Recently we wrote a step by step piece on how DAOs on Fractal can progressively decentralize by extending any Safe treasury with subDAOs and governance. This week, we’re going to focus on how off-chain, Snapshot communities can progressively move their DAO on-chain with Fractal.

Why starting from a Snapshot community is common for DAOs

Many current DAOs start with zero on-chain assets or treasury. Most Web3 communities are brought together by love for a product, shared values, or an inspiring vision. At the height of the bull market, the average gas fee per transaction on Ethereum hit $71. This is steep for DAOs with limited funds.

These two facts helped bring Snapshot into existence. Snapshot innovated by collecting using user’s wallet signatures as votes off-chain. They combined this with a huge array of options for new communities to start with governance (e.g. 1:1 token vote, NFT vote, quadratic vote, weighted vote, etc). The outcome was that DAOs could quickly check the sentiment of their members without the huge gas costs of having the vote actually change the state of the blockchain.

As DAOs start to recover from the bear market and regrow their on-chain assets it’s time for them to increment this status quo. Communities are pushing for more and more transparency into their DAOs’ on-chain decision-making (e.g. see the Arbitrum community’s confusion on the rejected snapshot vote to fund the foundation). Even if smaller working groups still make decisions for the wider DAO, it should still be clear who is making on-chain decisions, what their limitations are, why they have these privileges, and how long these privileges last.

We at Fractal wanted to offer a way for users to get this functionality whilst continuing to use Snapshot day-to-day. First, we’ll cover how users can link their Snapshot space to an on-chain treasury. This allows members to easily view all off-chain proposals and on-chain multisig transactions together in one place. Then we’ll cover how DAOs can add subDAOs and community governance to progressively decentralize this set-up into on-chain decision-making on a project's own timeline. Let’s dive in!

Part #1 - Set up a new Fractal DAO powered by a multisig to view the DAO’s off-chain Snapshot proposals right next to its on-chain activities

To start, we’ll need an on-chain entity to act as the root for our DAO. Start at the Fractal homepage and click ‘Create a Fractal.’

Name your DAO and pick the ‘multisig’ toggle (note, we’ll cover other types of governance like NFT voting later in this post).

Next, there’s an input for ‘Snapshot’. Use the page here from Snapshot to understand how to find your Snapshot space URL and paste it in here. Click ‘Next’ and choose the initial signers for your DAO (note - this is generally 2-6 of your contributors). Then click ‘Deploy’. Once you’ve signed the transaction, voila! You’ve given your Snapshot space a multisig wallet and treasury to execute on-chain transactions.

If you navigate to the DAO home, you can see all your historic Snapshot proposals from within Fractal’s UI (designated by a ‘Vote on Snapshot’ button). Even better, as your DAO makes on-chain transactions with the multisig wallet, they will appear alongside providing transparency for your users of the DAOs entire activities.

Part #2 - Link an existing Safe treasury to an existing Snapshot space

What if - like many DAOs - you have an existing Safe treasury and Snapshot space. You should still start on the Fractal homepage but instead, type your Safe Ethereum address into our nav bar.

Once you’ve clicked ‘View DAO’ a dedicated home page will appear for your existing Safe treasury. Click the three dots in the main component to access the settings page.

The settings page allows you to view and propose changes to your Safe treasury or DAO. If you scroll to the bottom of the settings page, you can find an input to add a ‘Snapshot URL.’

Paste the url for your Snapshot space here and click ‘Propose Change.’ This will create a proposal to add this Snapshot URL to your existing Safe. Once the correct number of assigned members of your multisig have signed, that’s it!

By navigating to the DAO homepage again, the user can now view all historic on-chain Safe treasury activities next to the historic Snapshot off-chain proposals. This is another small step towards greater transparency for DAO members.

Part #3 - Add Fractal subDAOs to the DAO

As DAOs grow, many realize they need to designate certain contributor working groups to continue to operate efficiently. For example, investment DAOs may set up a ‘Portfolio’ working group. A DeFi DAO may establish a ‘Staking’ working group. The community can use Snapshot to vote contributors into these groups. Then these designated groups can execute the will of the community on-chain as subDAOs.

This is why we made it easy to create subDAOs on Fractal to empower and visualize these organizational working group structures.

Users can start by navigating to their DAO hierarchy page. Here they will see an existing Fractal multisig sitting by itself as we left it. However, it has the potential to become the root of a subDAO hierarchy.

By using the three dots, users can ‘Add a subDAO.’ This will take you to a nearly identical flow as we covered in Part 1. The only difference is that this multisig treasury will sit beneath the rootDAO as a subDAO working group. Check out our docs here for step-by-step guidance on how to set up this subDAO’s parameters (including how to make sure the root multisig wallet can optionally pause the subDAO in case of a lack of faith). Once those steps are completed and the proposal is passed, the subDAO is set up.

See above for an example of how one of our early users, AwakeVC, quickly moved from a basic multisig to a complex subDAO hierarchy in only a few hours on Goerli. Each subDAO is an empowered organizational working group that can execute on-chain with agility.

Part #4 - Add on-chain governance to the DAO to progressively decentralize

A further step for many users is to incrementally decentralize by moving some community proposals from Snapshot (off-chain) to Fractal (on-chain). So far, 1:1 token voting (ERC-20) and multisig transactions are available. NFT voting (ERC-721) will be in-app by August 2023. Follow us on Twitter @FractalForDAOs to get the latest updates.

To start, users can navigate to one of the root or subDAOs they created above (note - which root or subDAO holds this governance is an important consideration we’ll come to below). By clicking ‘modify governance’ they’ll kick off a workflow to enable users to choose new governance.

Next users can customize this governance further with on-chain parameters for setting a voting period, quorum, token allocations, token weight (NFT voting only), and more. This workflow can be found at Fractal Docs and should be carefully reviewed by your contributors. Once chosen, the changes will need to be signed by the current multisig members to approve the decision. After that, you’ll have migrated your community to some on-chain community governance.

Conclusion

Although this article is a great start, there are many unanswered questions that will be specific to each decentralizing project. Which rootDAO or subDAO should have community governance? Do users want a community to make election decisions on-chain at the parent level and then have subDAOs execute the day-to-day tasks? Or do users want to take baby steps to get there by having a Snapshot vote and a multisig at the parent level with a subDAO of community NFT voting?

We as the Fractal team can’t tell you the answers to these questions… but we can help guide you with our expertise. The important thing for us is that it’s as easy for any project to create and update its organizational structure and be able to decentralize at any speed. Please reach out to thomas.stuart@decentlabs.io if you’d like to ask questions or go to the app to get started yourself - app.fractalframework.xyz