How to DAO: Drafting Proposals

6 min readMar 4, 2023

Adding instructions and thinking through the details

This is a perfect time to share some ideas around reading and writing proposals. More and more people are getting involved in governance and reading their first proposals. Understanding what they look like and what to think about is extremely important.

In this article, I wont be going into how to create a proposal (this is a great video on how to use Realms by Oyacaro), types of governance across multiple blockchains (I’m focusing on Realms for convenience), and how to read instructions (this is an area that needs significant work and improvement). That being said, this article applies to all decentralized governance; Ethereum, Solana, heck even Aptos (if you can find a DAO there).

We’re focused entirely on how proposals should be prepared and what you should want to read before you vote. People are discussing the Hadeswap proposal written by Lt.Lollipop and wondering how it will impact MonkeDAO , Solana Monkey Business, and Hadeswap.

Well…it depends

There are 2 types of Proposals

Sentiment/Polling Proposals: Proposals without instructions

These are usually votes to see what the community thinks and often require centralized execution. Sentiment proposals mirror real-life voting; the public votes on what has been proposed and the expectation is that government will execute the decision (although there are many examples throughout history where that doesn't happen)

Polling proposals are necessary when the decision cannot be executed on-chain.

The above is an extreme example. If the vote were to pass, the expectation would be that I would shave my beard. It cannot be executed by on-chain processes.

More plausible proposals that would also use polling votes would be

Acquiring or selling off-chain assets (like SolanaMonkeyBusiness IP )
Administrative control of web2 assets like Email and Discord accounts (like transferring discord ownership)

In both instances, there is an element of trust expected in the person executing the will of the community. Although the above examples could one day be executed on-chain, today they cannot (though, sadly, beard trimming may never get there).

Executable Proposals: Proposals with instructions

These are votes that exemplify why DAOs are revolutionary; proposals are binding and completed the moment the vote ends.

The above was a gift sent to the Dean’s List DAO from DualDAO. The moment the vote was executed, the assets were sent to the Dean’s List Treasury in Realms.

Although most proposals today move digital assets, there are also proposals that update programs.

This proposal updates Mango Markets program to use PYTH as an Oracle for the price of BONK. The moment the vote passes, the update is executable. MangoDAO is particularly exceptional; virtually all of their proposals come with instructions!

Hybrid Proposals

Will Lolli buy a Happy Meal with the money? Will it ease his angst? How can we know for sure? All we can do is trust!

Many proposals can be a hybrid; they have instructions but still require trust in execution. These kind of proposals usually transfer assets with an expectation of a specific execution.

“when these tokens go here, they will be used for this”

Even with the best intentions, these proposals have room for error and misinterpretation.

Poorly Prepared Proposals

Here are a few examples of proposals that could be improved

1) Work Proposals

Proposals that mention transfer of assets should have the transfer in the instructions.
Proposals for work are problematic when they don't include a transfer token instruction. What happens if the vote passed today, Malachi did the work, and then LATER the proposal to actually send the tokens failed? These are not employment contracts!
This was posted ON BEHALF of the service provider! Imagine if he didn't even volunteer for this work, and THEN he got paid for something he didn't even want to do! A better approach would be to have Malachi submit the proposal on his own behalf
An even better way to do work proposals is to use streaming payments, sometimes utilizing claw-back mechanics like in Mango’s Grant plug-in

2) Asset Swaps

This proposal is a good example of what can and cannot be done on-chain. There are elements that could be executed on-chain; like the transfer of update authority, the 5 SMBs, the royalties, and the payment of $100,000 USDC. The transfer of IP would need to be done off-chain

This proposal assumes that the MonkeDAO would accept this proposal! If it passed, there is no way to enforce the transfer of those on-chain assets
DAO2DAO asset swaps are possible, but currently not supported in the Realms UI
This is a sentiment vote on Hadeswap ownership, but based on the issues presented above, best to be abandoned

3) Workflow Details

This branding proposal is simple, but is extremely complex when you try figuring out the details of what happens next

If the vote passes, what needs to be changed? I’ll make the assumption that there needs to be a new logo, new Twitter, new domain, updated documentation, and the issuance of a new token to mention a few
Who is going to do all of that work? How much compensation will they expect?
What is the timeline to complete this rebranding? Are their any caveats where this becomes a bad decision in retrospect?
This is an example of a sentiment proposal, but with wide room for misinterpretation. If the cost to rebrand was $10,000 USDC, would we still do it?

That controversial proposal

We now have learned that proposals without instructions are best used for measuring sentiment in a community, and in some instances, used when there is no way to execute a decision on-chain.

The issues with this proposal

We don’t know if the holder of the update authority will comply with this proposal. There is no public conversation to suggest the update authority has even stated that they would
This could have been executed on-chain
If the vote passes, nothing happens

I hope this article inspires you to get more involved in decentralized communities. There are many great DAOs across Solana, and a few with proposal thresholds low enough for you to start participating at the highest level of governance.

As of writing:

$252 @ Dean’s List — https://app.realms.today/dao/Dean's%20List
$2000 @ Mango — https://app.realms.today/dao/MNGO
$513 @ PsyFinance — https://app.realms.today/dao/PSY
$350 @ GRAPE — https://app.realms.today/dao/GRAPE
$596 @ Imperium of Rain — https://app.realms.today/dao/DTP
$11400 @ Hadeswap — https://app.realms.today/dao/Hadeswap%20Governance

You reached this far! Here is a rare Discord invite to Dean’s List DAO, a ServiceDAO for Web3 power users providing feedback sessions and marketing services. Learn more here on https://www.deanslist.services/