Governance Quorum

The quorum threshold is the minimum percentage of the total voting power (e.g., staked tokens) that must participate in a vote for the result to be binding. For example, a 4% quorum on a DAO with 10M governance tokens requires at least 400k tokens to vote.

• Purpose: Prevents a small, unrepresentative group from passing proposals.
• Dynamic vs. Static: Can be a fixed parameter or algorithmically adjusted based on historical turnout.

Distinct from quorum, the approval threshold is the percentage of participating votes (e.g., "Yes" vs. "No") required for a proposal to pass. A proposal may meet quorum but fail if it doesn't achieve the required approval (e.g., >50% majority or a supermajority like 66.7%).

• Example: With quorum met, a proposal with 60% 'Yes' votes passes a simple majority threshold but fails a 67% supermajority threshold.

When a vote fails to meet the quorum threshold, the proposal is typically rejected. Protocols implement various fallback mechanisms:

• Automatic Rejection: The proposal expires.
• Extended Voting Period: The deadline is extended to gather more votes.
• Quorum Halving: Some systems (e.g., early Compound) automatically reduce the quorum for subsequent votes on the same proposal.

Quorum is calculated based on a specific vote-weighting model, which defines what constitutes participation:

• Token-Weighted: One token = one vote. Quorum is a percentage of total supply.
• One-Address, One-Vote: Each wallet address gets a single vote, regardless of balance.
• Delegated: Votes are weighted by tokens delegated to a representative (e.g., Compound's Governor Bravo). The quorum is calculated from the total delegated voting power.

Setting the quorum involves a critical trade-off:

• High Quorum (e.g., 20%): Increases legitimacy and security but risks governance paralysis if voter apathy is high.
• Low Quorum (e.g., 2%): Makes passing proposals easier but increases risk of low-cost attacks where a malicious actor can pass proposals with a small stake.

Protocols often adjust this parameter through meta-governance.

Uniswap: Uses a static quorum threshold (e.g., 4% of UNI for certain proposals).

Arbitrum: Initially used a low, dynamic quorum that adjusts based on previous proposal turnout.

MakerDAO: Employs a continuous approval voting system with an executive vote that requires approval from MKR token holders, functioning as a quorum check on executive actions.

The influence a participant has in a governance vote, typically derived from the amount of a governance token they hold or stake. This can be measured as a simple token count or through delegated mechanisms.

• Token-weighted voting: One token equals one vote.
• VeToken models: Voting power is boosted by locking tokens for longer durations (e.g., Curve's veCRV).
• Delegation: Token holders can delegate their voting power to other addresses, enabling representative democracy.

The minimum amount of voting power a user must possess or delegate to submit a governance proposal for a community vote. This gatekeeping mechanism prevents spam and ensures proposals have a baseline of support.

• Example: A DAO may require a proposer to hold or be delegated 0.5% of the total governance token supply.
• It works in tandem with the quorum; a proposal must first meet the submission threshold, then later achieve the participation quorum to pass.

A mandatory delay between when a governance proposal is approved and when its encoded actions can be executed. This is a critical security mechanism that allows the community to review executed code and provides a final window to react to malicious proposals that have met quorum.

• Security Function: Acts as a circuit breaker, enabling emergency measures if a malicious proposal slips through.
• Common in major protocols like Compound and Uniswap, where changes to core contracts are delayed by several days.

A system where token holders can assign their voting power to a representative (a "delegate") who votes on proposals on their behalf. This enables participation for less active members and can lead to more informed decision-making through specialized delegates.

• Key Benefit: Improves voter participation and helps achieve quorum by consolidating fragmented voting power.
• Transparency: Delegates' voting history is typically public, allowing holders to choose representatives aligned with their views.

An off-chain, gas-free voting mechanism where votes are signed messages weighted by token balances at a specific block height (the "snapshot"). It is used for sentiment checking and guiding decisions without executing on-chain transactions.

• Relation to Quorum: Snapshot votes often use a quorum threshold to gauge sufficient community interest before proceeding to a binding, on-chain vote.
• Limitation: Results are not automatically enforceable; a separate on-chain transaction is needed for execution.

A method where the execution of a passed proposal is gated by a multi-signature wallet, requiring a predefined number of key holders to sign the transaction. This adds a layer of human oversight and security beyond automated smart contract execution.

• Common Use: Often used by DAO treasuries or as a fallback if a timelock is not present.
• Trade-off: Introduces a degree of centralization, as the multisig signers become trusted custodians of the protocol's upgrade path.