The Synthetix Foundation has been decommisioned.
The protocol is now under the control of three distinct DAO’s: the protocolDAO, the grantsDAO, and the synthetixDAO. https://t.co/UscrSpSBV2
— Synthetix ⚔️ (@synthetix_io) July 28, 2020
While Synthetix has always been a leader of decentralized governance, this transition is about the furthest the protocol could go to taking a full stance on the topic. In particular, the Foundation will be replaced by three DAOs:
- The protocolDAO which controls protocol upgrades and variable configuration
- The grantsDAO which funds public goods in the Synthetix ecosystem
- The synthetixDAO which manages and deploys funds to contributors and other project needs
The segmentation of these DAOs paints an interesting picture in which different community members have the ability to contribute to unique areas of expertise. While the grantsDAO has been fully operational for quite some time now, the increased role of the synthetixDAO is one that has garnered the most attention from the DeFi community.
What’s to Know?
Without going too deep into the specific interworkings of the three different DAOs, we can essentially categorize the protocol DAO as handling all technical aspects, the grantsDAO as handling project incubation, and the synthetixDAO as ecosystem growth. The original post paints an excellent picture of the specific angles each of these DAOs will actually manage and is definitely worth doing a deep dive on if you’re deep in the Synthetix ecosystem.
Baked in that post, community members have rallied around one key aspect of the synthetixDAO – the $150M worth of treasury funds.
‘The synthetixDAO will continue to provide funding for network growth, but where the foundation was previously a major recipient of funding, now a large number of smaller entities will apply directly to the synthetixDAO for contributor funding’
"The current treasury value is ~$150m USD or ~450,000 ETH, at the time of this post."
For context, I don't even think the Ethereum Foundation has that much in their treasury.
Crypto networks are the next set of wealth games for mankind, equity companies are the past https://t.co/BpKdmfRSuu
— $KERMAN (@kermankohli) July 28, 2020
The announcement of the dissolution of the Foundation comes just in time for Synthetix coveted community call, a sure listen for anyone looking for a high tier lesson on what community governance looks like in action.
If you missed out on the community governance call earlier today, you can check it out here! https://t.co/V0DkUmnoe5
— Synthetix ⚔️ (@synthetix_io) July 28, 2020
It’s worth noting that the Synthetix team will continue to play a major role in governance, even with the Foundation being dissolved. Specifically related to the treasury, existing custodians will still be largely in control of the funding while just three key stakeholders make up the entirety of the DAO. This paints both a great check and balance on the management of the treasury in tandem with a path of gradual decentralization to be introduced with token-based voting over the course of the next few months.
Synthetix Strive to Decentralize
As if it weren’t clear, Synthetix’s long-standing commitment to decentralization is one that bodes very well for the future of the project. Whether it be the dissolution of the Foundation or the earliest yield farming programs to reward LP’s, Synthetix has created a tight-knit ecosystem with opportunities for all individuals, regardless of monetary status.
OK, this one has been building for a while so strap in. I talk to at least 2-3 seed stage founders/teams every week. Without fail every single one of them is fucking up some aspect of capital formation for crypto protocols. Every. Single. One.
— kain.eth (@kaiynne) July 28, 2020
If you’re a project looking to tap into DeFi, the grants and synthetixDAO offer two very promising onramps to get started. With the announcement of dHedge last week, it’s clear the leading DeFi derviatives protocol is set to make major waves on the application layer in 2020 and beyond.
Cooper is the Editor of DeFi Rate and an active contributor to leading DeFi media outlets like The Defiant, DeFi Pulse, and Bankless. He works with early-stage teams through Fire Eyes DAO to incubate governance models and grassroots community development. He is an ambassador to Set Protocol and an author of a weekly publication called Token Tuesdays. To stay up with Cooper, follow him on Twitter.