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Onchain governance is an essential aspect of blockchain technology, enabling decentralized decision-making and management of protocols and decentralized autonomous organizations (DAOs). It ensures that blockchain network rules and policies are transparent, democratic, and efficiently enforced.
Many governance solutions have been developed over the past years; however, Safe has continued to be a critical element for most onchain organizations as it provides unprecedented custody and control options. This blog will highlight how third-party tools like Snapshot and Hats can be combined with a Safe {Wallet} to create a secure and effective onchain governance system.
This blog is part of a series of Web3 Financial Operations guides and case studies produced by FinOps3. Explore all FinOps3 tools and content on the FinOps3 Platform.
Onchain governance consists of various elements such as Accountability, Decision-Making, and Trust. Safe plays a crucial role in enhancing governance by providing secure multi-signature wallets, robust access control, and seamless integration with third-party tools like Snapshot and Hats.
Snapshot is a widely used offchain voting system that enables stakeholders to vote on proposals without incurring gas fees. When accessed via the Snapshot Safe App, it’s possible to create and manage a Snapshot Space (the admin page of the organization) through a Safe {Wallet}. As a result, significant Snapshot Space changes, such as selecting which voting strategies are active and vote-related parameters are managed by the Safe {Wallet} instead of one or more individuals.
When integrated with Safe through SafeSnap, it is possible to have Snapshot Space be entirely in charge of Safe’s transactions. This setup allows token holders to manage a Treasury or Protocol without needing to elect and track Safe {Wallet} signers. It is seen as one of the most efficient yet decentralized onchain governance setups. To get started with SafeSnap, visit the SafeSnap documents.
Hats is a permission management protocol allowing DAOs to assign and manage roles dynamically. Integrating with Safe, Hats ensures that role assignments and permissions are securely managed and enforced. This dynamic role management capability is crucial for maintaining an adaptable and responsive governance structure.
In practice, you can create a top hat controlled by your organization admin, who assigns different roles (hats) to contributors. The hats can include the ability to sign one or multiple Safe {Wallets} and can be revoked by the top hat in case the contributor is no longer involved or doesn’t act on behalf of the organization. Getting started with Hats is simple and can be done for free via the Hats protocol website.
The combination of Safe, Snapshot, and Hats creates a robust governance ecosystem. Safe provides foundational security and access control, Snapshot facilitates efficient and low-cost voting, and Hats enables dynamic and secure role management. Together, these tools ensure that onchain governance is secure, transparent, and adaptable, allowing blockchain networks and DAOs to operate smoothly and effectively.
FinOps3 is a platform and knowledge hub for Safe-powered on-chain finance. It aims to accelerate the adoption and retention of Treasury Managers and Financial Operators in the Safe Ecosystem by providing resources and guidance that make setting up and running a Treasury Management System powered by Safe easy and rewarding.
