Exploring Aragon: Pioneering DAO Infrastructure Enabling Comprehensive Governance
This research article is brought to you by ThePASS team, and we extend our gratitude to Aragon Growth Guild for proofreading. The PASS is a pioneering DAO aggregator and search engine that plays a pivotal role in providing insights and analysis for DAOs.
Intro
The birth of DAO originated from a simple concept: humankind should use technology as a liberating tool to unleash all the goodwill and creativity of our species, rather than as a tool to enslave and take advantage of one another. Although, up to this point, DAOs are still experimental and have yet to establish best practices that extend beyond web3. It is precisely because there are many uncharted territories we have yet to explore within the ocean named DAO, making this mysterious blue ocean all the more captivating.
Today, we are embarking on a profound exploration of Aragon, one of the largest DAO frameworks, which serves as the foundational infrastructure required for the complete realization of DAOs.
Overview of Aragon
The failure of The DAO in 2016 dealt a significant blow to the DAO field and the entire history of cryptocurrency, subsequently slowing down the development of the DAO sector. For a considerable duration, the DAO landscape remained in a state of dormancy until the DeFi summer.
Aragon, one of the earliest DAO projects within the Ethereum ecosystem, held a successful ICO in May 2017 and raised 275,000 ETH ($25M at the time of raise), the equivalent at time of writing to ~$450M USD. It was the fourth largest crowdfunding sale in history at the time. Aragon provides templates to successfully launch DAOs within minutes with modular apps for further customization.
Until 2020, with the influx of DeFi users, a multitude of DAO experiments emerged during the bull market. These ranged from socially ambitious DAOs with global memberships numbering in the thousands, to NFT-focused DAOs facilitating small-scale investments and collections. Many DAOs faded away over time, but those that persevered have become shining stars within the blockchain realm. The momentum of DAOs continues to rise steadily.
For DAOs, Aragon stands as one of the trailblazers of DAO’s evolution. The open-source code and a series of ecosystem developments on the Aragon network have provided ready-to-use tools for subsequent individuals to create and manage new forms of DAOs. Lido, Decentraland, API3, NFTX, and a few other prominent projects used Aragon to start and scale their projects.
With over six years of experience in DAO framework development, coupled with a keen understanding of the industry’s demand for higher modularity and greater adaptability, Aragon stands at the forefront of exploring the DAO product roadmap.
As a result, Aragon no longer provides pre-set templates for organizations to run on-chain, but has instead established a novel, modular, and user-friendly DAO framework, empowering each organization to customize according to its unique requirements. In March 2023, Aragon launched a new modular technology stack:
- Aragon App: DAO creation and management platform with no coding required. The App provides a simple, easy-to-use home base onchain for the community to create proposals, cast votes, and onboard new members.
- Aragon OSx: Modular DAO framework with security and flexibility at its core. Aragon OSx is the foundational governance layer enabling adaptable organizations through the use of plugins, which can be installed and uninstalled to change the logic of organizations.
Aragon App
Compared to governance platforms like Snapshot or multi-signature wallets like Safe that focus on specific aspects of the DAO lifecycle, Aragon aims to provide a comprehensive end-to-end solution for building DAOs from inception to maturity. Every proposal, vote and action is on the blockchain rather than Snapshot which is offchain or Safe where rely on a trusted group of singers.
Until recently, most active DAOs were either DeFi protocols or web3 infrastructure that could exist on a one-size-fits-all platform. In contrast, the current wave of DAOs are a cornucopia of goals and ideas with a diverse set of needs. As DAOs gain popularity, the advantage of Aragon lies in its ability to offer a streamlined and all-encompassing set of tools for DAO creation and management, covering the entire spectrum from 0 to 1 and all the way to 100.
Aragon Stack
Data Analysis of Aragon
Overview
In the nearly six years since its inception, over 7,000 DAOs have been established using Aragon. Collectively, these DAOs manage an astonishing ~$12 billion worth of assets (including stETH), have proposed ~23,000 proposals, and have garnered over 45,000 votes from more than 6,000 voters, averaging around 7 votes per person.
While raw numbers may not convey an immediate sense of impact, in the following sections, we will delve into each specific subcategory, unraveling the developmental journey of Aragon and providing insights into its future prospects.
Aragon Data Overview
DAOs
Shifting our perspective to the specific numbers of DAOs on different blockchains, it’s evident that as an early-establishment project, Aragon was the preferred framework for establishing DAOs on Ethereum before 2020. However, starting from June 2020, the gas fees on Ethereum compelled numerous DAOs to migrate to alternative blockchains or adopt off-chain governance solutions like Snapshot.
Monthly Created Aragon DAOs on Ethereum by Version
In September 2021, Aragon expanded to Polygon, where the number of DAOs deployed rapidly surpassed those on Ethereum. This could serve as a metric indicating builders’ adoption of Layer 2 solutions within their communities. The new Aragon tech stack, App and OSx, launched on Polygon at the end of March 2023. This significantly increased the accessibility of DAOs to builders around the world. Notably, when deployed on Polygon, the cost of creating a proposal is as low as 5 cents or even less. Aragon has been actively extending its presence to other Layer 2 ecosystems, including deploying on Base in August 2023.
Monthly Created Aragon DAOs by Chain
Taking into account Aragon’s product iterations, since the release of the new tech stack in March 2023, the Aragon App swiftly surpassed the old tech stack, becoming the preferred platform for creating new DAOs. Remarkably, even in a market downturn, the number of DAO creations has risen against the trend.
Monthly Created Aragon DAOs by Version
Defining DAOs that make at least one proposal per month as active DAOs, it becomes apparent that the number of active DAOs on Ethereum hasn’t experienced a significant drop after June 2020, unlike the notable decrease in newly established DAOs. Additionally, the quantity of active DAOs on Polygon is within the same order of magnitude as Ethereum. This might imply that a considerable portion of DAOs newly created on Polygon might have limited activity later on.
Monthly Active Aragon DAOs by Chain
Proposals
The number of proposals and active DAOs on different chains exhibit similar patterns of change. On Ethereum, the monthly number of proposals has steadily increased since Aragon’s inception until it peaked around 800 in June 2020, after which it started to decline. Following that, in September 2021, Polygon took the lead, maintaining around 500 proposals per month throughout 2022, but showing a downward trend since 2023.
Monthly Proposals by Chain
Since the launch of the new tech stack in March 2023, the proposal activity of the previous version of Aragon Client has gradually transitioned to the Aragon App, which now sustains around 200 proposals per month.
Monthly Proposals by Version
When DAOs are grouped based on the number of proposals, it’s notable that two-thirds of DAOs have never initiated a proposal. Among the DAOs that have proposed, the majority of them have created less than four. This could be attributed to the current subdued market environment, where many DAOs are experimenting with Aragon’s new tech stack; however, the actual need for decisions might not be as extensive.
Aragon Proposal Distribution by DAO
Votes
The number of votes and voters can reflect the level of governance activity within DAOs. Both metrics exhibit a similar trend to the number of proposals. On Ethereum, the number of votes and voters experienced continuous growth followed by gradual reduction, eventually stabilizing at a steady level.
Currently, Aragon’s monthly vote count and number of voters are approximately around 500 and 200, respectively. Compared to other governance tools like Snapshot or Tally, Aragon’s user and activity numbers still exhibit a certain gap.
Aragon Monthly Votes by Chain
Aragon Monthly Voters by Chain
Fortunately, Aragon has opted to break away from the simple proposal-voting framework and take a more innovative approach. Governance within DAOs is a complex framework that demands a more sophisticated and modular structure. Some DAOs have to track reputation and involvement, others need strong incentive structures, others need robust debate and resolution tools.
The diversity of DAOs is driving a need for DAO architecture to be much more modular and interoperable with the best DAO tooling solutions, so that DAOs can pick and choose based on their requirements. Hence, Aragon has developed a new technology stack to address these needs and challenges. In Aragon OSx, DAOs have the flexibility to utilize plugins for adding or removing any custom functionality, including governance, asset management, membership handling, and more.
Treasury
As anticipated, the majority of DAO treasuries on Aragon are concentrated on Ethereum. Starting from 2018 and steadily accumulating, the treasury size surged during the DeFi summer in 2020, reaching its peak in November 2021, surpassing $1.7 billion. Following the subsequent bear market, the treasury size gradually declined, stabilizing around $500 million.
Aragon Treasury by Chain
Among the DAOs created using Aragon Client on Ethereum, Lido and Aragon itself possess the largest treasuries, together constituting over 80% of the total treasury amount. Following closely are API3, Altered State Machine, and Decentraland, representing projects in the Infrastructure, NFT, and GameFi sectors, respectively. This highlights the diversity of projects using Aragon.
Aragon Client Treasury on Ethereum
The newly launched Aragon App is still in its early stages, with limited mainstream protocol deployments or migrations. Leading the pack are Aragon Association and Eagle Ops, both of which are sub DAOs established by Aragon itself to support protocol development.
Aragon Client & App Treasury Distribution
Summary
Aragon is an ambitious crypto project. As a venerable framework established in the early days of DAOs, Aragon has witnessed the explosive growth of the DAO landscape and has faced challenges while competing with other more convenient and simple tools. Nevertheless, Aragon continues to persevere in its unwavering commitment to pushing the boundaries of DAO exploration.
Crypto analysts often qualify Aragon as an experiment in the field of public administration and governance that will eventually crystallize into a near-perfect governance system. One day it could appear to be a proper foundation of the new public order for the generations to come.
