How to let anyone and everyone run your DAO
Tl;dr: The optimistic governor module, empowered by UMA’s optimistic oracle, will unlock optimistic governance so that DAO treasury and admin contracts can be managed more effectively, efficiently and flexibly.
Let’s push the OO’s limits: Optimistic Governance
On-chain token-weighted voting systems are rigid and expensive and often have low participation and limited understanding. They are often supplemented by some admin mechanism that allows for quicker action, which introduces security risks and trust assumptions.
However, we tend to be biased towards on-chain voting and multi-sigs because they’re the easiest things to code into a smart contract, not because they’re how you would organize human beings if you were allowed to write down your rules in natural language.
When it comes to DAO governance, flexibility is of utmost importance.
If you can write down the rules of your DAO governance system, UMA’s optimistic oracle (OO) can enforce them. You are not limited to what is easy to implement within a smart contract. The potential for optimistic governance represents our most advanced form of “generalized contracting” yet.
For instance, you could give individual contributors a budget; you can allow anyone to execute transactions under certain circumstances; you can outline an investing strategy and allow anyone to execute it for you; you can delegate to expert committees without constant voting or trusting a multi-sig wallet.
The OO can provide maximum flexibility with minimal trust. It behaves like a strict civil-law legal system rather than the common-law system in England and the United States. The OO does not try to interpret edge cases. If transactions don’t clearly follow the rules, they are rejected.
The optimistic governor module is the key to flexible governance
On-chain voting and multi-sig wallets are dominant governance systems only because they’re easy to write into a smart contract, not because they’re the best ways to organize human beings.
The Zodiac identifier, coupled with the optimistic governor module, will allow for optimistic governance in which DAO treasury and admin contracts can be managed more effectively, without being limited to X-of-Y signing schemes or tokenholder votes, (although the Zodiac module can enforce those things, too).
To date, DAO governance has twisted itself to conform to the limitations of simplistic tools, instead of finding the best rules to coordinate around shared resources. The Zodiac identifier allows a DAO to publish their rules in human readable language with sufficient detail for a neutral third-party observer to determine whether transactions submitted to a Gnosis Safe follow the rules or not, and then have any address propose and execute transactions that follow those rules.
Because human voters, as part of the OO’s dispute resolution process, can be brought in the loop to resolve disputes, this is an incredibly flexible and powerful form of DAO governance.
Due to that flexibility, users of this identifier should be sure to make their rules as clear as possible, including the process for upgrading to a new set of rules.
How it works
- Connect the optimistic governor module to a Gnosis Safe and set parameters, including bond amount and collateral, link or IPFS hash of off-chain rules, etc.
- Anyone can propose transactions and anyone can dispute them.
- If transactions are not disputed, or if they’re verified after a dispute, anyone can execute them. That’s what makes the process optimistic.
Technical Specification
The optimistic governor module is being audited by OpenZeppelin and tested with a Gnosis Safe on Rinkeby.
Each Gnosis Safe will have its own Zodiac module contract which will track proposals made by external addresses. Each proposal is a bundle of transactions.
You can find the code on GitHub and more detailed instructions and scenarios in the Zodiac UMIP.
Next Steps
Our first use case will be enforcing the results of Snapshot votes on-chain by integrating with SafeSnap. From there, we can expand to more complex rule sets and use cases.
What is UMA?
UMA is an optimistic oracle that can provide and verify any arbitrary data on-chain.
Today, data from UMA secures markets and smart contracts across Web3, expanding the developer design space. The OO tells smart contracts “things about the world” so they can enforce real-world payout conditions.
UMA’s OO provides human-powered data dispute resolution between smart contracts. The OO has been called a “truth machine.”
Anyone can earn a reward by proposing answers to a data request, and that’s the lifeblood of the protocol. Proposed data will not be scrutinized unless it is disputed, and disputes are rare. That’s what makes our oracle optimistic.
Across and Polymarket represent two key use cases for the OO.
