Synthetix, the permissionless derivatives protocol, has officially launched GrantsDAO. The decentralized autonomous organization (DAO) is responsible for approving and denying grant proposals for any tangible contributions to the Synthetix ecosystem.
The launch of GrantsDAO is one of the first of many milestones for the project to transition towards a fully decentralized protocol. With the newly formed DAO, grants and other community contributions to the ecosystem can happen in a transparent and decentralized manner. The DAO will allow active community members to receive monetary compensation for tangible contributions approved by the DAO.
All proposals are available for anyone to view via snxgrants.io, allowing anyone to see which grants have been approved or denied directly on the website. Potential proposals and initiatives from the DAO may include infrastructure changes and upgrades, promotional content, dApp front-end hosting, and more. While these are some high-level suggestions, the DAO is hoping to approve a much wider range of contributions to protocol.
GrantsDAO is currently comprised of five prominent Synthetix community members.
- NocturnalSheet (also widely known as The SNX Professor)
- Creator of SynthetixStats.com, Jaaq
- FrameWork Ventures Partner, Vance Spencer
- Synthetix’s VP of Partnerships, Garth Travers
- Synthetix’s Communications Manager, Jordan Momtazi
The GrantsDAO members were elected by a rough consensus from various discussions within the Synthetix community. While this may not be the most transparent or efficient way for electing community members, it does provide the initial steps for decentralizing governance of the protocol at large.
Importantly, it’s nice to see that the DAO doesn’t include high-level executives from the team, including Founder and CEO Kain Warwick or CTO Justin Moses. Instead, the Synthetix community has decided to elect active community members as well as a few team members, including the VP of Partnerships and Communications Manager who are both highly active and knowledgable within the community and the protocol at large.
While the DAO only comprises of five members, we can assume that as the structural dynamics of GrantsDAO are fleshed out, memberships will become more inclusive and permissionless for active members of the broader community.
For anyone interested in submitting proposals to GrantsDAO, the high-level process can be outlined as follows:
- Fork the GrantsDAO repo on Github and use the proposal template provided
- Submit a Proposal Request (PR)
- Notify GrantsDAO members via the official Discord
- Any proposals worth considering will be officially submitted to the GrantsDAO and listed on the SNX Grants website
- All proposals will be given a two-day grace period for voting for DAO members as well as the broader community to discuss the viability of the underlying proposal
- Following the grace period, DAO members will be required to vote “Yes”, “No” or “Abstain”
- If 4 out of the 5 existing members vote yes (i.e. 80% approval), the proposal will be approved and the grant will be distributed to the proposer
Generally speaking, this is a relatively fair way to ensure that the community stays active and rewarded for any valuable contributions to the protocol. While the DAO will need to continue to decentralized and include more community members (as five members is a fairly little amount), this is an important step for the protocol to decentralize over time.
Decentralized Autonomous Organizations (DAOs) are quickly establishing themselves as a viable mechanism for decentralizing the governance of DeFi protocols. Synthetix is one of many to announce their upcoming governance transitions towards a DAO. Kyber Network, MakerDAO, and Nexus Mutual are all DeFi protocols leveraging a DAO for fair, transparent, and decentralized governance for tokenholders over the underlying protocol.
It should come as no surprise that many DeFi protocols are likely to launch DAOs for governance, grant approvals and contributions from their respective communities. It’s interesting to note that prominent, untokenized DeFi projects like Uniswap and Compound are unable to leverage DAOs given the lack of a native token. We’re excited to see if any untokenized DeFi protocols will integrate a native token where governance over the protocol is one of the core utility mechanisms for the token.
For anyone looking to stay up to date on Synthetix and their continuous transition towards decentralization, feel free to join their Discord and hop in on the discussion.
Analyst at Bankless – one of the leading resources for open finance. Lucas is an active contributor to the DeFi ecosystem with appearances in other notable DeFi outlets including The Defiant and Our Network. He has years of experience working with dozens blockchain and token startups where he focused on token economics, marketing, and growth.