Minimal Viable DAO

A fungible token (often an ERC-20) that confers voting rights and represents membership in the DAO. Token distribution (e.g., via airdrop, sale, or contribution rewards) defines the initial stakeholder set.

• Purpose: Serves as the staking mechanism for proposal creation and voting power.
• Example: UNI tokens govern the Uniswap protocol.

A smart contract-based system where token holders cast votes to execute decisions, such as treasury spends or parameter changes. Proposals are submitted on-chain, with votes weighted by token amount.

• Common Models: Simple majority, quadratic voting, or token-weighted.
• Key Feature: Ensures executable outcomes where passed votes trigger automatic smart contract functions.

A smart contract wallet, typically a multi-signature or Governor contract, that holds the DAO's pooled assets (e.g., native tokens, stablecoins, NFTs). It is the financial layer controlled exclusively by passed governance proposals.

• Function: Funds protocol development, grants, incentives, and acquisitions.
• Security: Access is permissioned via the voting mechanism.

The formal process for suggesting and ratifying actions. A complete framework includes:

• Submission: A staked token threshold to prevent spam.
• Discussion: An off-chain forum (e.g., Discourse) for deliberation.
• Voting Period: A fixed time window for on-chain voting.
• Execution: Automatic implementation of the proposal's calldata upon success.

The core principle of an MVDAO is to avoid unnecessary complexity. This means forgoing elaborate delegation systems, multi-chain governance, or real-world legal wrappers at launch.

• Focus: Launch with just enough structure to make credible commitments and distribute power.
• Evolution: Additional layers (e.g., security councils, subDAOs) are added via governance as needed.

The fungible token that confers voting power and membership rights within the MVDAO. It is the primary mechanism for aligning incentives and distributing decision-making authority.

• Purpose: Used for creating proposals, casting votes, and often for economic staking.
• Example: An ERC-20 token where 1 token equals 1 vote is a common implementation.

The smart contract logic that defines how proposals are voted on and approved. This is the core engine of decentralized decision-making.

• Common Types: Token-weighted voting (1 token = 1 vote) and quadratic voting are prevalent.
• Parameters: Includes settings for voting delay, voting period, and quorum thresholds required for a proposal to pass.

The on-chain workflow for submitting, discussing, and executing actions. A proposal is a bundled transaction or set of instructions that executes if approved.

• Lifecycle: Typically follows: Submit → Vote → Queue → Execute.
• Content: Can range from simple treasury transfers to complex smart contract upgrades via a Timelock controller.

A delay mechanism that queues successful proposals for a mandatory waiting period before execution. This is a critical security feature.

• Purpose: Provides a time buffer for participants to review passed proposals and react if malicious code is discovered.
• Function: Prevents immediate, irreversible execution, acting as a final safeguard.

An MVD serves as a sandbox environment for testing governance models, tokenomics, and community dynamics before committing to a full-scale deployment. Teams can rapidly iterate on parameters like quorum thresholds, voting periods, and proposal types with minimal overhead and cost.

Small-scale projects, such as open-source software, content collectives, or niche investment clubs, use MVDs to establish on-chain legitimacy and transparent decision-making. It provides a formal structure for managing a shared treasury and making collective decisions without the complexity of a corporate entity.

Large, established DAOs often create MVDs as sub-governance structures for specific initiatives or working groups. This allows for autonomous decision-making on focused tasks (e.g., grants, marketing, development) while maintaining a lightweight link to the parent DAO's treasury and overarching rules.

An MVD provides a transparent, multi-signature-like framework for managing a shared on-chain treasury. It's ideal for small teams or partnerships that need programmable rules for spending (e.g., requiring a vote for expenditures over a certain amount) beyond simple multi-sig wallets.

MVDs can be used to bootstrap soulbound token (SBT) systems or non-transferable reputation within a community. Voting power or membership rights are tied to participation, completing tasks, or holding specific credentials, creating a primitive decentralized identity layer.

An MVD acts as the core on-chain operational layer for a legally recognized entity, such as a Limited Liability Cooperative Association (LLC) or foundation. The MVD handles day-to-day proposals and voting, while the legal wrapper provides liability protection and interfaces with the traditional legal system.

The streamlined nature of an MVD often means fewer safeguards, increasing vulnerability to governance attacks. Key risks include:

• Proposal spam due to low submission costs.
• Vote buying or collusion when token distribution is concentrated.
• Treasury drain proposals that can pass before the community can organize a defense.

MVDs typically lack the legal wrappers or structured legal opinions of more mature DAOs. This creates significant uncertainty regarding:

• Liability exposure for contributors and token holders.
• Tax treatment of treasury assets and rewards.
• Enforceability of on-chain votes in traditional legal systems.

With minimal formal processes, MVDs are prone to operational failure. Common issues include:

• Key person dependency on a few anonymous founders for critical actions.
• No clear conflict resolution mechanisms for disputes.
• Treasury management gaps, such as multisig signer attrition or lack of investment policy.

The smart contracts powering an MVD are often simple and monolithic, making future upgrades difficult. This leads to:

• Technical debt as the protocol outgrows its initial governance framework.
• Contentious hard forks if on-chain upgrades require full migration.
• Voter apathy as proposal complexity increases without corresponding tooling.

Achieving effective decentralized coordination with minimal structure is exceptionally challenging. Limitations include:

• Low voter turnout without incentives or delegation systems.
• Poor information symmetry between core teams and token holders.
• Difficulty funding public goods or long-term initiatives without a grants framework.

In an MVD, a 51% attack is often a governance attack, not a consensus attack. A single entity acquiring a majority of governance tokens can:

• Unilaterally pass any proposal.
• Drain the treasury.
• Mint unlimited new tokens.
• This highlights the critical importance of fair launch and decentralized token distribution from day one.