Governance and staking
Proposals
DAO members use proposals to decide changes or actions of a DAO. These proposals can be to spend the treasury, change the configuration of a DAO, or decide the general direction of a DAO's future. After creating a proposal, DAO members can vote on whether to pass or fail the proposal.
Members can currently create proposals of the following types:
| Proposal Type | Description |
|---|---|
| Text proposals | For general proposals, such as directional changes or gaining consensus over an issue, DAO members can submit a text proposal. Text proposals are open-ended and don't take automatic effect or change the configuration of the DAO. |
| DAO configuration proposals | This proposal type allows members to change specific configurations of a DAO, such as the voting period, threshold, quorum, or any other configuration parameters. DAO configuration proposals generally take effect automatically after passing. Failed proposals leave the DAO configuration unchanged. |
| DAO upgrade proposals | This proposal type allows members to upgrade a DAO's contracts to the latest version so that members can enjoy the latest Enterprise features. |
| Proposal to update whitelisted assets | This proposal type allows members to add or remove assets that are displayed on a DAO's treasury page. |
| Proposal to execute message | This proposal type allows members to craft generic Cosmos/Wasm messages which will be executed by the DAO. This allows the DAO to send funds, interact with smart contracts, delegate/undelegate LUNA from the treasury, etc. Refer to the Message Templates section for examples of supported messages. |
| Proposal to update multisig members | This proposal type allows members to add or remove members from a multisig DAO, or modify an existing member's weight. This option is only available for multisig DAOs. |
Staking
In order to ensure the long-term stability of a DAO, and to prevent malicious governance attacks, DAO members must stake their tokens or NFTs before they can vote with them. Staking in a DAO means you agree to lock your tokens or NFTs for a period of time. During the staking period, users cannot trade or sell their tokens or NFTs.
Users can unstake their tokens at any time. Once a user has unstaked their tokens, the unstaking period begins. The length of an unstaking period is determined by a DAO’s configuration. After the unstaking period ends, users can claim their tokens or NFTs.
In token and NFT DAOs, you can only vote on a proposal if you have staked your tokens or NFTs.
Unstaking while you have votes on active proposals will update your votes to the amount of staked tokens you have after unstaking.
Voting
Once a proposal is created, it enters the voting period. Voting is done by DAO members who have staked their tokens or NFTs prior to the creation of a proposal. Users vote with their staked tokens. One staked token or NFT equals one vote. For multisig DAOs, votes are determined by weight. The votes are tallied at the end of the voting period. If a proposal has met the minimum number of votes, called the quorum, and if the number of yes votes reaches a threshold percentage of the total votes, the proposal passes. After a proposal passes, the proposal will need to be executed by the proposer.
Deposits
Deposits are submitted with proposals as a way to discourage spam. Deposit amounts are specified in a DAO's parameters. If a proposal fails to meet quorum or the number of veto votes at the end of the voting period is more than the veto threshold, the deposit will not be refunded. If a proposal meets quorum and returns a majority yes or no vote without meeting the veto threshold, the deposit will be returned.
Governance parameters
Governance parameters are outlined in the DAO configuration during the creation of the DAO. All DAOs have the following governance parameters:
Threshold
The percentage of yes votes required to pass a proposal.
Quorum
The minimum number of staked tokens, NFTs, or multisig votes that need to vote for an election to be valid, expressed as a percentage of the total staked token supply. Proposals that don't meet quorum fail, regardless of the vote outcome.
Unlocking period
The period of time it takes for a staked token to become unstaked. Tokens in the unstaking phase cannot be used to cast a vote. Once the unstaking period is over, the owner can claim them.
Vote duration
The period of time during which a user can vote on a proposal. When a proposal is created, the vote duration starts. Once the vote duration is reached, the votes are tallied and the proposal either passes or fails. No votes can be cast after the voting period.
Veto threshold
If the amount of No With Veto (NWV) votes on a proposal is above the veto threshold by the end of the voting period, the proposal will fail, regardless of the amount of yes votes.