Victor Ugochukwu · Oct 27, 2020 . 6min read
Snapshot’s off-chain voting to get on-chain settlement function with Aragon and Balancer support
Balancer Labs and Aragon associate to provide support to Snapshot with the on-chain settlement for off-chain voting.
By Victor Ugochukwu · Oct 8, 2020 . 7min read
The formidable alliance between Aragon Association and Balancer Labs has decided to give Snapshot the support it deserves in bringing on-chain settlements to off-chain token holder polling.
Aragon is an Ethereum dapp that allows anyone to create and manage a decentralized organization – DAO. As per the Snapshot announcement, Aragon Association will provide $100k worth of ANT (Aragon native token) and work with Balancer team which will also be supporting with $100k worth of BAL tokens for Snapshot development and funding bounties.
Interestingly, Aragon touts Snapshot to become the Holy Grail of off-chain polling with on-chain execution for decentralized protocols. Balancer Labs led by Fabien Marino created Snapshot to help in addressing the expensive nature in conducting on-chain polling. Usually, most DeFi protocols allow for community governance for members who hold protocol-native tokens. However, these on-chain protocols activities can be seen to stretch Ethereum capacity to its limits. And as Ethereum network becomes clogged up, so are transaction fees rising. It becomes even difficult to conduct simple polling on the network without incurring painful transaction costs like a transaction normally costing just a few cents rising to as much as $30.
This is what led to Fabien Marino exploring the possibility of an off-chain which costs less and scales more but with the added security of on-chain settlements.
Super DeFi Protocols already using Snapshot’s, Aragon makes the on-chain settlement a reality.
The norm with token holders polling on protocols is usually a multi-sig of trusted community members has execution powers over a protocol or treasury. However effective this is, it also comes with risks. If anything goes wrong, the social capital and reputation of those with multi-sig permissions are at stake. Also, moral hazards can happen where multi-sig holders act in their own interest or fail to implement community decisions.
With Aragon coming on board and contributing to Snapshot’s codebase as well as Balancer, a DAO replaces the multi-sig. Aragon has dubbed the process “optimistic execution”. It means no need for performing an expensive computation on-chain. Instead, anyone can directly submit a polling result along with some collateral to back their position as correct. Also, anyone has the freedom to challenge such a result. And if they can prove their claims, they can also get to claim the collateral attached to the faulty result.
Snapshot is already gaining traction in terms of adoption. Both Aave and Yearn communities are already leveraging Snapshot for off-chain voting. And with Aragon Court now present, off-chain polling with on-chain settlement a reality. It hopes to make it a governance standard for token holders voting that can be replicated and used by other protocols.
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Victor Ugochukwu · Oct 26, 2020 . 5min read