DAO Governance

Complete guide to participating in and managing DAO governance.

Understanding DAO Governance

What is Governance?

DAO governance is the process by which community members make collective decisions about the organization's direction, treasury, and operations through voting mechanisms.

Governance Principles

• Decentralized: No single authority controls decisions

• Transparent: All proposals and votes are public

• Community-Driven: Members have equal voting rights

• Automated: Smart contracts execute approved decisions

Participation Requirements

Basic Requirements

• ✅ NFT Ownership: Hold at least one NFT from the collection

• ✅ Wallet Connection: Connected Hyperliquid-compatible wallet

• ✅ Voting Period: Hold NFT during active voting period

Voting Power

• 1 NFT = 1 Vote: Equal voting rights for all members

• No Delegation: Direct voting only (for now)

• Snapshot System: Voting power captured when proposal is created

Proposal System

Creating Proposals

Access Proposal Creation

1. Go to Collection Page: Navigate to your DAO-enabled collection

2. Click "DAO" Tab: Access governance interface

3. Click "Create Proposal": Available to all NFT holders

Proposal Types

Treasury Proposals

{
  "type": "treasury",
  "title": "Community Marketing Campaign",
  "description": "Allocate 10 HYPE for targeted social media advertising",
  "amount": "10000000000000000000",
  "recipient": "0x1234...abcd",
  "justification": "Increase collection visibility and attract new holders"
}

Parameter Proposals

{
  "type": "parameter",
  "title": "Adjust Voting Quorum",
  "parameter": "quorumPercentage",
  "currentValue": 10,
  "newValue": 15,
  "justification": "Increase community participation requirements"
}

Contract Proposals

{
  "type": "contract",
  "title": "Upgrade Collection Contract",
  "contractAddress": "0x5678...efgh",
  "upgradeType": "security_patch",
  "justification": "Fix potential vulnerability identified by audit"
}

Proposal Requirements

• Minimum NFTs: Usually 1-5 NFTs required to propose

• Deposit: Small HYPE deposit (returned if proposal passes)

• Clear Description: Detailed explanation of changes

• Feasibility: Technically and financially viable

Voting Process

How to Vote

1. Find Active Proposals: Check "Proposals" section in DAO tab

2. Review Proposal Details: Read title, description, and justification

3. Cast Your Vote:

   • For: Support the proposal

   • Against: Oppose the proposal

   • Abstain: Neutral position

Voting Timeline

Day 1: Proposal created and voting begins
Days 1-7: Community voting period
Day 8: Voting ends, results calculated
Day 9: Proposal executed (if approved)

Vote Confirmation

• Transaction Required: Each vote costs minimal gas

• Irrevocable: Votes cannot be changed once cast

• Public Record: All votes are visible on-chain

Decision-Making Rules

Quorum Requirements

• Minimum Participation: Usually 5-20% of total NFTs

• Why Required: Ensures decisions represent community will

• Calculation: Based on total circulating supply

Approval Threshold

• Simple Majority: 50% + 1 vote (most common)

• Super Majority: 66% or 75% for important decisions

• Unanimous: Rare, only for critical changes

Execution Conditions

• ✅ Quorum Met: Minimum participation achieved

• ✅ Approval Threshold: Required majority reached

• ✅ No Technical Issues: Smart contract can execute

• ✅ Timelock Passed: Waiting period completed

Treasury Management

Treasury Overview

• Community Controlled: Majority funds managed by DAO

• Transparent: All transactions visible on-chain

• Proposal-Based: Spending requires community approval

Fund Allocation Process

1. Proposal Submission: Member proposes fund allocation

2. Community Review: Discussion and feedback period

3. Voting: Community votes on proposal

4. Execution: Approved funds are transferred

Treasury Categories

• Marketing: Advertising and promotion

• Development: Platform improvements

• Community: Events and giveaways

• Reserve: Emergency and future funds

Staking and Rewards

NFT Staking

• Purpose: Increase governance participation

• Benefits: Boosted voting power, rewards

• Process: Lock NFTs in staking contract

Staking Rewards

• Distribution: Regular reward payouts

• Source: Treasury allocation or protocol fees

• Calculation: Based on staking duration and amount

Unstaking Process

• Lock Period: Minimum staking time required

• Cooldown: Waiting period before withdrawal

• Rewards Claim: Automatic reward distribution

Governance Best Practices

For Proposal Creators

• Clear Communication: Explain proposal benefits clearly

• Data-Driven: Support claims with data/evidence

• Community Benefit: Ensure proposal helps all members

• Feasibility: Technically and financially realistic

For Voters

• Research First: Understand proposal implications

• Long-term Thinking: Consider future impact

• Active Participation: Vote on important proposals

• Stay Informed: Follow proposal discussions

For DAO Maintainers

• Regular Communication: Update community on governance

• Proposal Quality: Encourage well-researched proposals

• Participation Incentives: Reward active members

• Education: Help members understand processes

Common Governance Scenarios

Marketing Campaigns

Proposal: "Allocate 15 HYPE for Twitter advertising campaign" Discussion: Target audience, expected reach, success metrics Voting: Community decides if campaign aligns with goals

Development Funding

Proposal: "Fund new collection website development" Discussion: Feature list, developer credentials, timeline Voting: Technical and design evaluation

Partnership Decisions

Proposal: "Partner with gaming platform for NFT integration" Discussion: Partnership terms, benefits, risks Voting: Strategic alignment assessment

Monitoring Governance

Key Metrics

• Participation Rate: Percentage of NFTs voting

• Proposal Success Rate: Approved vs rejected proposals

• Treasury Health: Fund allocation efficiency

• Community Satisfaction: Feedback and sentiment

Regular Reviews

• Monthly Reports: Governance activity summaries

• Proposal Analysis: Success/failure case studies

• Parameter Tuning: Adjust governance settings

• Community Feedback: Gather improvement suggestions

Troubleshooting

Cannot Create Proposal

Issue: "Insufficient voting power" Solution: Ensure you hold required NFTs

Issue: "Proposal threshold not met" Solution: Check minimum NFT requirements

Vote Not Counting

Issue: "Vote transaction failed" Solution: Check gas limit, retry transaction

Issue: "Already voted" Solution: Each address can only vote once per proposal

Proposal Not Executing

Issue: "Proposal approved but not executed" Solution: Check execution delay period, contact support

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Active participation in DAO governance ensures your voice matters in the collection's future! 🗳️