README: GnosisDAO Governance Process

README: GnosisDAO Governance Process


GnosisDAO is a living entity that will evolve over time. This post provides an overview of the current GnosisDAO governance process.

To learn more about the vision of GnosisDAO, read the blog post Announcing GnosisDAO. If you have any questions about how to use GnosisDAO platforms, please take a look at the Governance Tutorial. Continue reading below for the governance process summary.

Governance Process

The GnosisDAO governance process is primarily conducted using the GnosisDAO category on the Gnosis Forum. For a proposal to be accepted, it must successfully pass through three phases:

Phase Content Duration Passing Requirements
Phase 1 Ideation • Post created on the Gnosis Forum in the GnosisDAO category Open-ended For proposals to successfully pass from Phase 1 to Phase 2, there is no formal requirement. However, if a Phase 1 proposal discussion fails to garner momentum from the community, it is unlikely to become a successful proposal.
Phase 2 Specification Gnosis Improvement Proposal (GIP) post created 5 days For proposals to successfully pass from Phase 2 to Phase 3, there must be one outcome with a relative majority of votes on the forum poll. If the relative majority of votes on the forum poll indicates the result Make no changes, the proposal will not pass to Phase 3.
Phase 3 Consensus Gnosis Improvement Proposal (GIP) post refined • GnosisDAO Snapshot poll • Omen Prediction Markets surfacing the proposal’s projected price impact on GNO (Gnosis Impact) 7 days For proposals to be accepted in this final phase, there must be one outcome with a relative majority of GNO used for signalling on the GnosisDAO Snapshot poll accompanied by a yes-voting quorum of a minimum of 4%[1] of the circulating supply of GNO. If the relative majority of GNO used in signalling on the Snapshot poll indicates the result Make no changes, the proposal will not be accepted and considered closed.

Now let’s dive deeper into each phase.

Phase 1: Ideation

This phase facilitates an initial, informal discussion on Gnosis Forum regarding potential proposals to GnosisDAO. You can initiate a proposal in Phase 1 by posting your idea in the GnosisDAO category with the phase-1 tag. This phase allows proposals to gather community insight for refinement before opening a formal poll.

Duration: Open-ended
Passing Requirement: For proposals to successfully pass from Phase 1 to Phase 2, there is no formal requirement. However, if a Phase 1 proposal discussion fails to garner momentum from the community, it is unlikely to become a successful proposal.

Phase 2: Specification

This phase requires proposals to be posted in the GnosisDAO category using the Gnosis Improvement Proposal (GIP) template. You can create a Gnosis Improvement Proposal (GIP) easily by adding the GIP subcategory, after which your draft post will automatically be populated by a GIP template for you to fill in. You can move a proposal to Phase 2 by posting the GIP-# with the phase-2 tag.

The GIP template requires all proposals speak to applicable fields, such as a Simple Summary, Abstract, Motivation, Specification, and Implementation. In addition to these fields, Phase 2 proposals must also include a 5-day forum poll on the proposal outcome, and it must include the option Make no changes.

Duration: 5 days
Passing Requirement: For proposals to successfully pass from Phase 2 to Phase 3, there must be one outcome with a relative majority of votes on the forum poll. If the relative majority of votes on the forum poll indicates the result Make no changes, the proposal will not pass to Phase 3.

Phase 3: Consensus

This phase opens proposals to two signalling methods for token holders. You can move a proposal to Phase 3 by editing the GIP post from the previous phase to reflect the forum poll result that received a relative majority of votes and by updating the proposal’s tag to phase-3. This serves to refine the proposal for the final phase.

Additionally, two signalling methods with a duration of 7 days must be created:

  1. Omen Prediction Markets: Two prediction markets must be created on the proposal, with one market denominated in GNO and the other denominated in a stablecoin. This enables the Gnosis Impact app to be included in the GIP post. This app calculates the projected price impact on GNO of the proposal’s outcome. These markets are funded by the Gnosis Safe Multisig owned by GnosisDAO. To create these markets, reach out to the GnosisDAO Admin forum moderator.
  2. GnosisDAO Snapshot poll: A GnosisDAO Snapshot poll must be created that contains the proposal text as well as a link to the GIP post on the Gnosis Forum, and it must include the option Make no changes. In order to be eligible to signal in the poll, community members must hold a minimum of 1 GNO.

Both a link to the corresponding GnosisDAO Snapshot poll and the Gnosis Impact app must be edited into the GIP post.

Duration: 7 days
Passing Requirement: For proposals to be accepted in this final phase, there must be one outcome with a relative majority of GNO used for signaling on the GnosisDAO Snapshot poll accompanied by a yes-voting quorum of a minimum of 4%[1] of the circulating supply of GNO. If the relative majority of GNO used in signaling on the Snapshot poll indicates the result Make no changes, the proposal will not be accepted and considered closed.

At the time of initial publication, the total circulating supply of GNO is approximately 1,504,587. This is defined as follows: 10M total GNO - (Gnosis Ltd. vesting GNO amount + GnosisDAO vesting GNO amount).

[1] Upon initial publication, for proposals to be accepted in the final phase, there had to be one outcome with a relative majority of GNO used for signaling on the GnosisDAO Snapshot poll accompanied by a quorum of a minimum of 10% of the circulating supply of GNO. After a successful GnosisDAO proposal, this has been changed to require a yes-voting quorum of a minimum of 4%.

Additional Resources

If you have any questions about how to use GnosisDAO platforms, please take a look at the Governance Tutorial. For any assistance in creating GnosisDAO Snapshot polls and Omen Prediction Markets, please feel free to reach out to the GnosisDAO Admin forum moderator or the Gnosis Discord Server.

Many thanks to teams in the ecosystem including Balancer and Uniswap, on which this governance process built.

6 Likes

There are 2 ways to interpret this.
a) at least 10% of 1,384,226 = 138,422 GNO need to vote and within those there needs to be more yes than not votes
b) the yes votes need to reach this quorum AND more yes than no votes

From the text I see both interpretations possible but currently assume a) was meant. I would be though in favor of b) because otherwise a no) vote could result in the decision being made.
Imagine that yes is leading but overall the quorum has not been reached. Now - if you favour “no” it might be the better option to not vote at all. That seems like quite wired incentives and thus we should go for a) in my opinion.

3 Likes

Voting “no” should never increase a proposal’s ability to pass. Currently, both Compound and Uniswap use quorum as the minimum number of “yes” votes required to pass a proposal, I think this is the most reasonable interpretation.

2 Likes

It seems “No” voter (also “Yes” voter to) can move GNO from wallet before voting end and snapshot tool slashing his voting power. It is field for game with quorum metric.

1 Like

My interpretation was b) as the uniswap process was used as an example, which is also assuming YES votes for reaching the quorum. As @monet-supply pointed out, a NO vote should never increase the ability of a proposal to pass. This should be rephrased in the README.

The other important number is the circulating amount of GNO itself. It states 1,384,226 GNO, which is actually not the correct amount but a small typo. The circulating supply should be 10M - the amount of GNO held in vesting contracts (8M for Gnosis DAO, 0.5M for Gnosis LTD), which leads to 1.5M (1,484,226 to be precise) circulating supply. This number should be updated here but also on coingecko and coinmarketcap.

1 Like

The typo has been fixed. The correct circulating supply is 1,504,587 GNO.

While this interpretation more adequately addresses the disincentive of no voters to participate, it introduces a significantly difficult quorum to reach.

Part of this dynamic arises from Snapshot votes being public before the resolution of a poll. I believe the topic of creating outcome-blind polls has been taken up with the Snapshot team, so this topic may be better resolved in this manner. It would also address issues stemming from proposals being nearly decided and thereby making Gnosis Impact less… impactful.

2 Likes

I agree the quorum of 150k GNO Yes votes is difficult to reach. The first snapshot proposal had only 100k GNO used for voting. Maybe we should consider a proposal to lower the threshold to only 5% (75k GNO for YES)?

I also like the idea to have outcome-blind polls: It would allow having a general quorum of YES+NO votes together. I assume it will take quite some time until this is implemented.

1 Like

Agree, the outcome-blind polls will likely take too much additional time.

I’d support a proposal of 4% or 5% circulating supply for yes, as 4% is used in Compound and Uniswap’s governance models.

2 Likes

Created a proposal:

3 Likes

The GnosisDAO Governance Process post has been updated above to reflect a successful GnosisDAO proposal GIP-3: Set the quorum for “yes” votes to 4% of the circulating supply of GNO, which has changed the final phase requirement to a yes-voting quorum of a minimum of 4%.

Important

Recently CoinMarketCap adjusted the circulating GNO supply from 1.1M to the correct 1.5M GNO. Gnosis had previously highlighted to CoinMarketCap that the circulating supply was 1.5 M GNO and therefore their numbers incorrect. However, to conform to their own metrics, the correction was not made, since the missing 0.4 M GNO had never moved wallets since issuance. The tokens belong to early backers/team members of the project.

The circulating supply is relevant for the quorum of GnosisDAO (4% of circulating supply).

2 Likes