Accounts can be imported into multiple interfaces to solve different use-cases, which creates healthy competition among 3rd party providers and prevents lock-in.
Zooming in on DAOs: extensible through avatars & modules
Safe has become the de-facto standard for DAO treasury management and can be extended to be used with more sophisticated governance frameworks that go beyond a set of multi-sig signers.
The MVP of a DAO is often a group chat (discord, telegram) with a shared “bank account”. Safe enables pseudonymous groups, across jurisdictions, to pool and manage funds within minutes. Establishing a traditional joint bank account on the other hand often takes weeks or months, and in some instances, individuals from different jurisdictions couldn’t manage a bank account together.
Safes as avatars — extensible towards progressive decentralization
More generally Safes can be thought of as avatars for groups but also individuals, which allow for the pattern of various governance primitives being used for decision-making, which can then be executed through Safe. A group within Gnosis, Gnosis Guild, emerged to build Zodiac, a set of modules to make Safe composable with various governance tools and methodologies.
This design pattern separates account logic (“avatars”) from decision making logic to make it easy for orgs to scale due to modularity. This means that practices around governance, membership, and treasury management can be adapted independently of any of the tools a DAO uses, customizing the set-up easily as an organization and its needs change.
Progressive decentralization could take the following exemplary form:
Simple multi-sig for small groups
Initially, a team deploys a Safe multi-sig account to manage shared resources with 4/6 signatures required to execute a transaction. As the community grows, the opinions of the wider group in chats like discord or telegram are taken into account by the signers.
Scaling community with a token & minority protection
Often a token becomes the next step for bootstrapping funding, to create incentive alignment, to reward value creation and to widely distribute governance rights. Since token-voting on-chain is costly, many DAOs resort to off-chain voting via Snapshot, while votes are then executed on-chain via a multi-sig transaction. A first vote could define an altered set of multi-sig signers or give increased legitimacy to an existing one. In this set-up there is still trust in the multi-sig signers necessary.
They can further implement the Zodiac exit module, a modular exit mechanism similar to MolochDAO’s rageQuit functionality. This represents a crypto-native minority protection, since there is always the option to leave a DAO (and receive one’s share of the treasury), if there is a vote being forced by a majority or not implemented correctly by the multi-sig. Due to the considerably decreased risk, it lowers the barriers to participate in the first place, which should unlock a lot of value for collaboration. Here, the delay mod is also useful in order to provide some time for members to react to a malicious or contentious transaction that has been initiated but can only be executed after some time.
Reality oracle for on-chain execution of off-chain votes
In order to make the org. less dependent on multi-sig signers, they can use the reality mod in order to have e.g. off-chain Snapshot proposals and Discord polls to trigger on-chain Safe transactions which are executable by anyone. An escalation-game based oracle brings off-chain data on-chain in this mechanism prev. known as SafeSnap. In order to protect against exploits, the addresses and functions which can be called can be limited by the scope guard.
Once the org. has tested the set-up thoroughly, they can choose to remove the multi-sig signers in order to transition fully to the governance mechanism (e.g. token-voting through snapshot) of their choice. (note: Snapshot is also working on a new, more trust-less variant “Snapshot X”).
Custom cross-chain extensions & advanced governance frameworks
As an organization matures further, more specialized governance mechanisms could make sense for a project. Such frameworks might live on chains with lower fees such as Gnosis Chain (prev. xDAI) or rollups, which can interact with Safes on other chains (e.g. mainnet) through the arbitrary message bridge and bridge module (AMB), leveraging their unique permissions & voting methods for Safe governance. Notable examples of projects building for cross-chain composability with Safe: 1hive gardens allow for e.g. conviction voting, community covenants & dispute resolution based on such. Colony allows for e.g. sustainable social decentralization and more agile decision-making at the edges of an organization by leveraging sub-DAOs with a reputation model (akin to non-transferable “soulbound” tokens).
Bridges however remain a space of ongoing research and development. Similar to multiple other simple bridges, the AMB is currently reliant on a set of trusted multi-sig signers. Thus the Gnosis teams are working to integrate a more trust-minimized, though still efficient and easily implementable optimistic bridge with the Zodiac Nomad module, that similar to optimistic rollups rely on fraud proofs, making them secure as long as there are at least 1/n honest actors scanning for frauds. Further GnosisDAO is vouching for supporting research in zero-knowledge cryptography based bridges in a current governance vote.
Safe is on a mission to unlock digital ownership for everyone in web3 including DAOs, enterprises, retail and institutional users by establishing a universal standard for custody of digital assets, data and identity with smart contract based accounts.
We are proud to be able to collaborate with Richard, Lukas, Christoph, Tobias and the Safe community which has been working together for many years at the Gnosis parent organization that transformed into GnosisDAO. Various strategically relevant products are being developed and maintained by them and other related spin-outs: CowSwap (DEX aggregation protocol), Gnosis chain (scalable PoS EVM chain, previously xDAI) and Gnosis Guild (governance modules), which tie into the strong ecosystem of players building with and on Safe.
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