

The below table shall help visualize the responsibilities and scope of governance of SEF and SafeDAO.**

II. Proposal types

SafeDAO votes through Safe Ecosystem Proposals (SEPs). These are separated into proposal types, according to the domains of governance. Proposal types can be executed either on- or offchain.

Proposal types Description Execution
SEP: Constitutional Proposals Changes to the constitution offchain
SEP: Governance Proposals Changes to the governance framework and the resource allocation framework offchain
Other SEPs All other domains of governance not explicitly stated in the other proposal types off-/onchain
Grants Council Nominations for SGP Voting on the grants council nominations for SGP offchain

As steward of the SafeDAO governance the Foundation is administering which proposal type a specific proposal belongs to.

D. Dynamic governance

I. Objective

The core objective of dynamic governance cycles is to continuously evolve and optimize the democratic processes within SafeDAO. By committing to an iterative and data-driven approach, it is the aim to identify, implement, and refine the best possible governance model over time that truly reflects the collective interests of Safe’s community and promotes their active engagement.

II. Governance cycles

SafeDAO will change its decision-making process over a specified time frame and run several governance experiments (seasons). Seasons will consist of the following 4 sprints.

  1. Sprints 1-3

The proposals of the first 3 sprints shall address all proposal types except constitutional and governance proposals (s. C.II. Proposal types). This design shall allow a focus on fostering the Safe ecosystem while avoiding distractions from governance proposals.

  1. Sprint 4: Review and governance amendment sprint

As a counterpart to the restriction of governance proposals during the first 3 sprints, the 4th sprint is dedicated to governance review and governance proposals. During this time, no other proposals shall be submitted.

Notwithstanding the aforementioned, SEPs related to the implementation and execution of the milestones of SEP #3 are allowed to be voted on in any sprint until their completion.

  1. Guiding principles for timeline

The guiding principles of the timing are (1.) to make the sprint processes predictable, (2.) to provide sufficient time for preparation and review tasks of relevant events and (3.) to strike a balance between Sprints 1-3 and Sprint 4 (review and governance amendment sprint).

III. Changes to governance

Changes to the dynamic governance include the processes laid out in this governance framework which include, but are not limited to modifying the governance cycles, the proposal types and the voting mechanisms. The governance framework can be changed itself by an SEP.

E. Decision-making process

I. Governance toolkit

SafeDAO governance utilizes several tools:

  • Snapshot: An offchain voting platform
  • Discourse: A community forum dedicated to discussions around governance proposals and related topics.
  • Discord: The governance channel is used for governance announcements and less formal governance discussions.

Other tools that are being used can be found in the “Toolkit” section of the Governance Hub.

II. Proposal and voting sprints

To reduce operational burden and voter fatigue several proposals are combined into monthly sprints. Each monthly sprint is structured the same way, so that SafeDAO stakeholders are aware of relevant events and can schedule when they will take action.

Weeks Stage Weekly Schedule Time Description Who?
Week 1 Discussion Monday 0:01 UTC Start of proposal cycle (Proposals may also be posted in the forum before this date to maximize feedback during Phase 0) Authors of proposals
Week 2 Discussion/Review Monday 23:59 UTC Deadline to post proposal to forum for Phase 1/Start of signaling on proposal maturity Authors of proposals
Week 2 Review Wednesday TBD Proposal review call to present and discuss proposals with community Authors of proposals; Delegates; Guardians; Everyone interested
Week 3 Review Monday 23:59 UTC Deadline for signaling on proposal maturity Delegates; Guardians
Week 3 Submission to Snapshot Tuesday 23:59 UTC Deadline submission of eligible proposals to Snapshot Safe Ecosystem Foundation (subject to change) or anyone with 20k Safe token
Week 3 Voting Wednesday 0:01 UTC Start voting delay None
Week 3 Voting Thursday 0:01 UTC Voting starts Everyone eligible to vote
Week 5 Voting Monday 23:59 UTC Voting ends Everyone eligible to vote
Week 5/Week 1 Discussion Monday 0:01 UTC Start of next proposal cycle Authors of proposals

The below visualization is intended to showcase relevant dates on a timeline:

In case that the beginning or the end of a voting sprint event falls on a weekend or a bank holiday, this does not have any effect on the voting sprint processes.

III. Proposal submission

1. Phase 0: Optional discussion stage

Anyone can submit a proposal. Based on the proposal’s maturity, determined by a self-assessment from the authors, they can choose to submit the proposal to either Phase 0 or directly to Phase 1.

Phase 0 is optional, but recommended when discussing new ideas, since a successful proposal will need to garner momentum inside of the community. For this the proposal needs to be

  • Submitted to a new discussion thread on the forum in Phase 0
  • Marked with [Discussion] in the title

2. Phase 1: Official draft stage

If the authors determined by a self-assessment believe that the proposal is mature enough to vote on it (either after Phase 0 or directly), then it must be

  • Submitted as a new discussion thread on the forum in Phase 1.
  • If there was a previous discussion in Phase 0 add a link to it.
  • Marked with [Draft] in the title.
  • Formatted and contain information consistent with the proposal template in Annex 2.

IV. Process from Phase 1 to Phase 2: Signaling of delegates and Guardians

For a proposal to proceed from Phase 1 (proposal stage) to Phase 2 (voting stage), 3 delegates or Guardians, with a total voting power of 60.000 Safe token, must give signaling on the discussion thread. Guardians or delegates may not approve their own proposals. Guardians or delegates may signal approval by pasting the following comment on the proposal discussion thread: ”I am a Safe delegate/Guardian [link to your wallet address(es)] with sufficient voting power and I believe this proposal is ready to move to a vote." Multiple wallets can be linked. The relevant time to determine the voting power for signaling is the deadline for signaling on proposal maturity (E. II.)

If a delegate signals approval to move a proposal to a vote, it should not be construed as an endorsement of said proposal. It solely signifies that the delegate believes the proposal is ready to move to a vote. Authors can reach out to Guardians if they believe their proposal is ready to move to a voting stage.

SEF will implement processes to oversee the verification process to ensure that a wallet address belongs to the delegate/Guardian signaling and that they possess the necessary voting power. After the proposal has gotten sufficient signaling, a proposal number is assigned by a forum admin.

V. Phase 2: Voting process

1. Voting system

These are the parameters of the voting system that can be used in upcoming seasons. The specific voting system used depends on the specific season, the proposal types and the individual proposals.

2. Voting formalities

The final ratification of a proposal requires a successful vote on the safe.eth Snapshot space or specific subspace that fulfills the following requirements and those laid out in the Annex 1 to the respective season.

  • Duration: Proposal must comply with the voting delay and voting period of the Proposal and voting sprints
  • Who: The Safe Ecosystem Foundation can add proposals to Snapshot that are eligible to Phase 2 or entrust the responsibility to (a group of) guardians or other SafeDAO participants. In addition, any token holder with at least 20,000 Safe token can technically post proposals on Snapshot.
  • Form:
    • Proposals must comply with the voting system for proposal type. One outcome needs to be “Make no changes”
    • Proposal must comply with quorum
    • Majority - Specific majority of SAFE used for voting on Snapshot
    • Proposal title - [SEP #] SEP title here
    • Proposal description - Has to follow the SEP template
    • Proposal discussion link - Link to SEP on the forum

3. Participation agreement

The participation agreement as implemented through SEP #1 defines who qualifies as a SafeDAO participant. It provides rules to reduce liability to the greatest extent possible, and establishes a complaints and disputes procedure. It aims to manage expectations and provide legal clarity for stakeholders interacting with SafeDAO within the broader Safe ecosystem. Every stakeholder who wants to vote on a proposal via Snapshot needs to first agree to the participation agreement.

4. Voting power

The voting power is the sum of the voters own voting power and delegated voting power.

a. Own voting power

Token holders can generally vote with their vested and unvested Safe token. One Safe token equals one vote, unless agreed otherwise through a specific voting strategy.

SafeDAO and the Foundation do not vote nor delegate with their Safe token allocation. GnosisDAO only votes and delegates with their vested Safe token. SafeDAO and Gnosis do not vote nor delegate with their joint treasury.

b. Delegated voting power

Delegates may vote on behalf of token holders that delegated voting rights to them. Delegation does not restrict token holders from voting themselves; in the event of token holders exercising their voting rights, their vote takes precedence over any vote cast by their delegate. Token holders can delegate or redelegate any time.

c. Calculation of voting power

The voting power is calculated at the time that the vote starts. Votes can be changed until the voting cycle is over.

F. Principles of proposal implementation

  • If proposals approved by SafeDAO are not executed automatically onchain, governance proposals will be directed to SEF for implementation.

  • If proposals are carried out onchain via the Zodiac Reality module (also known as SafeSnap), SEF supervises for safety. If a proposal or transaction is deemed unsafe or fraudulent, SEF retains the right to veto the implementation and remove it.

  • If a proposal affects SEF’s sphere of responsibility, SEF will assess the proposal to ensure their alignment with the purposes of the Foundation and SafeDAO, feasibility for implementation, legal compliance, and overall safety and security. For compliance reasons SEF remains an unobstructed veto right. It will only exercise such right if a proposal does not materially comply with the defined regulations from SafeDAO such as this governance framework, the constitution or legal requirements.

  • If a proposal fails to pass the assessment, SEF retains the option to remove it for resubmission or implement it with certain limitations. In such cases, SEF will provide explanations to SafeDAO regarding the rejection or the restrictions imposed on the proposal.

  • If a proposal passes the assessment, SEF will diligently and in a commercially reasonable manner facilitate its implementation. Proposals that need the technical involvement of SEF shall state this clearly in the proposal template.

G. Entry into force

The framework shall enter into force on the second Monday after the successful vote on Snapshot.

H. Annex 1: Season 1

For the inaugural season, Season 1, the goal is to utilize the new governance framework in practice and gather experience. Therefore the changes to the voting types are minimal, only adding multiple choice voting.

For Season 1, the governance framework will operate under a soft launch protocol. Recognizing the need for flexibility during the formative phase of SafeDAO, the Foundation retains the prerogative to deviate from the processes laid out in D.II. Governance cycles and E.II. Proposal and voting sprints if necessary to ensure an efficient decision-making process. Any deviations will be communicated transparently and are subject to review in the review and governance amendment sprint. This exception is limited to Season 1 and is introduced to allow a smoother transition into the new governance framework.

I. Annex 2: Proposal Template

Changes to the proposal template in this annex don’t require the SEP process. The Safe Ecosystem Foundation holds the authority to make these modifications or delegate the responsibility to (a group of) guardians or other SafeDAO participants, ensuring alignment with the framework’s objectives.

[NOTE if Phase 0: Proposals in this section (i.e., phase 0) do not need to follow a certain structure like SEP proposals (i.e., phase 1) need to do. Nevertheless, we advise you to adopt the following template to the extent possible. This helps the reader better understanding your proposal in context and minimizes your workload needed later once the proposal transforms into an SEP.]

Title: Pre-fix: [Draft/Discussion]; write a concise title to be used for referencing the proposal.

Authors: List all names of people contributing to this proposal (e.g. legal names, forum usernames, ENS names, email addresses).

Created: Date when this SEP was initially created. Format: YYYY-MM-DD

Abstract

Write a short summary (tl;dr) of the proposal. Keep it as simple and concise as possible.

Proposal types

State which proposal type this proposal belongs to.

Proposal details

Share all information and context about this proposal, including:

Purpose and Background

What problem does it solve? What is the reasoning behind the proposal? What is the goal? Why should SafeDAO care about the proposal?

Effects and Impact Analysis

What are the effects of the proposal? What are the pros and cons? What are risks?

Alternative Solutions

What alternative solutions have been considered? Why have they been discarded?

Implementation

Does the implementation of the proposal require new code? How is the security of the code ensured? How is the implementation of the proposal carried out?

Own implementation possible
Own implementation but with funding (how much % to implementation)
Request for technical support through Safe matter expert:

  • Who is needed?
  • Did you reach out?
  • Is there a roadmap?

Open Questions

Anything that needs to be cleared up before the community can make an informed decision?

Copyright

Copyright and related rights waived via CC0.


Purpose and background

  • What problem does it solve? The proposal provides a stakeholder mapping and outlines the processes by which they interact with each other. It strives to implement checks and balances while recognizing DAO governance as a novel form of community alignment.

  • What is the goal? The goal is to get high-level buy on the abstract governance structures and to agree on concrete parameters of the first season.

  • Why should SafeDAO care about this proposal? SafeDAO has a genuine interest in their decision making and implementation processes. This is also manifested by the fact that a governance framework is required as an important milestone as a result of SEP3.

Effects and Impact Analysis

The governance framework will introduce a new level to the hierarchy of norms and thus have an impact on subsequent proposals. To avoid friction with any potential work on further proposals, the framework shall enter into force on the first Monday after the transferability of the Safe token has been enabled.

Alternative Solutions

  • No governance framework: Challenging for community members to engage in decision making and implementation without having a basic understanding of the organizational structure.
  • Detailed governance structure beyond a framework:
    • Would take a lot of time research and community alignment.
    • Would assume that there is the “one right” governance concept. It would not take into account that DAO governance is new and ideally tested through trial phases.

Technical Implementation

In order to implement the dynamic governance framework, settings in Snapshot will have to be changed and potentially new subspaces need to be opened to reflect the various voting systems in the future. Additionally, the forum structure will need to be changed to include the new proposal templates and an analytics dashboard needs to be created to check onchain the voting power of delegates and guardians when signaling under E.IV. Process from Phase 1 to Phase 2: Signaling of delegates and guardians.

Open Questions

None

Acknowledgements

Special thanks to Adam Hurwitz, Anton Mishchenko, Dmitry Bespalov, Eylon, Georg Reichhelm, Jekl, Jenny, jengajojo, Kevin Leuthardt, Lukas Schor, Nneoma, Oliver, papa_raw, Patrick Nick, Peter, Senad, Shelby, Tobias Schubotz and Varit for their contributions and feedback.

Copyright
Copyright and related rights waived via CC0.

14 Likes

Excellent work, also curious what’s Safe Protocol actually means, already out or just safe{wallet} business?

It’s current and future onchain components of Safe (factories, singletons, modules, guards etc.)

2 Likes

Is this about including some use cases for the $safe utility

No, this proposal is not introducing a new utility for Safe Tokens. It is, however, formalizing the existing governance utility further.

1 Like

Great overview. The sprint process for governance seems like an interesting approach.

3 Likes

Great work!
I’m interested in on-chain execution, how would it work?
It’d be an off-chain decision and just execution on the contributor’s side. Is I get it right?

A few quick remarks, some of them might be off a bit as I haven’t been in previous convos:

It would be useful to consider periodically wiping all delgations and forcing re-delegation (e.g. once per year). Governance lock-in due to (1) inactive delegation or (2) inactive delegates can be a common issue. Delegation is sticky unless some sort of process is implemented to prevent it as such.

Might be nitpicking on language here, but shouldn’t the Safe Ecosystem Foundation be stewarded by SafeDAO, and not the other way around? Or some language as: “The Safe Ecosystem Foundation has been selected as stewards by SafeDAO.” The way it’s currently set up makes it seem like the top-level authority is embedded in the Foundation, which limits DAO autonomy (maybe this was intentional, if so, ignore). An org chart could be useful here.

Has it been considered that any profits generated be redistributed to the SafeDAO treasury?

Again, nitpicking here, but if you’re establishing the Foundation and SafeDAO as separate entities, the language here should be “The foundation council (“Council”) is the highest governing body of the Safe Ecosystem Foundation…” As worded presently it sounds like it is the highest governing body of SafeDAO.

I would be more explicit in the indemnification language here (who counts as a DAO member? How much protection will Safe Foundation spend per member?) … as this is worded presently it’s pretty useless in a Court as a protectionary measure.

Again: a contract-writing concern. In an agreement concerning two parties it should be clear as to the powers of both parties. What happens if SafeDAO has determined that the administrative support is in-adequate? What powers does SafeDAO have to address administrative malfeasance?

It might be worth determining what is outside the scope of governance, e.g. funds raised from the $100m token raise.

I think this is the first time “SEP” is mentioned and it should be defined before acronym is used.

Quorum values look good but it’d be useful to have a backstop if quorum fails over X SEPs. This prevents complete stagnation.

In general I think a legal mind who has a better sense of contract writing needs to look over this. Hope this feedback helps.

4 Likes

Thanks for the detailed proposal @Andre and glad to see the governance process moving ahead in the DAO.

Here is some feedback:

  • Each of the stakeholders should have a definition
  • Guardian selection section does not offer any details about selecting guardians. Either change the title or add the selection process
  • I do not have much context of the legal setup here, but I’d encourage a non-KYC solution for members to participate in DAO committiees or for the treasury funds to be spent
  • Is it possible to have a public link to the SAFEDAO treasury?
  • Is C.4. ‘The SAFEDAO governance’ limited to governance framework, delegation and guardians program? or can the full list be specified?
  • II Proposal Types, I’d recommend sticking to constitutional and non-constitutional as the only two types to begin with. In theory we can make a separate category for each new governance activity we start in the DAO and over time it gets confusing and unnecessary burden.
  • III Proposal and voting sprints: I do appreciate creating a process to reduce voter fatigue. But generally, fatigue is the result of asking someone to do work which they are not sufficiently compensated for. While this processes may work with a low proposal flow, we will be back here once the flow gets too high to retain attention. If we want good governance, we should compensate people to do governance work on top of making the process more streamlined.
  • Vi. 1. Voting system: I’d recommend adding quadratic voting to dampen the influence of plutocracy. It would also be beneficial to include rank-choice as an option for certain cases.
5 Likes

gm great start! glad to join

I took a first pass at the draft leaving questions, comments, and suggestions in the Google doc. I included some of the main points here as doc comments should be expected to be resolved and hidden.

Nice work on this so far by everyone! :pray:t2:

Safe Ecosystem Foundation (SEF) and SafeDAO relationship

Sub-committees

This is awesome as it would be a big step forward for DAOs by showing a successful legal structure for other serious DAOs to take moving forward.

DAO member liabilities public clarification

It would be beneficial to define the current state (before committees are established) in terms of how participating DAO members who are not contractors or full-time employees of SEF are or are not covered under limited liability with Swiss Foundations. Then, compare this with how DAO members interact with SEF as a result of creating the sub-committee structure.

From what I understand, under Swiss Associations participating members have limited liability under the association. *Not legal advice.

This paragraph states that the goal is to provide limited liability. Does this mean Swiss Foundations work similar to Swiss Associations in providing DAO members limited liabilities?

SEF voting on SafeDAO proposals

Is this saying SafeDAO and the Foundation have not voted on past proposals and will aim to abstain from voting moving forward?

Voting process

Voting strategies

Ranked choice voting could be great to include. Voters ranking the options may lead to people thinking more in-depth evaluating the benefits and tradeoffs of each option rather than focusing mainly on one solution.

As @jengajojo mentioned above, it would be interesting to explore if and how Quadratic voting has helped in the governance process of other DAOs.

Encourage more public communication from delegates on voting decisions

I’ve reached out to a delegate in the past to understand their thought process before. It would be great to have this be public when possible.

Balance of debate between delegators and delegates

Do you think there is room for healthy (constructive and well intentioned) debate between delegates and delgators?

Seasons

It’s important to clearly communicate what seasons mean externally.

3 Likes

governance system has lots of potential. Yet somne has peter pan syndrome and goes backwards rather than forward.

Kudos to @Andre & @Christoph (and everyone behind the scene) for the dedication and thoughts they’ve put into creating this governance proposal. I’m really excited to see how our governance framework is taking shape - The timelines outlined for each season, combined with the commitment to continuous improvement are awesome!

I love that there’s the review period specifically for the framework amendment - it’s as if we’re engineering a self-iterating system. And yet, as we all know, there’s always room for a bit of fine-tuning.

I’ve got some questions and thoughts I’d like to share. I believe these ideas could make our processes even clearer, more align with the goal, and, most importantly, more inclusive! Because let’s remember, we’re not just crafting something cool here - we’re piecing together a representation of us all.

Guardians

I feel that it would be great if you could articulate the difference between Delegates and Safe Guardians. My interpretation is that Safe Guardians are akin to what other DAOs term as “recognized delegates”, carrying significant weight as they possess the power to shift proposals into the voting phase. Whereas anyone could be delegates (but not recognized).

That said, I really look forward Guardians V2, also I think it would be helpful to ensure there are checks and balances in place to account for the actions (or inaction) of these guardians. Having like a “accountability checkpoint” for our Guardians and to update their status (whether they’re active or not) would be crucial and i think we incorporate this into our consideration for V2

Governance Cycles

On the topic of governance cycles, I believe we might benefit from a little more agility during our initial phases. Given that we’re embarking on a journey of “governance experimentation”, a 4-5 months cycle might feel a tad long, particularly for our first couple of seasons.

As an alternative, we could adopt a three-sprint cycle approach, with two sprints dedicated to the governance scope and one for review and amendments. This setup would equate to ~3 months or roughly a over a quarter. This could provide us with a bit more agility, allowing us to pivot and adapt as things evolve. Let me know what you think!

Telegram group

I have some thoughts on the Safe Guardian Telegram. I think our goal should be on how we could boost transparency and inclusivity. At the moment, it seems that conversations within this channel are largely restricted to Safe Guardians. To foster a greater sense of openness and collaboration, might we consider making these dialogues accessible to a broader audience? I don’t feel it’s right to have this exclusive chat for only “guaridans”.

Proposal Process

While going through this part, I’ve been curious about the reasoning behind the fixed 60,000 SAFE token requirement for signaling approval. Wouldn’t it be more adaptable and future-proof to link this requirement to a percentage of the SAFE votable supply, rather than a fixed amount? With a percentage-based threshold, our process could better reflect the evolving stakeholders and remain flexible over time. It would also promote the guardians and delegates even more to work towards contributing to safe ecosystem for voting power if they want to keep this privilege.

Additionally, it would be valuable to know how many Guardians and Delegates currently have voting power over the proposed threshold. This information would help us gauge the potential influence spread within our governance process.

Voting Power

This raises an interesting question - what is the current votable supply for SafeDAO? I know we had some data on voting power dynamics, but that’s almost a year old now.

Given all the changes and developments, especially the grants program and the upcoming wave of SGPs, I suspect the landscape has shifted quite a bit. I’m planning to dive deeper into these numbers to create an updated picture, and I’d appreciate any insights from others who have been keeping track.

Minor clarification

I’d like clarification. Does this include only holders, or does it also extend to Delegates and Guardians with voting power above this threshold?
//////////////////////////////////////////////////////////////////

Looking forward to hearing your thoughts and continuing our collective effort to refine and improve our governance framework.

2 Likes

This is a great proposal and love to see the amazing progress that was made here.

There are two trends I see in Governance today which I think Safe could experiment and incorporate in the future. It might still be early but let me drop these in here for future reference.

  1. Stakeholders recognition.
    There are several constituents in the Safe DAO. Currently all are lumped in together, and incentivized under the same ‘Token’. In the future, each such stakeholder will have different perspective of the future, needs, incentives, and potentially, even voting power allocations.

    • Team & Guardians (Those who work for Safe DAO)
    • Safe Users (Those who pay gas, and perhaps fees, to the Safe Smart contracts)
    • Safe financial contributors (Investors, and general token holders looking to maximize the value of the token)
  2. Delegation –
    The general trend in Governance is delegation and would love to see how Safe applies and scales on this primitive. Safe Guardians are an amazing first step, and would love to also see how delegates become even more formalized with responsibilities, accountabilities, and incentives with the general notion that Delegates are a foundational to the DAO.

Once back from ETHcc, I will share a more formalized version of these ideas.

2 Likes

Hi everyone, I’ve been following this conversation and I’m impressed by the depth and breadth of thought that’s been invested into this proposal. I have a few thoughts I shared in the Governance Discord call that I’m posting here for good measure:

On the topic of delegates being actively involved in governance, I wholeheartedly agree. I believe that further steps could be taken to incentivize and ensure active participation of delegates and generate more interest in SafeDAO governance. See 1inch’s Recognized Delegate Program and Aave DAO’s Incentivized Delegate Campaign for examples of delegate compensation models and its effects. This could actually work in conjunction with The Guardians program, wherein a next version could potentially be comprised of the most active existing delegates, and would be a great addition to a SafeDAO Resource Allocation Model. A further step could be, as a community member mentioned in the thread, implementing measures to mitigate the risk of sticky delegation, such as regular delegate re-election or re-delegation campaigns. See Uniswap Foundation’s Delegate Race and Optimism’s Delegate Discovery Initiatives for inspiration.

Regarding the statement that “SafeDAO is stewarded by the Safe Ecosystem Foundation, consistent with the SafeDAO Constitution and the Safe Ecosystem Foundation Charter”, and that “the Foundation acts as a legal wrapper of the SafeDAO treasury, facilitates and administers the governance procedures and implements passed governance proposals if necessary”, I understand the need for a legal entity like the Safe Ecosystem Foundation. However, I agree with other community members who have suggested that the wording here might unintentionally communicate a top-down governance model. Perhaps we could revise the phrasing to better relay the stewardship role of the Foundation, and the agency of SafeDAO and its members.

The concept of “Seasons”, where SafeDAO will change its decision-making process over a specified time frame and run several governance experiments, is pretty interesting, and I see its potential for allowing ongoing iterations and improvements in the governance process. However, further explanation on how a Season is defined and what it encompasses would be beneficial for clarity. A dedicated Glossary or Definitions section in the proposal could serve to delineate such concepts. Maybe we can actually add “Definition of Terms” as a section in the proposal template, encouraging proposal authors to provide additional context and meanings for terms they use.

Lastly, on the points about delegate and token holder participation, this highlights an important aspect of delegate-token holder relationship dynamics. To further clarify and formalize this relationship, I propose we design a “Delegation Agreement”. Delegates could adopt this agreement to define their commitment and decision-making processes in permissionless delegation or state their preferred terms. This, coupled with clear delegate statements, can help provide more transparency in this dynamic.

Some other things I think could be nice to include in a final version of this prop:

  • An org chart depicting stakeholder groups within SafeDAO & showing how their responsibilities will overlap or diverge
  • Clarify what happens if there isn’t sufficient participation in a voting sprint
  • Share how the specifics of voting systems for proposals are decided or could be. Case study examples maybe?

Overall great work, and look forward to seeing the next version of this!

3 Likes

Great points @v3naru, @Eylon, and @Nneoma_StableLab!

Difference between Delegates and Safe Guardians

This is my understanding.

  • Guardians: Stewards of SafeDAO in their given area of expertise, e.g. Developers, designers, product, governance, and etc. They provide their energy to helping the DAO, core Safe team, developers, etc. in their given domain.
  • Delegates: Specifically focused on creating and analyzing existing governance proposals, communicating their perspective to the ecosystem and guiding proposals in the direction they see best for the ecosystem.

Guardian checks and balances

This is an interesting idea. It could be useful to have a dynamic onboarding/offboarding system.

  • Self-regulating
    • For example, say Q1 2024 I’m planning to spend the majority of my energy on another project, lower than the determined threshold for the SafeDAO. I may indicate to SafeDAO I will not be an active Guardian during this time period. If there are associated rewards, they would not apply to me during Q1 2024.
    • Then, Q2 2024, I plan to rejoin as a Guardian and allocate the required threshold of time to SafeDAO. I indicate my intent to SafeDAO, and I am potentially approved through voting to rejoin.
  • Community
    • The community could check-in with Guardians that are inactive to see if they are planning to remain active for the upcoming quarter.
    • Hopefully, Guardians would be self-aware enough to self-regulate to inactive if they cannot spend the energy required. However, there could be a community mechanism in more extreme cases where Guardians become inactive without self-regulating.

Broader audience for communication

Moving towards realtime and casual discussion on public places like Discord (#governance channel) or other more opensource platforms seems like a good move compared to closed Telegram channel.

Dynamic SAFE token requirement to signal approval

This makes sense as token distribution will change post-transferability.

Additions to framework

  • Definition of terms: This will help improve clarity and onboard new ecosystem members.
  • Delegation agreement: Defining clear expectations is important.
4 Likes

Hello, can you please tell me where I can read the requirements and specifics Hopefully?

Thanks everyone for the comprehensive feedback so far!

A lot of great comments and ideas are brought up in this thread, the Google Doc, and in both governance calls. We are currently in the process of triaging the feedback to determine its incorporation into the initial SEP and identify ideas for future governance iterations.

4 Likes

Just wanted to drop a quick note to let you all know that we’re still actively incorporating the recent feedback we’ve received. We plan to share a revised version of the SEP later this week.

Additionally, please remember that we have a community call scheduled for next week. All the details can be found here: Community Call #11.

1 Like