Purpose

This proposal establishes the decentralized autonomous organization structure for Defi App, implementing account-based governance mechanisms for community control over protocol development, treasury allocation, and strategic decisions while laying the groundwork for future token-based governance.

Motivation

Defi App is entering its next phase of evolution, expanding its governance architecture to include formal community participation. This proposal introduces a structured DAO model designed to support long-term protocol resilience, community alignment, and scalable decision-making.

A DAO structure will enable transparent, democratic governance initially through account-based voting, with a planned transition to $HOME token-based governance upon token launch.

Rationale

The proposed structure balances democratic participation with operational efficiency by establishing direct accountholder governance and delineating the foundation entity for administrative functions. This framework ensures sustainable development while preventing governance paralysis through clear decision-making processes and emergency response mechanisms.

Key Terms

DIP: Defi App Improvement Proposal. A formal governance proposal used to guide decisions on protocol development, treasury allocation, and other strategic initiatives.

Constitutional DIP: A proposal that amends, overrides, or directly impacts the DAO’s foundational charter or governance structure. These proposals represent material changes to the core operating model of the organization and require elevated approval thresholds.

Non-Constitutional DIP: A proposal that does not alter the foundational charter. This includes decisions related to funding, partnerships, technical upgrades (e.g. smart contract deployments or parameter changes), operational workflows, or informational initiatives. Most day-to-day governance activity falls into this category.

DIP Categories: All proposals must specify both their constitutional status and category type:

• Process: Proposals that modify or define DAO procedures, governance mechanisms, or operational workflows.
• Funding: Requests for treasury allocations, grants, or budget approvals.
• Informational: Proposals that share context, analysis, or recommendations without requiring action.
• Technical: Proposals that introduce or change protocol-level code, architecture, or infrastructure.

$HOME Token: Future Defi App governance token intended to replace account-based voting (implementation defined in subsequent DIP).

Account-Based Voting: Initial governance model where each verified account receives one vote regardless of token holdings.

Verified Account: User account linked to EVM addresses through Defi App's authentication system.

DAO: The Defi App Decentralized Autonomous Organization, initially governed by account-based voting.

Foundation: The existing Defi App Foundation Cayman Islands entity serving the DAO's operational needs.

Treasury: On-chain wallets controlled by DAO governance containing protocol-owned assets.

Administrative Budget: Foundation-controlled allocation for operational expenses and grants.

Specifications

Technical Requirements

Completed

• snapshot.js framework integrated into frontend

• Snapshot space configured

• Account verification system using api-v2 snapshot strategy

• Treasury multisig contracts across supported chains

To Be Established

• Public-facing DAO constitution hosted on Knowledge Base

Implementation Details

Voting Infrastructure

The DAO operates through an established account-based verification system utilizing Snapshot's api-v2 strategy in tandem with Defi App's existing authentication infrastructure.

Each verified account meeting a >20 XP threshold receives one vote, regardless of token holdings or other external factors.

Following the $HOME token generation event, governance will transition to token-based vote power as defined in a subsequent proposal.

Governance Access

Community participants may access governance through two pathways: the integrated interface at https://app.defi.app/governance, or directly via the Snapshot space. Both interfaces provide equivalent functionality and proposal visibility.

Proposal Framework

All governance proposals employ a 24h warmup to account for errata, followed by a standardized 5-day voting period. Any verified account holder may submit proposals for community consideration, ensuring broad participation in the governance process.

Voting Thresholds

Constitutional DIPs require a minimum quorum of 100 verified accounts to achieve validity, while Non-Constitutional DIPs require 50 verified accounts. These thresholds ensure adequate community participation while maintaining governance efficiency.

Affected Systems

• Protocol treasury & DAO assets
• Administrative and technical control over defi.app infrastructure and interfaces
• Integration approvals, partnership agreements, and vendor relationships
• Smart contract upgrade authority, including multisig role modifications and emergency powers
• Future transition design and implementation for $HOME token-based governance

Existing Treasury Infrastructure

Network	Address	Architecture
Arbitrum	0x3C170744609C21C313473e3811563073c850C9F5	Safe
Base	0x3C170744609C21C313473e3811563073c850C9F5	Safe
BNB Chain	0x3C170744609C21C313473e3811563073c850C9F5	Safe
Ethereum	0x3C170744609C21C313473e3811563073c850C9F5	Safe
Sonic	0x3C170744609C21C313473e3811563073c850C9F5	Safe
Solana	6GPWDT5zxND89ZA31NJLXke3sNoHNeofhB4PaemSBm4	Squads

Steps to Implement

1. Community Discussion Infrastructure
   Establish dedicated governance discussion channel(s) within existing Discord community (https://discord.gg/defiapp).

   • Resources Required: Discord server configuration, moderation guidelines, community management

2. DAO Constitution Development
   DAO constitution document to be hosted on the Defi App Knowledge Base (https://docs.defi.app). This will be semantically aligned with this proposal, but subject to evolution.

   • Resources Required: Drafting, framework development

3. Legal Review and Finalization
   Legal review of DAO constitution and governance framework compliance

   • Resources Required: Legal counsel review, revisions, final approval

Timeline

Implementation begins following vote completion (1 hour warmup + 5 day voting period).

Total Implementation Time: Est. 10 days from vote completion

Risk Assessment

Smart Contracts Security

Cantina, March 2025: Cantina conducted a security review of Defi App's smart contracts, finding opportunities to improve access controls, staking logic consistency, and reward distribution safeguards to better protect against gas abuse, accounting errors, and unauthorized actions.

Web App Security

Halborn, February 2025: Halborn conducted a security review of Defi App's web application, finding opportunities to improve session handling, security header enforcement, environment isolation, and secret management practices across the web application stack.

Infrastructure Best Practices

Sela, January 2025: Sela conducted a comprehensive review of Defi App's infrastructure, finding opportunities to improve workload isolation, IAM governance, cost optimization practices, and deployment reliability.

Legal and Compliance Considerations

The existing Cayman Islands foundation structure provides the necessary legal and administrative framework to support DAO operations, including the appointment and maintenance of the Council and related governance processes.

All DAO activities, including treasury operations, administrative budget allocations, and off-chain agreements, are executed within the purview of the Foundation and subject to applicable local regulatory and compliance obligations. The Foundation retains the authority to delegate or execute actions in alignment with resolutions approved by the Council or defined within this proposal.

User privacy and data governance are maintained in accordance with the platform’s published privacy policy and jurisdictional requirements.

The proposed governance structure—specifically the delegation of operational authority to the Council—is legally enabled under the Foundation’s constitutional documents and binding agreements, and does not require public disclosure of Council deliberations, meeting records, or implementation procedures, except where legally mandated.

Any future transition from account-based voting to $HOME token–based governance shall be governed by separate ratified proposals and may only occur in compliance with applicable digital asset regulations in operational jurisdictions. The Foundation reserves all rights to interpret, delay, or revise such transitions based on ongoing legal review.