Using oSnap for Optimistic Governance

Summary

oSnap is a governance tool, developed by UMA, that allows for automatic onchain execution of transactions after successful Snapshot votes.

Abstract

oSnap streamlines the execution of governance decisions and would bring a new layer of efficiency and reliability to Swell DAO. oSnap would enable $SWELL voters to voice their opinion through gas-less voting on Snapshot whilst enjoying onchain execution for successful snapshot votes. This requires minimal effort and no disruption to existing DAO governance processes. UMA even covers the onchain execution costs for every oSnap proposal.

oSnap secures over $500M for mature DAO treasuries including CoW Protocol, Across, Arbitrum and Shapeshift. oSnap was built by UMA, an experienced leader in optimistic verification. UMA’s optimistic oracle currently secures $1B of TVS across bridges, prediction markets and governance tools.

Implementation Overview

oSnap is a module that is added to a Safe with rules on how to evaluate a Snapshot proposal. The oSnap Safe app lets you add oSnap to your Snapshot space and Safe in a few minutes with no developer time required.

Once oSnap is enabled, Snapshot proposals have the option to include transaction data when creating a Snapshot proposal. After a successful Snapshot vote, transactions are proposed onchain and verified before being executed by the Safe. This reduces the reliance on multisig signers and enables Swell DAO to be more decentralized.

Here are examples of where oSnap could streamline the governance process:

  • Disbursement of funds (payments to service providers or grants)
  • Reallocation of funds to AVS strategies
    • This enables LRTs to leverage their collaboration with AVS risk providers for strategic planning and reduce the manual coordination required from the DAO to reallocate funds based on a DAO vote
  • Add or remove LP

Any transaction that can be executed through a Safe can be included in a Snapshot proposal and executed through oSnap with no gas costs to vote or execute the transaction.

Benefits

The benefits of Swell adopting oSnap are:

  • Transaction payloads included in proposals that are approved by voters are trustlessly and permissionlessly executed which increases transparency and decentralization.
  • Automatic transaction execution by UMA bots is faster than waiting for multi-sig signers along with the bot paying the gas costs for execution. The gas cost of the transaction execution is paid for by these bots instead of the multi-sig signers.

UMA has also focused significant resources on monitoring efforts:

  • The same bot that proposes and executes transactions also automatically disputes inaccurate proposals if the following criteria are not met:
    • The proposed onchain transactions match the transactions that were approved in the Snapshot proposal
    • The Snapshot proposal passed with the minimum parameters specified (majority in favor, meets minimum voting period and quorum)
    • The proposal follows the strategy specified in the Snapshot space.
  • Proposals are included in the UMA Oracle UI which is the same interface used by disputers verifying and disputing for other third-party integrations (Polymarket, Sherlock, Cozy, and other oSnap integrations).
  • UMA sponsors a verification program, that pays UMA community members to verify all optimistic oracle assertions So when any transactions are proposed through oSnap, a Discord ticket is automatically created and an experienced verifier from the UMA community completes a multi-step verification process that focuses on areas such as the transaction payload matching the intent of the proposal, verifies transactions do not include interactions with malicious contracts, etc.

UMA created and maintains oSnap as a public good with no implementation or usage fees because we believe decentralized governance tools are critical to the entire Web3 ecosystem. Since UMA is already running robust monitoring across all of our optimistic oracle integrations and can recycle the bonds posted, the additional costs associated with these services are negligible and it is sustainable to continue providing this service for DAOs. If any changes were to be made in the future, we are committed to having existing DAOs not face any changes (aka be “grandfathered in”).

Drawbacks

While oSnap has been audited by Open Zeppelin, as with any system, there may be unforeseen vulnerabilities.

Additional Resources

6 Likes

I’m surprised there has been no responses here.

Although oSnap seems like an okay tool to skip requiring a multisig to execute on a proposal that passes, I can’t imagine that a protocol with over $3 billion in TVL would use it.

Decentralized: this solution is not decentralized and puts the Swell team and potentially UMA team (depending on their governance) at regulatory and legal risk.
Trustless: this solution has 2-3 trust assumptions: Snapshot is offchain using a central server, this makes it trusted. UMA token holders and/or the core team then have decision rights over disputes? and finally there is a multisig that typically owns permissions over changing these parameters?

Futhermore, Gabe Shapiro outlines in this article some of the problems related to UMA as a dispute resolution mechanism.

I don’t believe Swell should put these protocols and their funds at risk by providing ownership over disputes to a third party token and community.

If oSnap were used for a small committee over a small amount of funds within Swell this could make sense. The value prop seems to be optimistic execution for offchain voting. Not trustless and certainly not for so much at stake!

Appreciate the proposal however.

4 Likes