Synthetix – the leading derivatives exchange – has decommissioned its foundation in favor of a suite of community-operated DAOs.

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 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.

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.

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.

To stay up with Synthetix, follow them on Twitter or join the discussion on Discord.

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