MIP-4 DRAFT: Transitioning to Snapshot for More Efficient DAO Decision-Making
Summary
This proposal aims to enhance the efficiency and inclusivity of MetalSwap’s DAO decision-making process by transitioning to Snapshot, a decentralized voting platform. The move to Snapshot is intended to make DAO decisions cheaper and more accessible, while maintaining the current DAO rules.
Background and Context
MetalSwap’s DAO has been instrumental in driving key decisions, and more will be in the future. However, a significant challenge has emerged in the form of high transaction costs associated with on-chain voting on Ethereum’s mainchain. The cost for voting on previous proposals reached $25 in gas fees for an average voter in normal conditions.
The highest-cost-ever of interacting with MetalSwap’s DAO during high prices and busy Ethereum mainchain has surpassed 0,03 ETH 2 years ago, when ETH was at 4k$, we can see some heroes spending 120 $ in total to cast a vote
See MetalSwap’s DAO contract
Ethereum Transaction Hash (Txhash) Details | Etherscan]
This high cost poses a barrier to participation, especially for those holding fewer XMTs. It not only deters frequent voting but also limits the inclusivity of MetalSwap’s decision-making process. We understand that the latest upgrades happening in Ethereum’s mainchain protocol are smoothing this risk, meanwhile other solutions can become interesting. Snapshot, a decentralized voting system, took the lead offering a potential solution to this challenge by enabling fee-less voting. This proposal aims to include Snapshot to address these concerns and enhance the efficiency of DAO’s decision-making process.
MetalSwap’s DAO currently requires a minimum of 3M $XMT to open a new proposal and a 20M quorum for participation in 3 votation days. The “Self Delegate” button must be clicked with the voting public address before the proposal is published.
https://app.metalswap.finance/#/governance
While these rules have served us well, the cost associated with on-chain voting can be a barrier to participation. Snapshot offers a solution to this issue by enabling fee-less voting on a platform that can fetch on-chain data, and not only. This transition aligns with a deep commitment to inclusivity and continuous improvement.
What is Snapshot?
Snapshot is a decentralized voting system that has gained traction in the DeFi space for its innovative approach to community decision-making. Unlike traditional on-chain voting mechanisms, Snapshot offers a fee-less voting experience, making it more accessible and cost-effective for users.
Key Features of Snapshot:
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Decentralized Voting: Snapshot empowers decentralized businesses and projects to create proposals and allow their community to vote using cryptocurrency. This process, known as ‘vote signaling’, traditionally incurred fees due to the movement of currency between wallets. With Snapshot, this cost is eliminated.
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Off-chain Signing: Snapshot utilizes ‘off-chain’ signing techniques, ensuring that voting is fee-less. It achieves this by leveraging the decentralized storage network, IPFS, bypassing the need for on-chain verification. As a result, votes on Snapshot are essentially free of charge.
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Wallet Connectivity: Users can participate in Snapshot polls by connecting their cryptocurrency wallets, like MetaMask, to the Snapshot platform. This seamless integration ensures that only eligible members can cast their votes on open proposals.
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Transparency and Security: Snapshot’s decentralized nature ensures that projects can engage their most committed members in decision-making without the interference of middlemen. By not sending transactions to a blockchain and instead using the IPFS network to store votes, Snapshot maintains transparency while avoiding typical transaction fees.
Snapshot’s approach to decentralized voting has made it a popular choice among many DeFi projects, offering a platform where communities can come together, voice their opinions, and shape the direction of their chosen projects.
Proposal Details
This proposal suggests the following changes:
- Transition to Snapshot:
We propose to set Snapshot as MetalSwap’s alternative voting platform. This will make DAO decisions cheaper and more accessible, while maintaining the current DAO rules.
- New Decision Flow for MIPs:
The process for deciding the platform for a new MIP votation will be based on the nature of the proposal:
- Involving New, Unaudited Code: Proposals that introduce new code requiring an audit will continue to be voted on-chain. This ensures the highest level of security and scrutiny for significant changes.
Example: If we aim to deploy a completely new kind of XMT Staking pool, introducing new rules and not-yet-audited Smart Contracts, the decision will be made through an on-chain votation.
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Adaptations/Redeployments to Existing and already deployed Contracts: Proposals that involve tweaks or modifications to already deployed and audited contracts can be voted on through Snapshot. Example: If we want to deploy a new Smart Pool using the existing contract structures, the decision can be made via Snapshot
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No Smart Contract Deployments: Proposals that don’t involve any Smart Contract deployments at all will be directed to Snapshot for voting.
Example: Decisions about new graphic assets, new documentation, partnerships or html changes will be made via Snapshot.
For borderline cases where it’s not clear which platform should be used, the Foundation will make the final decision on how to manage that particular MIP before its official publication, ensuring the best interests of the community are always prioritized
Example: IMHO Adding a new Asset to MetalSwap’s Hedging tool must be voted on-chain, because it involves not only soft deployments, but also research about the specific Asset, its oracles and a lot of satellite-reasoning.
Note: Regardless of the voting platform, it’s imperative that users click the “Self Delegate” button on-chain to retain their voting rights.
These changes should provide clarity on the decision-making process for new MIPs and the criteria for choosing between on-chain and Snapshot voting.
Timeline and Milestones
The implementation of this proposal will follow these milestones:
T1. Approval of MIP-4
T2. Transition to Snapshot
T3. Potential future MIPs will take place on Snapshot
Cost and Resource Estimates
The transition to Snapshot is expected to be cost-efficient, given the platform’s fee-less voting system. The entire cost of the operation, including the cost of Smart Contracts and feature development, should be covered by the foundation, which will use the Funds raised for the development of the project.
The foundation could also publish this MIP in terms of $XMT in order to create the proposal.
Transitioning to Snapshot for DAO decisions represents a significant step forward in our commitment to continuous improvement and inclusivity. By considering future changes to voting eligibility, we aim to make our decision-making process more accessible. We invite our community to vote on this proposal and help shape the future of MetalSwap.