Governance Relay

A governance relay operates as a permissionless service. Any network participant can run a relay node and submit a valid, signed transaction bundle for execution, ensuring censorship resistance and liveness. This prevents a single point of failure, as the network does not rely on a single trusted operator to carry out the DAO's will.

The relay pays the gas fees for executing governance transactions, abstracting this cost and complexity from the end-user or voter. This is typically funded by the DAO's treasury or via a gas refund mechanism. It ensures proposals execute reliably even if the proposer lacks the native token for gas.

Relays often handle multi-call proposals that require multiple contract interactions in a specific, atomic sequence. The relay is responsible for:

• Bundling individual calls into a single transaction.
• Preserving the correct execution order.
• Ensuring atomicity (all succeed or all fail).

Before execution, the relay performs critical validation checks on the proposed transaction data against the on-chain vote results. This includes verifying:

• The proposal has passed with the required quorum and majority.
• The calldata matches what was voted on (hash verification).
• The execution timestamp is within the allowed window.

In multi-chain ecosystems, a governance relay can act as a message bridge. It listens for passed proposals on a governance chain (e.g., Ethereum mainnet), then relays and executes the authorized actions on a separate execution chain (e.g., an L2 or sidechain) via a secure bridge. Examples include Arbitrum's Governance Relay to its L2 chain.

Governance relays are frequently integrated with a Timelock Controller smart contract. The relay submits the transaction to the timelock, which enforces a mandatory delay between proposal passage and execution. This provides a security grace period for the community to react to malicious or erroneous proposals before they take effect.

A governance relay introduces a centralized dependency into a decentralized governance system. If the relay operator is malicious, censored, or experiences downtime, it can halt all governance activity, effectively bricking the protocol's upgrade mechanism. This creates a single point of failure that adversaries can target.

The relay operator has the power to censor proposals or votes by refusing to submit them to the chain. A malicious operator could:

• Suppress proposals that are against their interest.
• Front-run or reorder transactions to influence voting outcomes.
• Selectively exclude votes to skew the final tally, undermining the integrity of the governance process.

The private key controlling the relay's on-chain account is a high-value target. If compromised through a hack or insider threat, an attacker gains unilateral control to:

• Submit fraudulent proposals (e.g., draining the treasury).
• Spam the chain with malicious transactions.
• Disrupt governance entirely. This risk necessitates robust key management practices like multi-signature schemes or hardware security modules (HSMs).

The relay must correctly validate proposal formats, voter eligibility (e.g., token balances), and vote signatures off-chain. Flaws in this validation logic can lead to invalid state transitions on-chain. For example, accepting votes from ineligible addresses or malformed payloads could corrupt the governance system's state.

The relay's availability is critical for governance liveness. It can be targeted by Denial-of-Service (DoS) attacks, either against its API endpoints or by spamming it with low-quality proposals. Performance bottlenecks in the relay can also cause votes to be submitted after a proposal deadline, disenfranchising voters.

Protocols mitigate relay risks through several mechanisms:

• Permissioned Relay Sets: Using a multi-sig or decentralized validator set to operate the relay.
• Fallback Mechanisms: Allowing direct on-chain proposal submission as a censorship-resistant backup.
• Transparency & Monitoring: Publicly logging all relay inputs and actions for community audit.
• Time-Locked Upgrades: Implementing delays on executed proposals to allow for community veto if the relay acts maliciously.

The asset used for voting in a relayed governance system. On L2s, users hold and delegate a governance token (e.g., OP, ARB) that is often a bridged representation of the L1 token. The relay's function is to attest to the final voting power derived from these token balances on L2 and communicate the aggregate result to the L1 governance contract for execution.

After a proposal passes on L2, the relay transmits the approved calldata to a Timelock contract on L1. This introduces a mandatory delay before the proposal's actions (like treasury transfers or parameter changes) are executed. This delay is a critical security feature, allowing the community to react if a malicious proposal is somehow relayed.

To trustlessly verify the legitimacy of relayed governance data, systems may employ cryptographic proofs. Optimistic Rollups could use fraud proofs to challenge incorrect relayed state, while ZK-Rollups use validity proofs (ZK-SNARKs/STARKs) to cryptographically guarantee the correctness of the L2 state, including vote tallies, before they are relayed.

In many implementations, the relay function is initially secured by a multisignature wallet or a Security Council. This entity is responsible for signing off on the batched L2 state roots containing governance results before they are posted to L1. The goal is to progressively decentralize this role over time.

The ultimate destination and source of truth. This is the smart contract on the base layer (e.g., Ethereum) that:

• Holds the protocol's treasury and core contract upgrade keys.
• Receives finalized proposals from the relay.
• Executes the encoded actions after any timelock delay. The L2 governance process is an attestation layer that instructs this final L1 executor.