Introduction
Futarchy-as-a-Service is about to go live soon. So I thought it would be helpful if we released a governance proposal guide for DAOs. Here’s everything you need to know to have excellent proposals:
- Use proposal categories and templates
- Communication is key
- Multisig signer is a real job, treat it as one
- Make the ROI clear
- Double-check proposal instructions
Use proposal categories and templates
For any given proposal, you’re likely going to want a lot of the same information. For example, if you’re using futarchy to allocate grants, you probably want each grant application to contain a grantee, a budget, and how the funds would be spent.
Standardizing this in the form of a template can help ensure that proposers include all the required information. At MetaDAO, we use four templates for four different types of proposals, as covered by the proposal section of A Futard’s Guide to MetaDAO.
Communication is key
A market can only be as efficient as the information it can ingest. Futarchy doesn’t work if the organization works behind a black box with no communication to the community. So proposers need to communicate.
For project proposals — things that aren’t done the second the proposal executes — we recommend proposers publish weekly updates in some common space (e.g., a discord channel). This allows the market to cancel projects that aren’t delivering on a reasonable timeline. Whatever the cadence, it should be defined in the proposal.
Multisig signer is a real job, treat it like one
Sometimes, you’ll want to appoint a multisig to handle a proposal’s execution. For example, if a proposal has milestone-based payments, you may want to appoint a multisig to pay out when the milestones are reached.
We learned in a rather painful way the pitfalls of multisig signer being treated as a casual affair rather than a real job. Especially for multisigs that need to execute complex instructions, signers should be examining and simulating instructions to make sure that what’s executed is what’s supposed to be executed. It may be worth vetting and paying signers, depending on the complexity and degree of risk involved.
Make the ROI clear
Because “supporting” a proposal requires putting real capital at risk, it’s harder to get wishy washy proposals through a futarchy than a voting DAO. As a proposer, it’s your job to convince the market of your proposal’s positive impact.
For example, when Nallok and I raised the Futarchy-as-a-Service (FaaS) proposal to MetaDAO, we provided financial models that would allow market participants to estimate FaaS’s impact on MetaDAO’s business.
Double-check proposal instructions
Of course, you’ll want to double-check that your proposal’s instruction can be executed. You can do this by replacing the instruction in the test suite with your own. In the long-term, we plan to add proposal simulation so that you don’t need to do this.
Conclusion
This was supposed to be a short and sweet guide to raising proposals. Feel free to reach out if you have any questions!
