Minimum Approval

Compound's governance uses a minimum approval threshold of 400,000 COMP tokens. This is a fixed quorum requirement, meaning a proposal must receive at least this many 'for' votes to pass, regardless of total supply participation. This model ensures a baseline level of stakeholder consensus is always required.

• Proposal Type: All governance actions (parameter changes, upgrades).
• Key Feature: Fixed quorum prevents low-turnout proposals from passing.
• Security Implication: A high threshold protects against malicious proposals but can also lead to voter apathy for non-critical changes.

Uniswap introduced a dynamic quorum mechanism, where the minimum approval threshold adjusts based on voter turnout. The required 'for' votes are a percentage of the circulating supply, calculated as: quorum = min(4%, max(0.5%, 0.5% + turnout * 0.5%)).

• Adaptive Security: The threshold scales with community engagement.
• Pro-Consensus: Makes it harder for a small, highly motivated group to pass proposals during low turnout.
• Real Impact: This system aims to balance security with proposal viability, preventing stagnation.

Aave governance separates the minimum approval into two distinct phases, each with its own threshold.

• Proposal Threshold: A creator must have 80,000 AAVE (or delegated voting power) to submit a proposal, ensuring proposal quality.
• Quorum (Execution Threshold): A proposal needs a minimum of 320,000 AAVE voting 'for' to be eligible for execution. This two-tiered system filters out spam and ensures only widely supported proposals reach the execution stage.

MakerDAO uses a flexible minimum approval system where the threshold is set per-proposal type within its governance polls. For example:

• Executive Votes (code changes): Require a majority of participating MKR and a high quorum.
• Governance Polls (sentiment checks): Have a lower approval threshold, acting as a signaling mechanism.
• Key Insight: This allows the DAO to apply stricter security to high-risk executive actions while maintaining agility for community sentiment gathering.

Snapshot, a gasless voting platform, allows DAOs to configure their own minimum approval logic using various strategies. This showcases the parameter's versatility.

• Common Strategies: Fixed quorum (e.g., 1M tokens), percentage-based quorum (e.g., 5% of supply), or relative majority (simple majority of votes cast).
• DAO Customization: Each community can tailor the threshold to its size, token distribution, and risk tolerance.
• Example: A small NFT DAO might use a low fixed quorum, while a large DeFi protocol uses a high percentage-based threshold.

Setting the minimum approval threshold involves a fundamental trade-off that all governance systems must navigate.

• High Threshold (e.g., 10% of supply): Maximizes security by requiring broad consensus, but risks governance paralysis where no proposals can pass due to low voter turnout.
• Low Threshold (e.g., 1% of supply): Increases proposal viability and participation, but lowers the security barrier, making the protocol more vulnerable to attacks by a motivated minority.
• Best Practice: Protocols often adjust this parameter over time based on voter behavior and protocol maturity.

Minimum Approval is the minimum number or percentage of 'Yes' votes a governance proposal must receive to be considered passed. It is a critical quorum mechanism that prevents a small, unrepresentative group from making decisions on behalf of the entire token-holder community. This parameter is typically set as a percentage of the total voting power or a fixed number of tokens.

A properly configured Minimum Approval threshold protects against low-turnout attacks, where a malicious actor could pass a proposal during a period of low voter participation. If set too low, it compromises sybil resistance. If set too high, it can lead to governance paralysis, where no proposals can pass, creating a different security risk. It must be balanced with Minimum Quorum requirements for robust security.

The threshold creates strategic incentives for voters. A high bar encourages coalition building and active campaigning to reach consensus. It can also lead to voter apathy if the threshold seems unattainable. Conversely, a low threshold may reduce the perceived importance of individual votes, discouraging participation. The setting influences whether voting is a coordination game or a token-weighted poll.

The Minimum Approval is often a mutable parameter, adjusted via governance itself. Real-world examples:

• Compound Governance: Proposals require a 400,000 COMP quorum, but passage requires a majority of votes cast (simple majority of quorum).
• Uniswap: Early proposals required 40 million UNI (4% of supply) to pass.
• Aragon Client: Allows DAOs to set a precise support percentage (e.g., 50% + 1 vote).

Minimum Approval does not operate in isolation. Its effectiveness depends on:

• Minimum Quorum: The minimum total voting power that must participate.
• Voting Delay & Period: The time windows for voting.
• Delegation: How voter power is pooled. A proposal may meet Minimum Approval but fail due to insufficient quorum. These parameters form a multi-layered defense for on-chain governance.

Poorly configured thresholds can lead to specific attack vectors:

• Proposal Spam: Low thresholds allow spam proposals to pass during low-activity periods.
• Whale Dominance: A single entity with sufficient tokens can meet the threshold alone if set as a raw number, not a percentage.
• Timing Attacks: Exploiting predictable low-activity periods (e.g., holidays) to pass malicious proposals that meet a low threshold. Regular analysis of voter turnout data is essential for mitigation.

The minimum amount of voting power (e.g., total tokens) that must participate in a vote for the result to be valid. It prevents a small, unrepresentative group from making decisions.

• Purpose: Ensures sufficient voter turnout for legitimacy.
• Interaction: A proposal can pass minimum approval but still fail if it does not meet the minimum quorum.
• Example: A DAO with a 4% quorum requires at least 4% of all governance tokens to be cast as votes.

A broader term for any predefined level of support required for a proposal to pass. Minimum approval is a specific type of approval threshold.

• Types: Can be a simple majority (>50%), a supermajority (e.g., 66.7%), or a fixed minimum number of 'Yes' votes.
• Flexibility: Some systems use dynamic thresholds that adjust based on proposal type or size.
• Key Difference: While 'minimum approval' often refers to a percentage, an 'approval threshold' can also be an absolute count.

Time-based parameters that govern the proposal lifecycle, distinct from the support-based minimum approval.

• Voting Delay: The number of blocks between a proposal's submission and the start of voting. Allows for review.
• Voting Period: The fixed duration (in blocks or time) during which votes can be cast. The minimum approval is evaluated at the end of this period.
• Governance Design: These parameters work with approval thresholds to balance speed, security, and voter participation.

The minimum amount of governance tokens a user must hold to submit a proposal for a vote. It is a gatekeeping mechanism separate from the voting outcome.

• Purpose: Prevents spam and ensures proposers have 'skin in the game'.
• Process Flow: A user must first meet the proposal threshold to create a proposal, which is then subject to minimum approval and quorum rules.
• Example: A protocol may require holding 0.1% of total supply to submit a governance proposal.

Alternative or supplementary control mechanisms that can override or bypass a standard minimum approval outcome.

• Veto: A designated entity (e.g., a security council) can reject a passed proposal during a timelock period.
• Multisig Execution: Even after passing a vote, proposal execution may require signatures from a multisig wallet, adding a final approval layer.
• Governance Model: These are common in hybrid or 'guardian' models that blend token voting with more centralized oversight for security.