Empowered DAO Elections

A better way to conduct elections, fortified with security, permissions, and automation

SUMMARY

Transform governance into action with elections that automatically grant permissions and compensation to the winners, enforce term limits, and hold elected positions accountable

Problem

Governance is at the heart in decentralized organizations, but governance is only as effective as its ability to then turn decisions into action. This is where today’s election systems fall short.

Specifically, current DAO election systems lack:

Automated granting of roles & permissions: DAO elections have no way to automatically grant permissions to election winners without requiring that the community trust a group of executors (often multisig signers) to accurately implement the results of the election. This leads to centralization and capture risk.
Automated revocation of roles & permissions: Additionally, DAO elections do not have mechanisms to automatically enforce term limits and revoke roles when eligibility criteria are not met. This leads to arduous manual tracking and human error.

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Solution

Hats Protocol, via our integrations with SnapshotX, Tally, JokeRace, and Decent, offers a better way to conduct elections, fortified with security, permissions, and automation.

Hats enables the following elections use cases:

Electing one person to fill a role from a pool of nominees
Electing a group of addresses to a shared role (e.g., a council or committee) from a pool of nominees

Key benefits include:

Automatically granting permissions based on election results: Automatically granting election winner(s) the onchain and offchain permissions associated with the role
Automatically revoking permissions after terms expire: Automatically revoking the role and associated permissions when the designated term ends or when individuals are no longer eligible

Setting additional eligibility rules for elected roles that are continuously enforced: With Hats, organizations can define a range of specific eligibility criteria required to hold and maintain the elected role, using the rapidly-growing set of open-source eligibility modules and integrations being built using the Hats Modules SDK.

Opportunities

Elect a Security Council and other key roles through transparent onchain elections (Purple)
Appoint roles through DAO governance with built-in compensation via the Decent app (Decent DAO)
Increase protocol security by enabling token holders to govern the protocol if multisig signers were corrupted or MIA (Premia Finance)

1. Elect a Security Council and other key roles through transparent onchain elections

Featured organization: Purple. See their Hats structure here.

Using Hats, Purple ran elections for its Security Council as well as its Grants Chair and Revenue Chair roles through JokeRace in conjunction with the Hats JokeRace eligibility module. Purple token holders had submission and voting rights in the election, and role eligibility was handled by Hats to automatically grant designated powers to the election winners.

Permissions granted to election winners by Hats included:

Security Council: veto DAO proposals if deemed necessary, and set election terms for the Grants Chair and Revenue Chair roles
Grants Chair & Revenue Chair: signing authority on the Grants and Revenue multisigs, respectively, plus compensation streams for each role

Purple's Revenue Chair role was filled based on the results of an election held on JokeRace

By using Hats-powered elections, Purple ensures that permissions such as veto power and multisig signing authority are only granted to those elected by the community, promoting transparency, accountability, and decentralization.

2. Appoint roles through DAO governance with built-in compensation via the Decent app

Featured organization: Decent DAO. See a description of their roles system here.

Decentralized teams using the Decent app can create roles, assign compensation, and grant permissions all within the app, streamlining governance and automating elections. Roles are powered by Hats Protocol, with automated payments enabled via Sablier.

For example, Decent's own DAO appointed two positions through its decentralized governance system — Foundation Director and Legal Counsel — providing the holders of those roles with the authorities and compensation they need to perform their duties.

Decent DAO used Hats to appoint its Foundation Director and Legal Counsel through a DAO proposal

3. Increasing protocol security by enabling token holders to govern the protocol if multisig signers were corrupted or MIA

Featured organization: Premia Finance. See their Hats structure here.

Since its launch in 2021, Premia has relied on a multisig for ownership of its protocol contract and Treasury. As a DeFi protocol, it was seeking a way to give token holders more control over the protocol’s core mechanisms and contracts.

Premia wanted to ensure that the protocol could continue to operate even if the multisig members disappeared or were unable to execute transactions. Using Hats, Premia introduced a structure that enabled token holders to elect parliament members directly via Snapshot and give them the power to execute transactions on the Premia multisig.

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Parliament Members are elected by token holders, and their Hats given them limited signing authority on the Premia multisig

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The system works as follows:

Token holders elect Parliament Members via Snapshot
Winners of the Parliament election are automatically eligible to wear the Parliament Member hat, via the Hats election eligibility module
Parliament Members are granted voting power via Hats in an oSnap-connected Snapshot space that allows them to execute limited transactions in the Premia multisig

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By allowing token holders to elect parliament members that can execute limited multisig transactions if needed, Premia ensures that if the original multisig signatories were suddenly unavailable, the protocol would maintain operational continuity.

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