Setting Up Multi-Signature Governance for Network Upgrades

Multi-signature (multisig) governance is a foundational security model for DePIN projects, requiring multiple authorized parties to approve critical actions like network upgrades, treasury disbursements, or smart contract modifications. Unlike a single private key, a multisig wallet, such as a Gnosis Safe or a custom implementation using OpenZeppelin's libraries, distributes control among a council of signers—often including core developers, community representatives, and independent auditors. This setup mitigates single points of failure and establishes a transparent, auditable process for executing on-chain proposals. For a DePIN managing real-world hardware, this is critical for ensuring network stability and stakeholder trust.

The first step is defining the governance parameters: the signer set and the threshold. A common structure for a new DePIN might be a 3-of-5 multisig, where three out of five designated signers must approve a transaction. The signer set should be diverse, representing technical leadership, community governance (e.g., via a DAO), and external security partners. These parameters are immutable once the wallet is deployed, so careful consideration is required. Tools like Safe{Wallet} provide a user-friendly interface for creating these wallets on networks like Ethereum, Polygon, or Gnosis Chain, abstracting the underlying smart contract complexity.

Once the multisig wallet is deployed and funded, it becomes the owner or admin of the DePIN's core smart contracts. For example, the address controlling an upgradeable proxy contract for a node registry or reward distribution system would be transferred to the multisig. All subsequent upgrade proposals must then follow the governance flow: a transaction is drafted (e.g., calling upgradeTo(address newImplementation)), shared with signers via the Safe interface, and only executed after the predefined threshold of confirmations is met. This creates a clear, on-chain record of who approved each change, which is publicly verifiable on a block explorer.

Integrating this with an off-chain governance process, such as a Snapshot vote or forum discussion, creates a robust hybrid model. A typical workflow is: 1) A upgrade proposal is discussed and voted on by token holders via Snapshot. 2) If the vote passes, the encoded transaction data is submitted to the multisig wallet by a community delegate. 3) The designated signers review the transaction against the passed proposal and provide their signatures. This separation of voting (off-chain, gas-free) and execution (on-chain, via multisig) balances decentralization with practical security and cost efficiency.

For developers, implementing a custom multisig owner for contracts involves using audited libraries. Here's a basic example using OpenZeppelin's AccessControl initialized with a multisig address:

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import "@openzeppelin/contracts/access/AccessControl.sol";

contract DePINRegistry is AccessControl {
    bytes32 public constant UPGRADER_ROLE = keccak256("UPGRADER_ROLE");
    
    constructor(address multisigAddress) {
        _grantRole(DEFAULT_ADMIN_ROLE, multisigAddress);
        _grantRole(UPGRADER_ROLE, multisigAddress);
    }
    
    function upgradeContract(address newLogic) external onlyRole(UPGRADER_ROLE) {
        // ... upgrade logic
    }
}

The multisigAddress in the constructor is the deployed Gnosis Safe or similar wallet, which then holds the exclusive UPGRADER_ROLE.

Regularly auditing the multisig process and signer composition is essential. As the DePIN matures, the governance model may evolve—perhaps increasing the signer count or transitioning to a more permissionless system. However, starting with a transparent multisig provides a secure, accountable foundation for executing the network's most critical operations, protecting both the infrastructure and its users from unilateral action or key compromise. Documentation of the process and signer identities (where appropriate) should be public to maintain legitimacy.

Before deploying a multisig, you must define the governance parameters. This includes selecting the signer set—the addresses of the individuals or entities authorized to sign transactions. You must also determine the threshold, which is the minimum number of signatures required to execute a proposal. For a 3-of-5 multisig, three out of five signers must approve. These parameters are immutable once the contract is deployed, so careful planning is essential. Use a secure, air-gapped environment to generate signer keys.

The primary technical prerequisite is access to a wallet and a development environment. You will need a tool like Hardhat or Foundry for contract deployment and interaction. Ensure you have Node.js and npm installed. You'll also require test ETH or the native token of your target chain (e.g., Sepolia ETH) for deployment gas costs. Familiarity with a block explorer like Etherscan is necessary for verifying contracts and monitoring transactions post-deployment.

For this tutorial, we will use Safe{Wallet} (formerly Gnosis Safe), the most audited and widely adopted multisig framework. First, install the required dependencies. In your project directory, run npm install @safe-global/safe-deployments ethers. The @safe-global/safe-deployments package provides the official contract addresses and ABIs for all supported networks, from Ethereum Mainnet to Layer 2s like Arbitrum and Optimism.

Next, write a deployment script. The script must specify the signer addresses and the threshold. Here is a basic example using Ethers.js and the Safe Singleton factory:

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const { ethers } = require('ethers');
const { default: SafeProxyFactory } = require('@safe-global/safe-deployments/dist/assets/v1.3.0/proxy_factory.json');

async function deployMultisig(signerAddresses, threshold) {
  const provider = new ethers.JsonRpcProvider(RPC_URL);
  const deployer = new ethers.Wallet(PRIVATE_KEY, provider);
  
  const proxyFactory = new ethers.Contract(
    SafeProxyFactory.networkAddresses['1'], // Use chain ID
    SafeProxyFactory.abi,
    deployer
  );
  // ... deployment logic continues
}

Always test this script on a testnet first.

After deployment, you must verify the contract on the block explorer. For Safe contracts, you can use the Safe Transaction Service to manage proposals and signatures via a GUI or API. However, the core setup is now complete. The final, critical step is to fund the multisig wallet address with the network's native token to pay for future proposal execution gas fees, which are paid by the wallet itself, not the individual signers.

The signer set is the list of public addresses authorized to submit and approve governance proposals. These addresses are typically controlled by key stakeholders, such as core developers, foundation members, or elected community delegates. The composition of this set directly impacts the decentralization and security posture of the protocol. A common practice is to start with a small, trusted set of core developers and gradually expand to include more diverse, independent entities over time, as seen in the initial setups for protocols like Uniswap and Compound.

The threshold (often denoted as m-of-n) specifies the minimum number of signatures required to execute a transaction. For example, a 4-of-7 configuration on a Gnosis Safe requires at least four approvals from the seven signers. Setting this threshold is a balance between security and operability. A threshold that is too high (e.g., 7-of-7) creates a single point of failure if a signer becomes unavailable, while a threshold that is too low (e.g., 2-of-7) reduces the security guarantees against collusion or key compromise.

When configuring these parameters, consider the transaction types they will govern. A common pattern is to use a more stringent threshold (e.g., 5-of-9) for high-risk operations like upgrading a core protocol contract, and a lower threshold (e.g., 3-of-9) for routine treasury management. This can be implemented using separate multisig wallets or modular governance contracts. Always document the rationale for your chosen signers and threshold publicly to maintain transparency with your community.

Here is a conceptual example of how these parameters are defined when deploying a Gnosis Safe contract using the Safe SDK:

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const safeAccountConfig = {
  owners: [
    '0x123...', // Core Dev 1
    '0x456...', // Core Dev 2
    '0x789...', // Community Lead
    '0xabc...', // Foundation
    '0xdef...'  // Auditor
  ],
  threshold: 3, // 3-of-5 required
};
const safeSdk = await Safe.create({ ethAdapter, safeAccountConfig });

This code snippet creates a Safe with five owners where any three can execute a transaction.

Before finalizing your configuration, conduct a threat model analysis. Ask: What happens if a signer loses their keys? What is the process for removing or adding a signer? Establish clear, on-chain procedures for rotating signers, which itself should require the current multisig threshold to approve. This initial setup is not set in stone but should be changed with extreme caution, as it is the root of trust for all subsequent governance actions.

A multi-signature (multisig) wallet requires a predefined number of signatures from a set of authorized addresses to execute a transaction. For protocol governance, this setup distributes control among core team members or a DAO council, preventing unilateral actions. Popular deployment targets include Safe (formerly Gnosis Safe) on EVM chains, Squads on Solana, and native implementations like multisig on Cosmos SDK chains. The choice depends on your network's ecosystem and the required feature set, such as module support and transaction scheduling.

The deployment process involves specifying the signer addresses (e.g., team leads' public keys) and the threshold (e.g., 3-of-5). Using a tool like the Safe Global Dashboard for EVM chains, you connect a deployer wallet, define the owner list and confirmation requirement, pay the gas fee, and deploy the contract. It's critical to verify all signer addresses are correct on-chain before finalizing. Post-deployment, record the new multisig contract address; this becomes your protocol's new owner or admin for all upgradeable contracts.

After deployment, conduct a verification and funding sequence. First, verify the contract on a block explorer like Etherscan by submitting the source code (Safe provides verified contracts). Next, transfer a small test amount of native gas token (ETH, MATIC, etc.) to the multisig address and execute a dummy transaction requiring the threshold to confirm wallet functionality. Finally, transfer control of your protocol's core contracts to the multisig address using the transferOwnership(address newOwner) function or equivalent in your upgrade pattern. This action should itself be a transaction requiring the new multisig threshold, cementing the secure handover.

A multi-signature (multisig) wallet is a smart contract that requires a predefined number of signatures from a set of authorized addresses to execute a transaction. For network governance, this contract becomes the executive that holds upgrade authority over your protocol's core contracts. Instead of a single private key, control is distributed among a council of trusted entities, such as core developers, community representatives, or security auditors. This setup mitigates single points of failure and establishes a transparent, auditable process for all administrative actions.

To implement this, you will deploy a multisig contract. A common standard is Gnosis Safe, which is widely audited and supports features like transaction scheduling and module extensions. Alternatively, you can use OpenZeppelin's Governor contracts with a custom TimelockController as the executor. The key configuration parameters are the owners (the list of signer addresses) and the threshold (the minimum number of signatures required). For a 5-member council overseeing a mainnet protocol, a 3-of-5 or 4-of-5 threshold is typical, balancing security with operational agility.

Once deployed, you must transfer ownership or upgrade authority of your protocol's contracts to the multisig address. This is a critical, one-way operation. For an upgradeable proxy pattern using TransparentProxy or UUPS, you call transferOwnership(address newOwner) on the proxy admin contract. For a Governor setup, you set the TimelockController address as the executor. Always verify the multisig address on-chain and conduct a test transaction with a low-stakes contract before finalizing the transfer to ensure the setup works correctly.

Governance operations follow a clear workflow. First, a proposal—such as a new contract implementation address—is drafted and discussed off-chain in a forum like Commonwealth or Discourse. After consensus, a transaction is created in the multisig interface. Each signer reviews the calldata, destination, and value before providing their signature. The transaction is only executable once the threshold is met. This process creates an immutable on-chain record, providing full transparency for the community to audit who approved which changes.

For developers, interacting with the multisig programmatically is essential for automation. Using the Ethers.js library and the Gnosis Safe SDK, you can create and propose transactions from your scripts. The following example shows how to create a transaction to upgrade a proxy contract, requiring signatures from the multisig owners.

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import Safe from '@gnosis.pm/safe-core-sdk';
import EthersAdapter from '@gnosis.pm/safe-ethers-lib';
const safeSdk = await Safe.create({ ethAdapter, safeAddress });
const upgradeTx = await safeSdk.createTransaction({
  transactions: [{
    to: proxyAdminAddress,
    value: '0',
    data: proxyAdmin.interface.encodeFunctionData('upgrade', [proxyAddress, newImplAddress])
  }]
});
const txHash = await safeSdk.getTransactionHash(upgradeTx);
await safeSdk.signTransactionHash(txHash); // Sign with your owner key

Maintaining the multisig is an ongoing responsibility. You should regularly review and potentially rotate signer keys, especially if a team member departs. Consider implementing a timelock delay (e.g., 48-72 hours) for critical operations, giving the community time to react if a malicious proposal is signed. Document all governance actions and their corresponding forum discussions. This integration transforms your protocol from a centrally controlled application into a credibly neutral, community-supervised network, which is a foundational step toward progressive decentralization.

The upgrade transaction is a specific type of smart contract call that modifies the core protocol. For Ethereum-based networks, this is often a call to the upgradeTo(address) function on a proxy contract governed by a TimelockController. The transaction data must be constructed with the exact address of the new, audited implementation contract. You can generate this calldata using libraries like Ethers.js: timelockInterface.encodeFunctionData('schedule', [target, value, data, predecessor, salt, delay]). The delay parameter must match the timelock's minimum waiting period, which is a critical security feature.

This raw transaction must then be submitted to the multi-signature wallet's interface for signing. In a Gnosis Safe, for example, the transaction is created in the web interface, specifying the Timelock contract as the recipient and the encoded calldata. The required threshold of signers must then review and sign the transaction. Each signer should independently verify: the target implementation address matches the audited bytecode hash, the timelock delay is enforced, and the proposal hash corresponds to the one that passed governance.

After the final signature is collected, any signer can execute the transaction, which submits it to the TimelockController. The timelock will then queue the upgrade, making it publicly visible on-chain during the delay period. This transparency allows users and developers to prepare for the change and provides a final window for community scrutiny. Monitoring tools like Tenderly or the OpenZeppelin Defender Sentinels can be set up to alert on the timelock's CallScheduled event.

Once the delay period elapses, the execute function can be called to finalize the upgrade. The execution is permissionless, meaning any address can trigger it after the timer expires, ensuring the upgrade cannot be blocked. Successful execution emits an event and updates the proxy's implementation pointer. Post-upgrade, immediate verification is essential. Use the ERC1967Utils.getImplementation() function or check the proxy on a block explorer to confirm the new contract address is active.

This multi-step process—crafting calldata, multi-sig proposal, timelock queue, and execution—creates a secure, transparent, and deliberate pathway for network evolution. It balances the need for agile development with the critical requirement for stakeholder oversight and protection against rushed or malicious changes.

Implementing a multi-signature governance model is a foundational step toward secure and decentralized protocol management. By requiring multiple trusted parties to approve a transaction, you significantly mitigate risks associated with single points of failure, such as a compromised private key or unilateral action. This structure is critical for executing high-stakes operations like smart contract upgrades, treasury management, and parameter adjustments on live networks like Ethereum, Arbitrum, or Optimism.

Your next steps should focus on operational security and process refinement. First, establish a clear governance framework document that defines the roles of signers, approval thresholds for different transaction types (e.g., 3-of-5 for routine upgrades, 4-of-5 for emergency pauses), and a transparent proposal process. Tools like Snapshot for off-chain signaling paired with Safe's transaction builder can create a robust workflow. Regularly test the recovery process for lost signer keys using your wallet's built-in features.

To deepen your understanding, explore advanced configurations. Consider implementing a timelock contract, such as OpenZeppelin's TimelockController, which queues approved transactions for a mandatory delay. This gives the community a final window to react before execution. Additionally, integrate on-chain voting mechanisms using governor contracts (e.g., OpenZeppelin Governor) to make the multisig itself accountable to a broader token-holding DAO, creating a two-layer governance system.

For ongoing maintenance, monitor transaction proposals and signatures using the Safe transaction history and event logs. Set up alerts for pending transactions approaching their execution window. Keep signer software and hardware wallets updated with the latest security patches. Remember, the security of a multisig is only as strong as the individual security practices of its signers and the social trust between them.

Further resources are available to expand your governance toolkit. Review the official Safe{Wallet} documentation for advanced modules and integrations. Study real-world implementations by examining the governance setups of major protocols like Uniswap or Aave on Etherscan. For formal verification of upgrade logic, consider engaging with auditing firms like Trail of Bits or OpenZeppelin's security services.