MolochDAO Framework

The MolochDAO Framework is a set of audited, minimalist Ethereum smart contracts that enable the creation of decentralized autonomous organizations (DAOs) for pooled funding and grantmaking. Originally built for the MolochDAO—a collective funding Ethereum 2.0 development—the framework codifies a ragequit mechanism, where members can exit with a proportional share of the DAO's assets if they disagree with a proposal. Its core innovation is using tribal coordination and exit rights to solve the "free-rider problem" in public goods funding, making it a foundational primitive for minimal viable DAOs.

The framework operates on a share-based membership model. Members contribute a stake (typically in ETH or a designated token) to join and receive non-transferable shares, which represent both voting power and a claim on the guild bank's treasury. Proposals—such as funding a project or adding a new member—require a deposit and are voted on by share-weighted voting. A key security feature is the grace period, a delay between a proposal's passage and its execution, during which dissenting members can ragequit by burning their shares for a proportional amount of the treasury, protecting minority interests.

Its minimalist design makes the MolochDAO Framework highly gas-efficient and auditable, leading to widespread forks and adaptations. Notable derivatives include MetaCartel Ventures (a for-profit DAO for early-stage web3 investments) and The LAO (a venture DAO structured for legal compliance). The framework's core contracts handle proposal management, voting, and asset safekeeping in a single, integrated system, establishing a standard template for DAOs prioritizing transparent, member-aligned capital allocation over complex governance features.

The name MolochDAO is a direct reference to Moloch, a Canaanite deity associated with child sacrifice, famously invoked in economist Mancur Olson's 1965 book The Logic of Collective Action and later by computer scientist Scott Alexander in his 2014 essay, Meditations on Moloch. In this context, Moloch represents a coordination failure or a multi-agent game where individual rational incentives lead to a collectively disastrous outcome for all participants, a scenario also known as a multi-polar trap. The framework's creators, Ameen Soleimani and the SpankChain team, chose this name to explicitly frame the core problem the DAO aims to solve: overcoming these destructive coordination failures in decentralized ecosystems.

The framework originated in early 2019 as a Minimal Viable DAO (MVD) built specifically to fund Ethereum infrastructure projects, most notably the Eth 2.0 client teams. Its design was a direct, pragmatic response to the perceived inefficiencies and high transaction costs of earlier, more complex DAO models. The primary innovation was the ragequit mechanism, which allows members to exit with a proportional share of the guild bank's assets if they disagree with a funding proposal. This introduced a powerful new exit-based governance primitive, shifting the dynamic from pure voting to a system where capital allocation signals are backed by direct economic consequence.

The philosophical origin of MolochDAO is deeply rooted in crypto-economic game theory and the public goods funding problem. It operationalizes the idea that proper mechanism design can align individual incentives with collective good, effectively "slaying" the Moloch of coordination failure. The framework's stark minimalism—embodying principles like proposal scarcity through a single, non-delegatable share structure—was intended to make coordination failures glaringly obvious and costly, forcing participants to find cooperative equilibria. This design philosophy has made it a template for hundreds of grant-giving DAOs and investment clubs across the Web3 space.

The MolochDAO framework is a minimalist, open-source smart contract system designed for coordinating capital and collective action within decentralized autonomous organizations (DAOs). Its core innovation is the ragequit mechanism, which allows members to exit the DAO at any time by burning their shares to claim a proportional amount of the treasury's assets. This creates a powerful alignment mechanism, as dissatisfied members can leave with their funds rather than being forced to fight for control, reducing internal conflict and governance attacks. The framework was originally built for the Ethereum blockchain and is defined by its stark simplicity and focus on security.

Governance in a Moloch-style DAO operates on a one-share-one-vote basis, where members hold non-transferable shares representing both voting power and a claim on the treasury. Proposals—such as funding a grant, adding a new member, or swapping treasury assets—are submitted by members and enter a grace period for discussion. A formal voting period follows, requiring a majority of shares to pass. The entire process is trust-minimized and executed on-chain, with proposals automatically enacting if approved. This structure makes it particularly suited for grant-making DAOs and small, focused working groups where clear accountability is required.

The framework's architecture is intentionally minimal to reduce attack surfaces and audit complexity. Key smart contract functions include submitProposal, submitVote, processProposal, and ragequit. This simplicity has made it a foundational DAO primitive, inspiring forks and adaptations across the ecosystem. While later frameworks like Compound's Governor introduced more complex features (e.g., token-weighted voting, delegation, timelocks), Moloch's design philosophy prioritizes security and exit rights above all else, establishing a gold standard for minimal viable DAO infrastructure.

Moloch v2 is a modular smart contract framework for decentralized autonomous organizations (DAOs) that evolved from the original MolochDAO to address its limitations in capital efficiency and proposal flexibility. The core innovation is the separation of voting shares from loot, or non-voting economic interest. This allows members to hold economic stake without diluting governance power and enables the DAO to manage a multi-asset treasury, including any ERC-20 token. The framework is defined by its minimalist, battle-tested codebase, which prioritizes security and gas efficiency.

A key mechanism introduced in v2 is ragequit, which allows members to exit the DAO at any time by burning their shares or loot to claim a proportional amount of the treasury's assets. This creates a crucial pressure release valve, aligning incentives and allowing members to dissent by exiting if they disagree with a passed proposal. The proposal system was also overhauled, supporting not just grants but also complex transactions like token swaps, payroll, and contract interactions through its Guild Bank and WrapNZap functionality, making the DAO a more active economic agent.

The framework's design emphasizes exit over voice, reducing governance friction by making it easier for members to leave than to fight contentious proposals. This principle, along with features like tributing (contributing capital for shares) and grace periods for proposal voting, has made Moloch v2 a foundational primitive. It has been forked and adapted to launch numerous notable DAOs, including The LAO, MetaCartel Ventures, and Venture DAO, establishing it as a standard template for investment clubs, grant-making collectives, and project treasuries in the Ethereum ecosystem.